Mercantile / Life Science
Pharmaceutical Company Insurance
Specialist advice for pharmaceutical manufacturers, importers, licence holders, distributors and businesses responsible for medicine storage or supply.
The risk in focus
Where cover matters
Insurance built for the industry
Customer Injury
Potential for alleged bodily injury linked to a medicine, ingredient or labelling.
Batch and recall
Risk of contamination causing Recall Costs.
Supply Chain Risk
Assess manufacturing, cold chain, warehousing, transit, importation and overseas sales.
Who we assist
Businesses we work with
We advise established businesses and growing companies. Insurers need an accurate description of the products, services and contractual roles involved.
- Prescription and over-the-counter medicine manufacturers and brand owners.
- Contract manufacturers, packagers, compounders and specialist production businesses.
- Pharmaceutical importers, licence holders, wholesalers and distributors.
- Biotechnology and drug-development companies approaching commercialisation.
- Temperature-controlled storage, fulfilment and pharmaceutical logistics providers.
- Veterinary pharmaceutical suppliers and other businesses with products requiring specialist underwriting.
- Medicinal cannabis and cannabinoid product businesses.
- Psilocybin product businesses where specialist insurance markets are required.
The programme
What insurance may be needed?
There is no single policy that automatically covers every aspect of a life science business. Depending on the activities and insurer appetite, an insurance programme may include:
| Cover | What to examine |
|---|---|
| Products liability | Certain claims alleging bodily injury or property damage from an insured medicine or product. |
| Product recall | Specified withdrawal, notification, disposal and replacement expenses after an insured recall trigger. |
| Professional indemnity / E&O | Certain financial loss arising from insured research, testing, advisory, formulation or other professional services. |
| Property & business interruption | Manufacturing property, equipment, stock and interruption after insured physical loss or damage. |
| Machinery breakdown & spoilage | Specified breakdown and damage to temperature-sensitive stock, subject to the refrigeration and monitoring conditions. |
| Marine transit | Stock moving between suppliers, manufacturing sites, warehouses and customers in Australia or internationally. |
| Clinical trial liability | A separate consideration where the company is the trial sponsor or otherwise takes on participant-injury responsibilities. |
| Cyber & management liability | Relevant digital, privacy, operational and management exposures. |
Policy terms matter. The descriptions above are a guide to potential covers, not a statement of what any particular policy insures. Eligibility, exclusions, limits, sublimits, deductibles, territorial scope and disclosure should be reviewed against the proposed wording.
Consideration 01
Product injury, contamination and recall
A patient-injury allegation and the costs of withdrawing a batch are distinct exposures. Products liability focuses on certain third-party injury and property damage claims. Product recall responds only if the wording’s trigger, product definition and expense categories are met.
A contamination event may also affect the value of stock, manufacturing equipment, customers’ products and future sales. Consider the interaction between liability, recall, property, spoilage and business interruption rather than assuming one policy handles every consequence.
Consideration 02
Manufacturing, importation and distribution activities
Insurers need to understand the work your business undertakes, including outsourced manufacturing, packaging, storage and distribution. We discuss the insured activities, entities and relevant policy features.
Tell us about any insurance requirements requested by customers or business partners. We can discuss available cover; interpretation of agreements and legal responsibilities belongs with your legal adviser.
Consideration 03
Cold chain, stock and transit
Temperature-sensitive medicine can be damaged by refrigeration failure, power loss, a monitoring error or an interruption during transport. Policies may distinguish equipment breakdown from deterioration of stock, and some impose alarm, maintenance, temperature-monitoring or backup-power conditions.
Stock at third-party warehouses and goods moving internationally also need explicit attention. Consider the custody point at which risk transfers and whether the property and marine policies leave a gap.
Consideration 04
Overseas markets and changing activities
Exports, overseas clinical work or a new product class may fall outside an existing territorial or product description. US exposure deserves particular scrutiny for jurisdiction, defence costs, exclusions and contractual indemnities.
Insurance should be revisited when a business moves from research to commercial supply, acquires a brand, changes a contract manufacturer or introduces a product in a new country.
How losses can arise
Illustrative scenarios
These examples show issues to discuss with our brokers. They are hypothetical and are not claims paid or a promise that a policy will respond.
Mislabelling and withdrawal
A batch carries incorrect instructions and is withdrawn.
Temperature excursion
A warehouse refrigeration failure damages temperature-sensitive stock. The breakdown cause, monitoring requirements, stock ownership and business interruption provisions all matter.
Importer named in a claim
A medicine manufactured overseas is sold through an Australian importer and a patient alleges injury.
Preparing a review
What we will ask about
A clear account of the business helps insurers quote accurately and helps us compare the terms that matter most.
- Products and ingredients, their use, regulatory status, stage of development and annual sales.
- Roles of each manufacturer, sponsor, licence holder, importer, packager, warehouse and distributor.
- Territories and revenue split, including any US or Canadian activities.
- Manufacturing and quality systems, batch controls, adverse-event process and previous recalls.
- Storage temperatures, refrigeration monitoring, backup systems, locations and stock values.
- Key supply agreements, indemnities, requested insurance limits and current policy wordings.
Common questions
Frequently asked questions
Is product recall included in products liability?
No. It is a different cover. Some Life Science Liability wordings have Product Recall as a seperate cover and limit you can select to insure.
Who should insure stock held by a third-party warehouse?
The owner of the stock is best to insure their own stock. Speak to our brokers to review.
Does a contract manufacturer need its own insurance?
Yes. A contract manufacturer has its own insurance exposures.
What if the business starts exporting?
Tell the broker before trading in a new territory. Territorial and jurisdiction wording, US exclusions and contract insurance requirements will also need to be disclosed.
Specialist pharmaceutical sectors
Explore related pharmaceutical insurance
Our dedicated sector pages provide insurance information for pharmaceutical manufacturers and importers, pharmaceutical distributors, biotechnology companies, medicinal cannabis and cannabinoid businesses and psilocybin product businesses.
Review your cover
Discuss insurance for your business.
Tell us what you do, where you operate and what your customers or partners require. Consider existing cover or approach suitable markets for a new programme.
Start an enquiryGeneral insurance information only. Cover is subject to underwriting, policy terms, conditions, exclusions, limits and deductibles.