Australian businesses manufacturing medicines or importing finished products, ingredients or branded pharmaceutical products.

Where the sector’s exposures differ

Formulation, contamination, labelling, batch release and outsourced production can lead to distinct exposures. A business may import the finished medicine while retaining sponsor or brand-owner responsibilities. Give insurers a product and activity breakdown, including contract manufacture and any overseas facilities.

Insurance covers to assess

Review products liability, product errors and omissions, recall, property and business interruption, and marine transit. Identify who owns stock during shipping and manufacturing. Product replacement costs and loss caused by a quality failure without insured physical damage need explicit examination.

Policy features to discuss

We can discuss the insured activities, insured entities, territorial limits, defence costs, excesses and aggregate limits offered by insurers. If a customer requests particular insurance, let us know so we can consider the available cover. Legal interpretation, drafting and negotiation of contracts should be handled by your legal adviser.

An illustrative exposure

A batch is alleged to contain an incorrect concentration. Patient claims, withdrawn stock and lost production are different heads of loss.

This is a hypothetical example to explain cover questions, not a Mercantile client case or a paid claim. The proposed policy must be assessed before assuming any response.

Information needed for a quotation

Medicine types and formulations; manufacturing steps; outsourced facilities; quality release responsibilities; sponsor arrangements; revenue by country; prior incidents and withdrawals.

Also provide turnover, wages, subcontractor and labour-hire costs, the legal entities to insure, existing schedules and wordings, claims or known circumstances, and planned changes. A clear activity breakdown helps us approach suitable markets and compare the terms offered.

Common questions

Does outsourcing manufacture remove the brand owner’s exposure?

No assumption should be made. Contracts, the actual role and potential allegations against the importer or brand owner require an independent insurance review.

Can Mercantile review existing insurance?

Yes. Send the schedule and wording together with a description of your activities and key contracts. We can examine significant gaps and approach suitable insurers, subject to their appetite and acceptance. We assist Australian businesses from our Norwest NSW office.

Related insurance sectors

Our service focuses on insurance placement and policy cover. Product classification, approvals and regulatory compliance are matters for your regulatory adviser or the relevant authority.

Return to pharmaceutical insurance or explore all Life Science insurance sectors.

• Pharmaceutical Licence Holder and Sponsor Insurance
• Pharmaceutical Distributor Insurance
• Pharmaceutical Contract Manufacturer Insurance

Prepared by Mercantile Insurance Brokers. Updated 30 September 2026. General information for Australian businesses. Availability and cover depend on insurer acceptance, policy terms, exclusions, limits and deductibles.