An examination of how some product libaility claims could be denied. Does your product contain silicone, animal derived substances, or addictive substances? Are you developing a treatment for Hepatitis or HIV? Is your product used in emergencies?

WGA InsureBlog item offers some tips for drug and medical device companies in response to warnings from cargo and transit insurance companies regarding potential thefts of drugs and pharmaceutical shipments.

Although significant drug and medical device R&D activity remains within the United States, representing close to 50% of total worldwide expenditures over the last 10-15 years, a clear trend toward globalization has emerged. Many would argue that cost is the primary factor driving this development, however, research suggests that other key factors are contributing as well.

To date, more than forty states have enacted data breach privacy laws and more legislation on both the state and federal level is on the way. Massachusetts is one of the most recent states to enact such a law, with 201 C.M.R. 17.00 set to become effective on March 1, 2010. These laws not only impose significant compliance burdens on organizations to protect private information of their customers, employees, patients, or other third parties but also expose organizations that fail to protect such information to financial loss.

The Food and Drug Administration (FDA) has announced a plan to increase criminal prosecutions of corporate executives under the strict liability misdemeanor provision of the Food, Drug, and Cosmetic Act (FDCA).

Comprehensive risk management strategies for life science companies must step outside the four corners of traditional insurance programs and assess an organization’s exposure to business interruption loss that may be absent of direct physical damage and trigger coverage under traditional property/business interruption insurance policies.

In the last several months, there has been media coverage of break-ins at warehouses storing pharmaceuticals and medical devices. Initial thoughts upon hearing of these thefts is that standard property insurance would cover the cost of the stolen goods, business interruption insurance would pay for lost profits and the product manufacturer can go back to business as usual. But the size and sophistication of these heists clearly point to professional thieves with buyers already lined up, and the liability can ultimately lead back to the drug manufacturer.

The Food and Drug Administration (FDA) regulates drug warning labels to ensure that drugs are safe for public distribution. However pharmaceutical companies have used the FDA's role as a shield in product liability lawsuits brought against them in state courts with the argument that drug safety questions are a matter for the federal government to decide.

Enterprise Risk Management (ERM) is a systematic approach to managing risks in a consistent and coordinated fashion across the entire organization. In a recent survey when investors were asked about the key benefits of a company having a focused and reliable approach to risk management, the majority of responses were fewer negative surprises and greater certainty of profitability and financial stability. Within the complex world of life sciences research and development, add to that the demands of regulators, and a cohesive approach to risk management becomes even more essential.

A three-part series focused on insuring foreign human clinical trials

Most life sciences companies have never given environmental insurance a second thought. This could be due to lack of perceived exposure to such risk, management controls that are considered adequate, the policies do not cover the nature of the exposure, or the costs may be too high for the coverage provided. Environmental insurance has evolved to meet the changing needs and the biotech area is no seeing the continued evolution within the insurance marketplace.

William Gallagher Associates' annual survey of the insurance market takes a look at the coverage, rates, trends and specific risk exposures for the coming year. This year, we hope to provide our best estimates in light of the overall economic uncertainty as well as the potential impact the new administration may have on the insurance industry.

It probably comes as no surprise given the current economy that securities lawsuit filings increased significantly in 2008 compared to recent years, with 224 new securities lawsuits filed. The 2008 total represents a 30% increase over the 172 securities lawsuits filed in 2007, and an 88% increase over the 119 securities lawsuits filed in 2006. This also represents the highest annual filing total since 2004 and there are indications this will continue into 2009.

Data breaches are costing the U.S. economy an estimated $45 to $50 billion annually. In the last few years more than 200 million payment cards have been compromised in the U.S. The data breach at TJX, which compromised more than 100 million credit and debit cards in 2005 and 2006, has already cost the company $65 million in litigation settlements with several northeastern banks and a reputed $24 million in an April 2008 settlement with MasterCard. When the dust clears, costs for TJX could exceed $250 million.