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Spotlight on: Clinical trial insurance

This article addresses commonly asked questions about clinical trial insurance for medicinal cannabis and pharmaceutical businesses in Australia.
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Clinical trial insurance is a policy that few brokers and companies in the sector may truly understand. Marsh and leading clinical trial insurer Newline Group recently joined forces to share our knowledge with businesses in the medicinal cannabis sector as part of our partnership with Medicinal Cannabis Industry Australia (MCIA).

To further support the increase in knowledge and awareness of your business insurance responsibilities in this space we have collected the key takeaways and discussion points from our recent session.

What is clinical trial insurance?

Clinical trial insurance provides cover for a business’ legal liability when conducting said trials. It will usually extend for the life of the clinical trial including run-off cover for after the trial has been completed. The cover can be broken up into two parts:

1. No-fault compensation in the event of a trial participant suffering harm, which is a requirement and will be noted in the protocol document developed when creating a clinical trial

2. Cover for your legal liability which picks up any gaps outside of the requirements of the protocol document

Who is responsible for taking out a clinical trials insurance policy?

It is important to note that contracting out a clinical trial to a third party does not absolve your business from responsibility. As the sponsor of a trial, it is a requirement that your business takes out a clinical trials policy to provide cover.

What responsibility does the third party conducting the clinical trial have?

The company administering the trial has the responsibility to deliver as per the protocol document. In the event there is an error in how this is administered and a claim arises, there is potential for this to fall on their insurance. This is why it is important to check the business conducting your trials has the correct insurance in place.

What is the process of getting a clinical trials insurance quote ahead of time?

For complex clinical trials that may take place in multiple countries, it is important to give your broker and insurer plenty of time to obtain quotes for this cover. There is no issue with providing a draft protocol document when requesting a quote as this will have most of the information an insurer needs and any changes to the final document would likely be minimal.

Should I get a policy that renews annually or one that lasts the lifetime of the clinical trial?

If your business is running a high volume of clinical trials located in the same state, it can be beneficial to purchase an annually-renewing policy as this allows for shared limits across all trials, thus reducing costs. However, if you are only conducting trials intermittently, it may be more cost effective to take out a single policy for the life of the specific trial.

Do coverage requirements differ between states in Australia?

It is important to note that there are different cover limits required for your clinical trial policy depending on the state in which you are conducting it. These requirements will be determined and set out in the protocol document and will relate to both your limit of liability and the extended reporting period.

Continue the discussion with a specialist broker

Marsh is proud to be a risk advisory partner for the medicinal cannabis sector and provide meaningful insurance and risk management solutions. As the world’s largest insurance broker we are well positioned to leverage our global knowledge and experience to help educate both medicinal cannabis businesses and insurers in this sector to help achieve optimal outcomes.

If you have any questions about the content covered in this article or the risks and insurance coverage requirements for your business, reach out to your Marsh risk advisor today or contact us

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. LCPA: 22/398

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”