19 August 2025
In the high-stakes world of life sciences, innovation is critical—but so is risk management.
Companies in biotechnology, pharmaceuticals, and medical technology operate in one of the most highly regulated and scrutinised sectors, where leadership decisions can have far-reaching legal and financial consequences. This is why having the correct Directors’ and Officers’ (D&O) liability insurance is essential.
Unique risks in life sciences
Life science companies face strict oversight from global regulators such as the FDA and EMA. Leaders in this sector must manage clinical trials, protect intellectual property, follow evolving compliance standards, and respond to investor demands. Even a single setback, for example a failed trial, a delayed regulatory approval, or a lack of transparency with shareholders, can lead to costly litigation or regulatory action. These risks often fall directly on directors and officers, making strong protection essential.
Protection against personal liability
D&O insurance protects the personal assets of executives and board members if they are sued for decisions made in their roles. In life sciences companies, this cover is often essential to attract and keep top leaders. Without it, many may refuse board or executive positions because of the high personal risk.
The critical importance of tailored coverage in life sciences
Not all D&O policies are the same. Life sciences companies need tailored coverage that reflects the specific risks of their industry. This includes coverage for regulatory investigations, securities class actions, and derivative claims, as well as adequate limits to match the company’s size, funding stage, and geographical footprint.
Investor expectations and Corporate Governance
Investors, particularly venture capital and private equity firms, frequently require robust D&O coverage as part of funding agreements. It’s a signal of sound corporate governance and risk mitigation. Insufficient or poorly structured coverage can delay deals or deter investment altogether.
Conclusion
In a sector where the margin for error is slim and the consequences of leadership decisions are significant, appropriate D&O liability insurance is not just a protective tool—it’s a strategic asset. Ensuring the right coverage is in place helps life sciences companies safeguard their leadership, attract investment, and pursue innovation with confidence.
‘Directors’ and Officers’ liability insurance is a regulated product and may be subject to underwriting criteria, terms, conditions, and fees. Please contact us to discuss your specific requirements.’
