30 July 2025
For life science companies, having the right insurance coverage is essential to protect against a wide range of risks, such as product liability and equipment failure to cyberattacks and clinical trial complications. However, one often overlooked detail can jeopardise the entire policy: the accuracy of the business description.
The hidden risk of incorrect descriptions
Insurance policies are built around the specific nature of a company’s operations. In the life science sector, this can range from drug development and manufacturing to diagnostics, laboratory services, and clinical trials. If the business description listed in the insurance policy does not accurately reflect the full scope of activities, insurers may view certain claims as outside the scope of coverage.
This can result in delayed payouts or even complete denial of claims—often at the worst possible time, such as during a product recall, lawsuit, or regulatory investigation.
Why it matters more in life sciences
Life science companies operate in a highly regulated, high-stakes environment where the risks are unique and often complex. Activities like handling human tissue samples, working with live viruses, or storing temperature-sensitive products carry very different exposures than standard manufacturing or service businesses.
If these specific activities aren’t clearly stated and agreed upon in the policy, insurers may argue that the risk profile has changed—nullifying coverage or reducing claim payouts.
Best Practices for avoiding claim rejection
- Be specific and complete: Ensure the business description includes all core and ancillary operations, such as research, clinical trials, consulting, or international sales.
- Update regularly: As the business grows or pivots, update the insurer—especially before renewals or major changes in operations.
- Consult your broker: Work with an insurance broker experienced in the life sciences sector to ensure descriptions align with industry-specific risks and exposures.
Protecting the future
In a sector where innovation is constant and margins for error are slim, an incorrect business description can undermine the very protection a policy is meant to provide. Taking the time to get it right ensures that when a claim is made, the coverage is there—allowing life science companies to stay focused on what matters most: advancing science and improving lives.
Why choose Verlingue when it comes to life sciences insurance
At Verlingue, we have extensive expertise in pharmaceuticals, biotechnology, medical devices, and healthcare, enabling us to fully understand the complex regulatory landscape and significant risks you face. Whether it’s clinical trials, product liability, data protection, or compliance, we know how to navigate the unique challenges of life sciences insurance. With tailored insurance and risk management solutions based on the level of coverage you select, we help protect your business at every stage while supporting your innovation. Partner with Verlingue to safeguard your future in the life sciences industry.
