Intuitive Insurance Articles

Arranging Insurance for a Global Clinical Trial

Designing an insurance program for a global clinical trial is an exceptionally complex task. Exposure to experimental products presents a multitude of risks for all stakeholders, be they institutions, investigators, contract research organisations (CROs), sponsors, ethics committees (ECs) / institutional review boards and/or trial participants themselves.

Unfortunately, risks are unavoidable in any clinical trial. Even with comprehensive preclinical research and high-quality study design, conduct and monitoring, risks such as bodily injury to participants and/or financial and reputation risk to trial stakeholders (through legal proceedings and judgments) are a possibility. However, these risks can be mitigated or transferred through a well-designed insurance program.

This post aims to summarise some of the key factors sponsors should consider when arranging insurance for a multi-national trial. The importance of each of these lie in the complexity of arranging clinical trial insurance across multiple jurisdictions, while balancing the interests of key stakeholders and the various country insurance regulations. Errors or delays in this process could hinder research approval, thus result in a significant financial impact on your business.

Firstly, it’s important to understand key terms that will arise during this process.

‘Admitted’ insurance is:

  • written by an insurer who is authorised to transact business in the country or jurisdiction where the risk is located;
  • and in compliance with the local insurance regulations and laws, including local tariffs, taxes and forms.

‘Non-Admitted’ insurance is:

  • written by an insurer who is not authorised to transact business in the country or jurisdiction where the risk is located.

 

A sponsor conducting clinical trials internationally would normally take out a global master policy covering activities in all jurisdictions, and local policies where legally required, or where it makes sense to do so. For example, it may be less expensive to purchase cover locally, or a specific coverage item is included as standard under a local policy wording which is unique to that particular country.

As with all types of insurance, it is vital that the master policy and any additional policies are structured correctly so that the program provides exactly the desired cover and the extent of protection is clear.

In some countries, clinical trial insurance is compulsory in order to run a study. In addition to being compulsory, the laws and regulations of some countries, such as Russia, China and most of Europe, require companies to take out an admitted insurance policy. Other markets are more liberal and allow a non-admitted master policy issued in another country to cover local trial exposure.

Aside from situations where you are legally required to do so, below are some considerations for taking out admitted insurance to cover the local risk:

  • Does the evidence of insurance have to be for the full study period? If so, often the global master policy will be issued on an annually renewable basis and you may need to consider a local policy for the life of the clinical trial.
  • In the event of a claim, do you want in-country claim payments to be settled in local currency by a local claim adjustor? Where you rely on the master policy issued in Australia, for example, claims will be managed by the insurers’ Australian claims team and payments would be issued to you, as the named insured, in Australian dollars (at the rate of exchange on the date the judgment is rendered, settlement is agreed, etc).
  • Is there a particular item of coverage item that is unique to that jurisdiction that is not covered by the non-admitted master policy? For example, it may be common for a local policy to include accident cover for patients travelling to and from the hospital. A master policy may not include this coverage and you may require local coverage for EC approval, or to protect your reputation in that country.
  • Is it your business partners’ preference for an admitted policy to be issued? Where you are required to note your partner as an additional insured, the local CRO, for example, may not be comfortable relying on a foreign insurer to indemnify them in the case of a claim.

 

It is possible to purchase a local insurance policy in each country included in a trial however, it’s likely the additional cost and administrative burden would be prohibitive.

In order to harmonise protection, while achieving premium economies and a reduction in touch-points, it is recommended you work with an insurer that has the capabilities to issue locally admitted country-specific policies in addition to a global master policy that provides additional coverage.

This global master policy should include difference in conditions (“DIC”) and difference in limits (“DIL”) coverage. DIC is designed to respond in the event a claim is excluded by the local policy, but would be covered under the terms and conditions of the master policy. The limit of indemnity insured under an admitted policy would reflect local regulations and practices and may be far less than that available under the master policy. Where a local policy limit has been exhausted by any claim/s, the DIL extension will cover the difference up to the limit insured under the master policy. These coverage extensions are important when operating internationally as you can be certain of the cover provided, particularly where a local policy is written in a foreign language. The master policy clearly sets out the coverage and limits afforded and this would sit above any local policy. See example structure Figure 1.

Global Insurance Program Structure

If you were to run multiple trials with different indications or compounds, the final decision (in relation to insurance policy structure) would be whether to take out a stand-alone or blanket policy. Any locally admitted policy would most likely relate to the specific trial being undertaken. However, the master global policy can cover all trials being conducted during the policy period (including run-off for completed trials), or a separate policy can be taken out for each study. The blanket cover approach will be less expensive and will minimise administration time and cost, whereas the stand-alone option will quarantine the limit of liability for the specific trial insured.

Various ECs can have different standards, even within the same country, and their requirements could potentially be in addition to the country regulations. For this reason each, each country and problem needs to be solved on a case-by-case basis.

Tips to avoid potential roadblocks include:

  1. Start early! You should begin discussion with your broker and understand the insurance requirements as early as the initial planning of a foreign human clinical trial.
  2. Look at each jurisdiction in isolation, and then understand how the insurance fits into the broader global program.
  3. Where a locally admitted policy is required, you should obtain a draft copy of the policy and forward to your CRO for review. Any necessary changes should be identified as early as possible so that you meet approval deadlines. Delays or errors in certification can result in delays in approval.
  4. Obtain draft Certificates of Insurance for review. The details required may not be finalised (e.g. participant numbers), but this will allow confirmation that the information noted is as required and meets ECs standards.
  5. If ECs require originals of certification, ensure you plan for the extra turnaround time if any amendments are required. Some countries require original certificates to be countersigned by both the Insured and Insurer, so you should allow for the time this would take.
  6. Cost the insurance up-front where regulations require ‘run-off’ cover (liability coverage for a specified period after completion of the trial). This cover is generally priced in addition to the policy premium. This will give you an accurate comparison for the total period the insurance will be required.
  7. Understand what automated systems the insurer has – for example, if you need to increase participant numbers, do you have the ability to change and for certificates to be generated instantaneously or does this need to go through multiple hands prior to being issued.
  8. In additional to trial documentation, provide as much information as possible reflecting your practices and procedures for managing your risk. Such information could include your selection criteria, quality controls, and anything else to help the insurer feel comfortable with the risk. This will ensure the best possible result on the master policy in respect to price and coverage.

 

In summary, just as no two research programs are the same, an insurance program for one company would not suit another. Insurance for a clinical trial needs to be tailored to suit your individual needs.

It is crucial to engage in ongoing dialogue with your provider, in order to determine the most appropriate structure and to ensure adequate cover is provided. Many factors can affect both price and coverage, so it is important to take a holistic approach, rather than making a decision soley based on price.

The huge coverage differences in clinical trial policies, along with the various interested parties, make coordinating insurance for a global trial a complicated task. Consequently, clinical trial insurance is highly specialised and so, it is advisable to use a broker with the knowledge and expertise in this area, and who has the capabilities to choreograph a global program.

Partnering with a broker who has the necessary skills and experience will ensure the process is as smooth as possible and will avoid leaving you in a position where you have inadequate insurance protection, or where the cost is too high. Ultimately, a good broker and capable insurer will allow you to focus on what is most important for your business, which is a successful research program bringing new drugs and devices for the benefit of the wider community.

If you would like more information, please drop us a comment, email or call Intuitive on (02) 9493 6111.

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