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The vaccines developed through 2020 targeting COVID-19 are an unprecedented achievement for the medical product manufacturing industry. Never before has a novel vaccine been developed and validated through clinical testing so quickly, and the results are nothing short of incredible.

Equally, we have never seen a new vaccine deployed as rapidly as the COVID vaccines will be through 2021. If all goes according to script, hundreds of millions of people around the world will be receiving a COVID vaccine this year. It will be no small feat for the medical product distribution industry to get the product to the people.

We spoke to Travis McIntosh, Underwriting and Product Manager of Industry Practices and Life Science Specialist in Asia Pacific to learn more about what all this means to insurers and the Life Science industry at large.


Travis McIntosh
Travis McIntosh
Underwriting and Product Manager of Industry Practices and Life Science Specialist in Asia Pacific, Chubb

What challenges do the new vaccines present for product liability insurers?

The key challenges for product liability insurers can be summed up in three categories – exposure to a multiple injury event, inability to enforce indemnity on behalf of insured distributors and limit stacking.


Multiple injury event

Whilst some products are using established technology platforms, the RNA-based vaccines are completely new, and the compressed development timeline means there is an increased risk of unexpected side effects which haven’t shown up in testing.

The riskiest period for any new drug is the first five years post-approval. Despite the best clinical testing processes, a rare side effect which occurs in 0.01% of the population is unlikely to be picked up, but that’s going to affect 100 people for every 1,000,000 dosed. When we map that against the numbers who will be dosed in the next 12–18 months there is an elevated risk of a multiple injury event and subsequent class action activity.


Difficulty providing indemnification

For some of the companies developing these technologies, this will be their first product to market. Consequently, there is a solvency risk which will drive them to seek higher than normal insurance limits and could make providing indemnification to distributors difficult once those limits are used up.


Limit accumulation

The risk of limit accumulation affects not just the original manufacturers, but also all the companies distributing on behalf of those manufacturers. All insurers looking to support companies within this ecosystem for product liability insurance will need to be cautious with deploying their finite capacity to mitigate this risk.


What influence has the pandemic had on cyber-related risks faced by Life Science companies?

Life Science firms are embracing and investing in new technologies to drive automation, efficiency and connectivity in both R&D and production, but the benefits gained could be lost if not managed properly against the cyber risks that can disrupt these new dependencies. Even before the pandemic, cybersecurity was one of the top risk-management priorities for the industry. In fact, when Chubb in the United States surveyed a panel of middle-market Life Science firms in late 2019, 52% of respondents said they had experienced a cybersecurity breach. We observed a similar trend in the Asia Pacific, which suggests the prevalence of cyber threats across the globe.

With the onset of the pandemic, IP which holds the potential cure for COVID becomes extremely valuable, and quickly became a prime target of both cyber terrorists and some governments. At a panel discussion we hosted at the Ausbiotech conference in Melbourne last year, a cyber security firm representative noted that the company had seen an increased number of attacks being levelled against companies operating in the Life Science sector. 

With these developments in mind, having robust systems in place to protect IT networks and data from cyber threats has become more important than ever.


What can Life Science companies do to manage COVID-related disruptions and delays to their supply chain network?

Life Science supply chains are among the most complex in the world so they’re susceptible to COVID-related disruption. The pandemic has impacted supply chains globally, and weak links are being uncovered quickly.

Production delays present many potential risks and liabilities to Life Science companies. To minimise exposure, they need to thoroughly validate potential supplier partners to ensure they will be able to cope with any contingencies that arise.

Recovery from any disruption hinges on effective planning, education and execution. In addition to having their own Business Continuity Plan (BCP), companies should not only diligently put that plan to test (which they probably had ample opportunity to do last year!), but also run mock disruption events annually.

If you need an effective prescription for navigating the uncertainties facing the Life Science industry, please reach out to Travis at

No part of this article may be reproduced in any written, electronic, recording, or printed form without written permission of Chubb.

Disclaimer - The content of the above article is not intended to constitute professional advice. Although all content is believed to be accurate, Chubb Insurance Singapore Limited (Chubb) makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content of this article. Users relying on any content do so at their own risk.

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