Clinical Trial Insurance: Advantages of Blanket Coverage in Clinical Trials

By | April 30, 2013

Configuring all the details to launch a clinical trial is a cumbersome task for most companies.  When it comes to purchasing an insurance policy for a clinical trial, there are many factors that are important to understand.  As is often the case with insurance policies, the details can be daunting.


  • Are we better off with blanket coverage, or a limited policy that requires endorsements?


  • Is coverage available in the region/country where the clinical trial will take place?


  • Can we afford the policy we want?


Insuring a clinical trial properly is a large piece of the puzzle when it comes to future successes.  Finding the right fit for the trial is crucial.  Which type of coverage does your trial need?



Blanket Coverage vs. Coverage by Endorsement


The breadth of clinical trial coverage depends on whether trials are covered on a scheduled or a blanket basis.


Coverage by Endorsement Requires That All Trials Be Identified. Some insurance carriers provide clinical trial coverage by an endorsement to the products liability-completed operations policy.  If a particular trial is not specified and scheduled on the endorsement, it is not covered.   Businesses sometimes are forced to deal with extra red tape as they apply for each individual trial to be covered.


Blanket Coverage Is More Inclusive. In contrast, clinical trial coverage provided on a “blanket” basis means that all trials in progress at the policy inception date and started during the policy period are automatically covered. Trials are not individually scheduled, so no endorsement to the policy is necessary.  This type of coverage often gives companies more peace of mind—knowing that they’re covered on all trials.



Treatment of New Trials


New trials that begin during the policy period are handled differently depending on the coverage provided.


Coverage by Endorsement Means New Trials Are Subject to Underwriting Review.  Insurance policies that require a schedule of clinical trials do not provide coverage of new trials unless the insurer is notified in advance of the trial and agrees to add the specific trial to the policy.


Thus, additional paperwork and data will be required by the insurance company prior to extending coverage. This means there may be some lead time prior to coverage becoming effective, which often results in a delay with the trial start date. Failure to report the new trial under such policies may leave a company without coverage.  Even with notice, the insurance carrier may decline to add coverage for the new trial. Adding the new trial also may have premium implications for the sponsor, adding to insurance costs.


New Trials are Covered Automatically if Done on a Blanket Basis Blanket coverage works differently.  New trials that begin mid-term are automatically covered and there are no reporting requirements or additional premium charges imposed by a new trial.



Changes to Protocols

Changes to protocols that occur during the course of the trial also may impact coverage.


Notification of Protocols Changes May Be Required. Some insurance companies require notification of changes to protocols.  If they don not receive such notifications, trials may not be covered if and when a claim arises.  As a result, it is important that the clinical trial sponsor properly notifies its insurance carrier of any protocol changes.


With Blanket Coverage There Are No Reporting Requirements Under blanket coverage, it is understood and expected that trial protocols may change.  Any changes to protocols do not add any additional reporting requirements, nor will they jeopardize coverage or premium.



Auditing Requirements

Increasing the number of participants may impact both coverage and premium if the policy is subject to audit.


Additional Audit Premium May Be Assessed at the End of the Policy Period.  As part of the insurance application process, a clinical trial sponsor must provide an estimate of the number of participants that will take part in each clinical trial to be covered.  Many insurers use the sponsor’s estimate to set a “per participant” charge and to calculate a deposit premium.  This type of policy is termed an “auditable” policy, which means the final premium to be charged will be determined by an audit at the end of the policy period.  An auditable policy has several downsides. First, at the end of the policy period, the sponsor must submit updated data regarding the trials conducted during the period. Collecting and assembling the data can be a time-consuming process, especially when there are multiple clinical trials being conducted at different sites.  Audits also can be burdensome, as the insurer may require the data to be broken down by study, phase, site, and participant population, etc.  Lastly, any increase in the actual number of participants, in comparison with the original estimate, generally means an additional, unexpected, and unbudgeted premium charge.


Non-Auditable Policies Translate into Predictable Insurance Costs In contrast, non-auditable policies are not rated based on the number of participants.  Although the number of participants does factors into the premium charged, the initial premium charged is not subject to change.  Since insurance costs are known at the outset, additional, unforeseen charges are avoided.


Several insurance carriers offer blanket coverage in their standard policies, while others will require coverage via endorsement.  When selecting a policy type for clinical trial insurance coverage, it is crucial to know and understand the options. Making the wrong choice may result in unnecessary and charges at the end of the trial.



 By Joshua Creer

The Buckner Company

Life Science Practice Team


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