16 October 2018

The Big (Uninsured) Risk for Early Stage Life Science Companies

“Until now, we have been unable to get insurance for our clients that responds to the risk exposure caused by a loss of goods while in transit or at warehouse or clinical trial locations.”

Early stage Life Science companies are invariably betting a great amount of capital on the human clinical trial testing of their first products. Immense work and expense go into lining up clinical trial sites, scaling up early manufacturing (or contract manufacturing) and building the team of Clinical, QA/QC, Medical, Legal, and related resources.  All of that overhead is devoted to just one thing— advancing the clinical material into clinical trials. However, something as simple as spoilage of a shipment can lead to an immense uninsured loss.

Time to market may be a huge factor of course, but risks associated with idle unproductive employees and the associated salaries, benefits, rent, and other overhead that often add to losses while the batch from the shipment is being recreated are usually uninsured with standard Ocean Cargo policies.

This proverbial tightening of the funnel should be a great target for important insurance coverage but has been left uninsurable by incumbent insurers in the market. Amy Sinclair, Life Sciences Practice Leader in the Boston office of Arthur J. Gallagher said, “A loss of clinical trial material in transit can lead to a Business Interruption and Extra Expense Insurance loss. We can cover that under a Property Insurance policy while the goods are in a fixed location like our client’s manufacturing building.  But until now, we have been unable to get insurance for our clients that responds to the risk exposure caused by a loss of goods while in transit or at warehouse or clinical trial locations.”

Corvus Insurance, with a deep understanding of Life Sciences logistics, has developed a proprietary Extra Expense form in an attempt to make whole those Life Science companies that suffer an insured loss (from spoilage or any other insured peril – theft, fire, windstorm, etc.).  

“This new coverage from Corvus fills a gap that responds to a critical, but previously ignored, risk exposure for Life Science companies,” said Steve Sawyer of Woodruff Sawyer in San Francisco. The policy form is available on request from Corvus.

Corvus Insurance Holdings underwrites Smart Cargo™ Insurance for the Life Sciences and Food industries on behalf of Argo Insurance Group (Best’s Rated, A, XIII).  Brokers on our platform are bringing needed, innovative and differentiated product into the market and great value to their clients.

Mike Karbassi

Mike Karbassi is Vice President and Head of Cyber Underwriting at Corvus. He specializes in Network Security, Privacy Liability, Technology E&O, Media Liability, and Miscellaneous Professional Liability. Karbassi has over a decade of experience in insurance and is a graduate of the Boston University Questrom School of Business.

Gerritt Graham

Gerritt is the Chief Commercial Officer at Corvus. He has over 20 years of sales and marketing experience, primarily focused on technology and data solutions for the financial services industry.

James McElhiney

James co-founded Corvus and is the company’s Chief Technology Officer. A 30+ year technology veteran, Jaimie most recently served as CTO of Iora Health and previously co-founded Gazelle.

Mike Lloyd

Mike Lloyd is the Co-Founder and Chief Product Officer of Corvus Insurance. Previously, Mike co-founded Poncho, a personal lines agency InsurTech startup, and was a venture investor at FJ Labs. Mike has an MBA from Harvard Business School and engineering degrees from Virginia Military Institute and MIT.

Phil Edmundson

Phil is the founder and CEO of Corvus. A 30+ year insurance veteran, Phil co-founded broker William Gallagher Associates (acquired by Arthur J Gallagher in 2015) and was an active leader in both the Worldwide Broker Network and Council of Insurance Agents and Brokers. Phil is the Managing Partner of Edmus Ventures where he invests in InsurTech companies including Verifly, Wellthie, Agentero, and Cover Wallet, and serves on the board of Cover Wallet.

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