When the Worst Happens
Business insurance exists to help companies when unexpected events and damages occur – so you need to have the right policy in place
Stephanie Sutton | | Interview
If you are a scientist starting up your own business, you’ll no doubt be excited and passionate about the science you hope to one day bring to market. But running a company is not just about making the science happen. Businesses require strategies and a significant amount of administrative effort. Insurance is one element of running a business that is easy to get wrong. The business of life sciences comes with unique risks and you need to ensure you are covered if something happens to your laboratory or manufacturing facility. For smaller companies, navigating the insurance landscape can be a minefield. Even though you may not have a commercial product, your R&D will still carry a high value.
We spoke with David McInally from UK insurance broker, Reich Insurance Group, to find out what you need to know about insurance if you’re thinking of starting up a life sciences company.
Can you give us the “101” on insurance for life sciences businesses?
Although insurance isn’t inherently complicated, when it comes to business insurance there are often multiple facets to consider; therefore, it is understandable why many companies – particularly start-ups – can get it wrong.
For a life sciences company, a normal business insurance policy – which covers a standard office – is not sufficient because there are unique risks in science, especially R&D and clinical trials. Consider the potential consequences of product spoilage, necessitating new product to be manufactured and the potential subsequent loss of business. If a company has, for example, been culturing something for five or six weeks and something happens – fire, flood, water damage or even accidental damage – the cost implications can be terrifying. How will you pay for the loss if you don’t have the right insurance? And, for a small company, even a small loss can be financially devastating. It is unlikely investors will want to help out – and a small company won’t have the cash available to remedy the situation. You need life science insurance that covers your offices, labs, manufacturing plants, and the cost of your R&D projects.
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