Overview of the Biotech industry
The biotechnology industry is an unpredictable sector due to the scientifically intensive nature of the operations conducted at the companies. The industry arose in the 1970’s with the goal of enhancing the quality of human life by servicing markets including industrial, agricultural, medical, and environmental. Biotech firms differ from the traditional drug makers in that they reject synthetic ingredients and instead utilize natural ingredients. Biotech firms are also the most research-intensive organizations in the world. Increasing demand for agriculture based products should enhance the biotechnology industry growth over the coming years, with expectations to reach USD 727.1 billion by 2025.
Some of the biggest risks Biotech companies face
Why is Insurance for Biotech Companies Important?
Protection of property: though many biotech startups focus on protecting their proprietary technology via patents, it is important to also consider physical property. Lab equipment, lab facilities, manufacturing tools, and many more items are worth a lot of money to a biotech operation. Property risks increase as your company experiences growth; the bigger you are, the harder you fall.
Securing continued funding: a valid concern for many biotech companies is attracting investors. Convincing investors to continue their funding is also another common task for biotech operations. As your biotech company grows and requires more funding, it is crucial to ensure smooth and legal daily operations contributing to that growth. Insurance for biotech companies also helps you to effectively deal with the FDA and other regulatory bodies.
Sustained growth: to sustain a startups development, it is critical to support your upward movement. For many, maintaining momentum means avoiding any setbacks, such as the loss of data. The availability of your product to the public increases your risk significantly and this risk becomes more relevant as the company grows.
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What Insurance do Biotech companies need?
Cyber Insurance
What it covers:
This protects your organization from lawsuits, fines and penalties arising out of a hacking attack or data breach. It can also reimburse the company for its direct expenses such as breach notification costs, credit monitoring, data restoration and forensic analysis.
Why you need it?:
If you collect any sort of personal or organizational information, have a “login” feature on your site, integrate with another organization’s systems in any way, have employees who could fall for a phishing scam, generate online content such as blog posts or even simply rely heavily on email communications, you need cyber liability insurance. SaaS companies are highly visible targets for hackers and, as such, should be protected.
Directors & Officers Insurance
What it covers:
Protects the company and key individuals from liability related to the management of the organization. Companies that indemnify their executives against certain covered claims can turn to their D&O policy for reimbursement. In addition, if the organization itself is named in a suit, the policy would defend the entity.
Why you need it?:
Ensures the company and its leadership is protected from legal liability related to allegations of breach of fiduciary duty and other management-related claims. It provides the capital required to absorb certain legal costs without mortgaging the future of the entire organization.
Property Insurance
What it covers:
Building coverage protects properties that are owned, while business personal property coverage reimburses for covered damage to the contents of a building. Lost income and extra expenses caused by a covered loss can also be addressed by business interruption coverage.
Why you need it?:
Any company with a physical presence runs the risk of their physical property being damaged or destroyed. If you hold large amounts of inventory or own equipment you’ll often have a lot at stake. On top of that, renting temporary office space after a fire is a surprise cost that no business needs to be caught off guard by.
General Liability Insurance
What it covers:
Covers the organization from some of the fundamental risks that come with running an SaaS organization, such as ‘slip and fall’ claims, damage to a third party’s property, products liability claims, damage to rented space, and personal or advertising injury claims.
Why you need it?:
It forms the foundation of any risk management program. On top of protecting the company from legal liability caused by bodily injury or property damage, this coverage is usually required in contracts like office leases and vendor agreements.
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How much does Insurance for Biotech Companies cost?
The cost of insurance form biotech companies will depend on a number of things including the size of the company and the stage of the company in its development process. Other factors include:
- Exposures: risks being insured.
- Company practices: views on safety, compliance, and risk management.
- Program structure: the amount of deductible and willingness for a company to assume more risk
- Claims history: the type and amount of past claims against the company
Types of Biotech Companies that need insurance
Ag-biotech
Agricultural biotechnology has taken significant leaps and bounds. Many transgenic crops are the norm now, such as soybeans and wheat. Additionally, up to 90% of corn, soybeans, and cotton grown in the US are bioengineered. Ag-biotech’s main focus is crop improvement but biotech-enhanced farm animals is following closely behind.
Biopharma
Biopharma has introduced an advanced approach to drug development. The primary aim is to develop new drugs at a faster pace.
Biotech companies we work with
