Overview of the Dietary Supplement and Nutraceutical industry

Dietary Supplements and Nutraceutical companies are a sector within the life sciences industry. It’s a highly innovative space focused on bringing new treatments and technologies to the market each year.

With individuals taking more interest in their overall health, Dietary and Nutraceutical companies are evolving rapidly. Every year, there are discoveries and developments with the potential to improve the lives and health of people all over the world.

However, with such rapid growth and expansion comes increased exposures, as well. Because Dietary and Nutraceutical companies are amongst the fastest growing industries, this market faces ever-evolving risks.

Some of the biggest risks Dietary & Nutraceutical companies face

Cybersecurity

The average cost of a data breach is over $4M, and yet, nearly 67% of pharmaceutical firms have experienced significant data breaches. With vast amounts of data, dietary and nutraceutical companies face intense vulnerabilities. From notifying customers to providing credit monitoring, the risk is high. What’s more, is that cybersecurity threats tend to keep pace with innovative technologies.

Supply Chain

Like most life science companies, Dietary and Nutraceutical companies establish contracts with suppliers, manufacturers, and researchers worldwide. The US makes up only 45% of the global pharmaceutical market, after all. However, these professional relationships are delicate. Supply chains that stretch across the ocean can quickly disintegrate because of a natural catastrophe or global epidemic. Finding another subcontractor could prove to be time-consuming and costly.

Mergers and Acquisitions

Mergers and acquisitions (M&A) are a staple in any industry, but in the life science space, they tend to get complicated quickly. Various product development and patents muddy up the pipelines, and multiple subsidiaries in one organization make M&A a tricky process. To protect the transaction, it’s essential to identify potential problems while safeguarding company assets.

Product Failure

If a product fails to produce the expected results, it could mean a massive loss for a Dietary and Nutraceutical company. That said, around nine in every ten drug developments aren’t ever approved. When new products do hit the market, only 10% of them are successful. From advertisement to usage warnings, product failure presents a significant exposure in this industry.

Regulatory Risk

Aside from developing a safe, secure, and sellable product, complying with layers of complex regulatory requirements is another widespread concern. While the success or failure of a product is undeniably a risk, a more significant issue is upholding the laws and requirements every place you do business.

Why is Insurance for Dietary & Nutraceutical Companies Important?

The life science industry has unique risks that no other market faces. Not only do Dietary and Nutraceutical companies try to improve people’s health and lives, but they do it while navigating intense obstacles.

From FDA regulations to accurate advertising, from product development to acquiring patents, Dietary and Nutraceutical companies have many hurdles to overcome. Maintaining momentum in the market requires layers of protection from multiple angles.

Insurance is vital for Dietary and Nutraceutical companies to protect them from the cost of legal defense, regulatory action, consumer complaints, and a slew of other complicated roadblocks.

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What Insurance do Dietary & Nutraceutical companies need?

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How much does Insurance for Dietary & Nutraceutical Companies cost?

The cost of insurance for Dietary & Nutraceutical companies will depend on several factors, 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 Dietary & Nutraceutical Companies that need insurance

To play a crucial role in the life science industry, it’s essential to protect your Dietary and Nutraceutical company. Here are some popular business practices that need insurance:

  • Suppliers
  • Manufacturers
  • Researchers
  • Developers
  • Packaging services
  • Distributors
  • Mixing services
  • Chemical product sourcing services

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