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
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?
Product Liability Insurance
What it covers:
If a customer files a lawsuit against your company, claiming that one of the products you sold or manufactured caused an injury or property damage, product liability insurance safeguards you from the legal costs of the case.
Why you need it?:
This policy protects an organization from lawsuits relating to its products. Even if your business did nothing wrong, defense fees could still add up quickly in a frivolous lawsuit. Product liability is essential for manufacturers and retailers, who are both held responsible for their products.
General Liability Insurance
What it covers:
This covers the organization from some of the fundamental risks that come with running an 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 a 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.
Professional Liability Insurance
What it covers:
Also referred to as “Errors & Omissions” or “malpractice” insurance. It covers HealthTech companies if an act, error, or omission committed in the course of the company’s performance of professional services is alleged to have caused a financial loss for a third party.
Why you need it?:
Complex litigation is expensive, and there’s a lot that can go wrong for HealthTech companies in particular. The policy responds to the threat of professional service disputes by paying legal fees and judgments or settlements that result from a lawsuit for an alleged failure in the provision of professional services.
Cyber Insurance
What it covers:
This coverage protects your organization from lawsuits, fines, and penalties arising from 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 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 phishing scams, generate online content (i.e., blog posts), or rely heavily on email communications, you need cyber liability insurance. HealthTech companies have sensitive information on patients, which is a highly visible target for hackers, and it should be protected.
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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