The Hanover Insurance Group

The value of claims-made policies for life sciences customers

Healthcare professional safely helping woman on crutches during physical therapy session.

The life sciences industry is constantly evolving. With evolution comes innovation and advancements to the field, but it also brings new risks and new exposures. For most life sciences customers, a claims-made policy may better meet their needs as it is triggered by a claim being asserted against the policyholder.

Why claims-made?

A claims-made policy applies to bodily injury and property damage which did not occur before the policy’s retroactive date, if any, shown in the declarations or after the end of the policy period, and a claim is first made against the insured during the policy period or any extended reporting period.

Claims-made policies often have negotiated policy dates, providing coverage that may extend beyond the policy period. These policies cover incidents that are reported during the policy period or extended reporting period and which occur after the policy’s retro date.

A retro date in a claims-made policy eliminates coverage for bodily injury or property damage that took place prior to a specified date, even if the claim is first made during the policy period.

An extended reporting period is a designated period after a claims-made policy has expired, during which a claim may be made as if the claim had been made during the policy period.

A strong foundation with claims-made policies

With a claims-made policy, customers can be insured for risks resulting from past services under their present policy as long as the claim occurs after the policy’s retroactive date. This provides added peace of mind to customers in the fast-progressing life sciences industry.

In addition, with a claims-made policy, recently-increased limits and broadening endorsements may apply to past incidents that occur after the retroactive date and are reported under the current policy.

Uncertain occurrences

Some of your clients may still have occurrence-based coverage. Because a claim can sometimes be latently filed 10 years or more after a products liability incident, an occurrence-based policy may have the following uncertainties:

  • Which prior occurrence policy will respond to the claim?
  • Is the prior policy’s insurance company still solvent?
  • Does the prior policy have adequate limits for the current claim?
  • Did the prior policy include exclusions for this type of claim?

Relying on prior policies to cover today’s claims is precarious in the ever-changing life sciences industry. Because risks are not the same as they were years ago, exclusions may leave the occurrence-based policy holder with an unstable foundation.

Claims-made policy in action

For example, your medical device manufacturer customer purchased a “products – completed operations” policy on a claims-made basis. Their policy is effective from January 1, 2019, through December 31, 2019, and has a retro date of October 1, 2018. They report a claim in March of 2019 for a loss that occurred on November 10, 2018.

Since the incident was reported during the policy period and occurred after the retroactive date, the claim should be covered.

The advantage of Hanover Fusion

With the Hanover Fusion claims-made form, customers get access to key coverages, including products and completed operations, errors and omissions, information security, privacy and personal injury, media and content coverage and more.

While other carriers may try to put a box around the life sciences industry, The Hanover’s form provides coverage for both life sciences and non-life sciences risk. By writing blended risks for both medical and non-medical exposures, The Hanover supports the growth and change that’s constant within the life sciences industry.

With a Hanover claims-made policy, a life sciences policyholder enjoys access to robust insurance solutions, claim and risk management expertise, expert underwriters and invaluable peace of mind.

For more information on Hanover Fusion, contact your Hanover life sciences underwriter.


This material is provided for informational purposes only and does not provide any coverage or guarantee loss prevention. The examples or circumstances included in the material are provided as hypotheticals and for illustrations purposes only. The Hanover Insurance Company and its affiliates and subsidiaries (“The Hanover”) makes no warranty on the accuracy of the information contained in the material and specifically disclaim any warranty that acceptance of any recommendations, advice or suggestions provided creates an obligation, guarantee loss prevention or compliance with any laws or regulations. By providing this information, The Hanover does not assume and specifically disclaims any duty, undertaking or responsibility to you. The decision to accept any recommendations, advice or suggestions must be made by you.

Coverage may not be available in all jurisdictions and is subject to The Hanover underwriting guidelines and the issued policy. Refer to the issued policy for the coverage provided.