Like most industries, life science is facing a potentially turbulent era on the health and regulatory front.1 Emerging technologies, shifting provider roles and new legal threats are opening costly coverage gaps in product and professional liability that are impacting business leaders and their healthcare teams.
“In life science, we’re seeing new liability risks emerge for company leaders and the healthcare professionals who test and use their products. These risks can pose unique challenges throughout a product’s life cycle and require insurance experts who can spot and close these coverage gaps when they happen,” says Lauren Goren, life science underwriting director at The Hartford.
“Depending on the product and how it’s researched, tested and used over time, we are seeing convergence of product liability and professional liability issues we’ve rarely seen before. And that requires risk experts who can spot coverage gaps before issues happen,” adds Cinthya Rios, underwriting director for health care professional liability insurance at The Hartford.
What’s Driving the Convergence of Life Science and Healthcare Liability Risks
Today’s life science leaders are surrounded by reasons to reevaluate a combination of new risks in their manufacturing operations and healthcare environments that employ patient care and lab professionals. Goren and Rios begin by explaining three critical operating realities that have brought product and professional risks closer together over the past five years:
- Disruptive technologies: Life science dealmaking activity related to artificial intelligence (AI) reached all-time highs in 2024, with a majority of life science leaders planning an increase in investments for data, digital and AI investments in 2025.2, 3 Such innovations have the potential to speed medical research and bring valuable products to market faster. However, insurance experts warn these advancements are moving so quickly it can become tougher for business leaders to determine whether potential liability is due to product or medical error. Says Rios, “Experienced insurers have always been there to evaluate potential risk when life science and healthcare teams collaborate. Today’s breakthroughs may call for more evaluation on a regular basis.”
- Social inflation: Headlines surface daily about consumers and businesses filing lawsuits over products and services they claim have gone wrong. This is one major factor driving a phenomenon known as social inflation, which happens when issues beyond ordinary economic factors influence more frequent lawsuits and potentially higher awards.4 Goren says life science companies have traditionally faced greater monetary risk in liability cases because “Individual patients are less likely to sue their own health providers due to their personal relationship, and attorneys are also aware that businesses tend to be insured for higher limits than individual healthcare providers.” Add a more complex liability environment due to technological advancement, and that’s where social inflation could go higher, Goren notes.
- New delivery models: From telehealth to faster development processes for high-demand treatments, life science companies and healthcare partners have raised the bar on innovation--and a potentially new series of risks. “Life science companies are doing traditional R&D (research and development), but some may be adding a delivery component like telehealth, individualized testing or product customization for individual patients,” says Rios. “That’s the future of medicine. But life science leaders need to make sure their product and professional liability coverage provides the right amount of protection so they can innovate safely.”
Where Serious Coverage Gaps Can Emerge
Goren and Rios recommend that life science leaders consider insurers who have deep understanding of life science research and development and the healthcare professionals who bring them to patients. These relationships are crucial for asking the right questions about risks that leaders may not be aware of, explains Rios.
“It’s important to realize that health care innovation is being driven by a wider range of experts than ever before at all stages of delivery,” says Goren. “Evolving business models can introduce new coverage gaps if life science leaders and their healthcare partners fail to see exposures along the way.”
As healthcare technology and product innovation move ahead, both can open coverage gaps between traditional product and professional liability coverage due to more complex risks that may happen now or in years to come. Goren and Rios offer three real-time examples of where such risks can happen.
1. Diagnostic Testing
One of the oldest life science liability risks is taking on more complexity as labs are becoming more specialized with some even developing and branding their own versions of established tests.
“If a faulty test kit results in a false negative, that’s traditionally stopped at a product liability claim,” explains Rios. “However, we are now seeing labs packaging their own test kits under their label. So, for the manufacturer working with that lab and the lab itself, product liability exposure still exists. But if something goes wrong in the interpretation of the lab-developed test, professional liability exposure could become a factor.”
2. Dietary Supplements
Continuing the test discussion, Goren points out that non-prescription supplement manufacturers have also embraced direct consumer testing to offer a more personalized health experience.
“Maybe a manufacturer distributes individual customer tests with personalized insights developed by AI, and they employ healthcare workers to explain the results to customers,” says Goren. “Does a manufacturer’s current liability coverage contemplate all the potential claims that could be associated with this type of service? Life science leaders may not always know to ask.”
3. Drug Compounding
The explosive popularity of glucagon-like peptide-1 agonists, better known as GLP-1 drugs, to treat obesity as well as diabetes has created shortages since 2022. This has led to rigorous compounding to deliver these medicines. (Compounding pharmacies are legally allowed to mix existing approved pharmaceutical compounds to meet critical drug shortages and other patient needs.) While the GLP-1 shortages were slowing down in 2025, Goren explains that compounding pharmacies have developed significant batch compounding businesses in recent years “…where they’re manufacturing medications in bulk. Are they selling directly to patients or distributing as a wholesaler? That opens a whole range of questions that need to be asked to determine whether coverage is adequate.”
Closing the Gaps and Spotting New Ones Ahead
If your business currently manages your product and property liability coverage with a single carrier, perhaps you’ve covered many of the issues discussed here. However, the changing technological, legal and professional staffing environment may call for a more customized approach in the future.
Goren and Rios suggest working with your insurer to answer these questions:
- Have we recently created products or services that could be outside the scope of any liability coverage we currently have?
- If so, what supplemental product or professional liability may be necessary?
- Are our healthcare professionals adequately insured for the work they’re performing now?
- Are we buying enough insurance to prepare for rising verdict amounts in the business areas we’re involved in or a legal environment where verdicts are delivering higher awards?
Learn more about the risks life science companies face and how healthcare professionals can help protect their careers.
1 “2025 Life Sciences Outlook,” Deloitte, December 10, 2024.
2 “EY Firepower Report: Life Sciences Dealmaking - Trends in 2025,” accessed February 24, 2025.
3 “2025 Outlook: Life Sciences Leaders on Data, Digital and AI,” ZS, November 21, 2024.
4 “Social Inflation: Litigation Costs Drive Claims Inflation,” Swiss Re Institute, September 7, 2024.
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