Insurance firms Marsh and Munich Re have introduced new non-damage business interruption insurance (NDBI) product for life sciences firms.


The new NDBI Pharma IQ aggregates risk transfer and consulting services, which will help life sciences firms to manage the impact of regulatory actions imposed by the US Food and Drug Administration (FDA).

Marsh US life sciences practice leader Doug Carey said: "A regulatory action that ultimately leads to an enforced suspension of manufacturing and distribution can cost a life sciences company millions of dollars in remediation, reputational damage, and lost income."

The FDA, along with its counterparts, is closely scrutinizing life sciences firms through planned and unplanned inspections to follow current good manufacturing processes (cGMP).

According to Marsh, the resulting costs are not generally covered by traditional business interruption insurance policies, when these inspections result in a suspension of manufacturing, whether voluntary or enforced.

Both firms developed new NDBI product to fill this void. It provides life science firms with up to $10m in aggregate non-damage business interruption and extra expense coverage for up to 10 manufacturing locations, including those owned by third parties, which suspend their manufacturing and distribution due to a cGMP violation.

NDBI Pharma IQ will be provided with complimentary risk assessment and quantification services, supported by Marsh Risk Consulting’s forensic accounting, business continuity, and property risk experts.

Munich Re special enterprise risks head Claudia Hasse said: "NDBI Pharma IQ was created to address an uninsured need – the impact of financial losses resulting from suspension of production following regulatory enforcement."

Marsh, a wholly owned subsidiary of Marsh & McLennan Companies, provides insurance broking and risk management services. Munich Re operates in all lines of insurance, with around 43,000 employees across the globe.

Image: The new NDBI Pharma IQ prduct has been designed for life sciences firms. Photo: courtesy of Stuart Miles/