Insurance Article, The Insurance Times 2021, The Insurance Times April 2021



Being a senior citizen, sitting in the hot seat of Corona attack, living being panicked since 24th March, 2020 till today, not yet having attacked by Covid -19, the author simply watched and wondered for the delay in India’s vaccination process.

Now we are little bit relaxed as two vaccines for coronavirus, Oxford Institute’s ‘Covishield’ (as being developed by the Pune-based Serum Institute), and Bharat Biotech’s ‘Covaxin’ – both received the emergency approval from the country’s drug regulator.

It may be noted – The Subject Expert Committee of Central Drugs Standard Control Organization (CDSCO) met on January 1 and 2, 2021 and made recommendations in respect of proposal for Restricted Emergency Approval of COVID-19 virus vaccine of M/s Serum Institute of India and M/s Bharat Biotech as well as Phase III clinical trial of M/s Cadila Healthcare Ltd.

The trial vaccination process finally began since 16th January, 2021 primarily having focus on the heath workers. Now we need to watch & see whether there is any side effect of the vaccine being on trial.

So the answer for the immense delay while searched by the author – the answer is received – due to Clinical Trail being carried on as a must needed requirement before launching the new vaccines for the use of human being.


  1. “We’ll never approve anything if there is slightest of safety concern. The vaccines are 110 per cent safe. Some side effects like mild fever, pain and allergy are common for every vaccine,” Drug Controller General of India said, and also added “Covishield was found to be 70.42 per cent effective and Bharat Biotech’s Covaxin is safe and provide a robust immune response”.
  2. Both vaccines have to be administered in two doses and stored at temperatures between 2 and 8 degrees Celsius. The government will give priority to 1 crore healthcare workers and 2 crore frontline workers as the vaccinations begin.
  3. Pune-based Serum Institute, the Drug Controller General said, conducted Phase 2 and Phase 3 trials on 1,600 participants in India. Recommendation was made for restricted use and the trials will continue, he added. The vaccine, developed by the Oxford University and pharma giant AstraZenca is already in use abroad.
  4. Bharat Biotech’s ‘Covaxin’ is conducting trials in collaboration with the Indian Council of Medical Research. The Drug Controller said that its Phase I and Phase II trials were conducted in around 800 people and the results showed that it is “safe and provides a robust immune response”. The Phase III trial in on and 22,500 of the 25,800 participants have been vaccinated.
  5. The health ministry said the government’s expert committee has reviewed Bharat Biotech’s data on “safety and immunogenicity” and gave permission for “restricted use in emergency situation in public interest”. The idea was to have “more options for vaccinations, especially in case of infection by mutant strains,” the ministry said, adding that the clinical trials will continue.
  6. It has been learnt that the vaccines of Bharat Biotech and the Serum Institute have received emergency approval. All preparations are underway for the Delhi government. First health workers and frontline workers will be given the vaccine, and then those above age 50 will be given the vaccine. Health workers and frontline workers will be vaccinated free of cost in the First phase.
  7. Flagging concerns over Bharat Biotech’s Covaxin, senior Congress leader Shashi Tharoor tweeted, “The Covaxin has not yet had Phase 3 trials. Approval was premature and could be dangerous. Its use should be avoided till full trials are over. India can start with the AstraZeneca vaccine in the meantime”.
  8. India has reported the total Coronavirus cases to over 1 Crores before the starting of this year and started the launching world’s biggest Corona vaccination programme first with “Covishield” on 16thJanuary, 2021 onwards. Still vaccination process is yet to start for the common people – why so delay, because of the completion of the required Protocol/ Phase–IV of Clinical Trials is far off, even now – at the backdrop of this dire need for vaccination for all of us.


All this has prompted me to learn a few things about Clinical Trial Process & Clinical Trial Liability Insurance that I share now with this august & distinguished brand of readers.


Clinical Trial Requirement:

It is obvious that-

  1. Commercial advantage to the firm that produces the first approved Vaccine/ Drug for a disease
  2. There is thus dramatic increase in the number of clinical trials world wide.
  3. Hence, the demand for risk management measures and clinical trial liability insurance has been amplified.
  4. The clinical trials have largely been sheltered from liability suits unlike other industries.
  5. The norms are changing now for the immense & urgent requirements for the vaccines.

Dire need of clinical trail:

  1. Commercial advantage to the firm that produces the first approved drug for a disease
  2. There is thus dramatic increase of clinical trials.
  3. Hence, the demand for risk management measures and clinical trial liability insurance.
  4. The clinical trials have largely been sheltered from liability suits unlike other industries.
  5. This is changing now.

Litigation against the Clinical Trials Industry:

  1. There has been significant increase in such litigation during the recent past.
  2. The most well known suit was filed against the University of Pennasylvania by the family of Jesse Gelsinger, an 18 year old man who died participating in 1999 in a gene therapy trial.
  3. These are not isolated incidents.
  4. In the days to come, we can expect such litigations in India also connected to the vaccination process against Covid-19 attack.


The Opportunity & Potential in India:

  1. India has become a favourable outsourcing destination for IT and host of other activities and the latest to join is clinical trial industry with the targeted populace of 30 Crores to be served for vaccination initially phase by phase.
  2. India has to alter its drug and cosmetics rule under pressure from WTO, multinational drug companies and clinical research organization.
  3. Foreign drug companies and others have started conducting trials in India for new vaccines at the same time that the trials of the same phase are being conducted elsewhere.
  4. This change is expected to fuel the growth of clinical trial industry in India.
  5. Testing new drugs in US and other Western countries is becoming difficult for various reasons

– Strict regulations.

– Elaborate safety norms

– Compensation requirements

– Prevailing judicial environment

– Small population

– Recruitment of research subjects – expensive and slow

– R & D activities of big global drug and pharmaceutical companies are thus getting affected

Hence, these are being outsourced to developing countries like India, Thailand, etc. as China is being now out of control.


Country Attractiveness Index for CONDUCTING Clinical Trials FOR VACCINES:

Here the five key areas are –

  1. Availability of patients / research subject
  2. Cost
  3. Relevant expertise
  4. Regulatory environment

India fulfills these requirements and hence is the most favourable destination for such clinical trials.


What is a Clinical Trial?

It is basically –

  1. Clinical trials are people based studies as opposed to animal or lab based for testing new vaccines / drugs and procedure.
  2. Medical research studies involving people
  3. To test the efficacy of a drug by testing it in human beings.
  4. To test the safety and effectiveness of new treatments/ procedures
  1. Clinical trials involves –
    1. Treatment trials (new drug or combination of drugs, new approaches or line of treatment)
    2. Prevention trials (Better ways of preventing disease or disease from returning)
  2. Clinical trials answers two important questions
    1. Is the new treatment safe?
    2. Is the new treatment effective?
  3. Such studies are vital to the development of new treatments for disease such as Cancer
  4. It helps the doctor to learn what is safe and effective in treating disease.
  5. Today, vaccines, drugs and medical devices must go through several phases of clinical trials before being approved for use.

A Clinical Trial may include –

  1. Treatment trials;
  2. Prevention trials;
  3. Diagnostic trials;
  4. Screening trails;
  5. Quality of life trials.

Phases of Clinical Trials:

A clinical trial is conducted in four phases. These studies are focused on human being – the first requirement here is to involve people as participant in the trials through application of newly invented vaccine/drug and simultaneously ensure the physical safety of those people engaged in the process against the administration of the vaccine/drug.

Each phase is designed to answer certain question, while trying to ensure the safety of the people taking part. The phases involved are –

Phase –I: In Phase I, it tests the safety of the product, determination of safe dosage and identification of side effects. In Phase I of Clinical Trials, researchers test a new drug or treatment in a small group of people (20-80) volunteers for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.

Phase–II: In Phase II of Clinical Trials, the experimental vaccine/drug or treatment is given to or a procedure is performed on a larger group of people (100 to 300) to further measure the effectiveness and to further evaluate its safety.

Phase–III: In Phase III studies, the study drug or treatment is given to large groups of people (1,000-3,000) to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow to check that trial demonstrate large scale efficacy of the product and is conducted on more & more individuals in many places across the country at the same time.

Phase–IV: After the vaccine/drug is approved, treatment or medical procedure is marketed; the testing continues to provide additional evidence of efficacy, effects on various populations, effect with long term   use, etc. the drug or treatment to be used safely. Phase IV studies continue testing the study drug or treatment to collect information about their effect in various populations and any side effects associated with long-term use.

Now the issue arises –

  1. Phase I – Is the treatment safe?
  2. Phase II – Does it work?
  3. Phase III – Is it effective or better than what is already available?
  4. Phase IV – What else do we need to know?


Exposure to Clinical Liability Suit:

From liability stand point there are four parties involved in clinical trials:

  1. The sponsor Company testing its new product / procedure
  2. The clinician that actually conduct the study on behalf of the sponsor
  3. Clinical Research Organization (CRO) that helps the sponsor manage the study
  4. The institution where the study is actually carried.


What is informed consent?

Informed consent is the process of learning the key facts about a clinical trial before the subject decides whether or not to participate in the trial. These facts include:

  1. Why the research is being done?
  2. What the researchers want to accomplish?
  3. What will be done during the trial and for how long?
  4. What risks are involved in the trial?
  5. What benefits can be expected from the trial?
  6. What other treatments are available?
  7. The fact that the subject has the right to leave the trial at any time.
  8. Each party involved in the clinical trial has legal and moral responsibility towards the human subject. The parties involved in clinical trial have real & significant exposure to liability because the trial involves testing humans. Generally, the target of litigation is clinical investigators and the research institution involved. Companies that sponsor the trial are also exposed to the risk of litigation – improper disclosure, conflict of interest, violation of good clinical practice. Compliance of regulatory standard and best practices are the essential requirements. In today’s litigation society, after all, parties will be sued, regardless of whom or what caused the injury or death.


How to limit exposure to liability suit?

It is possible ensuring & resorting to the following aspects –

  1. Parties to the clinical trial must sign clinical trial agreement to ensure the investigators’ commitments to conduct the trial in accordance with the protocol, relevant rules and regulation and to take care of other concerns.
  2. Company must establish and maintain a policy of adherence to the required clinical trials protocol.
  3. Company must do everything to minimize the risk of law suit.
  4. The company must not stray from safety norms.
  5. The company must ensure fulfillment of informed consent rules
  6. The sponsoring company obviously needs Clinical Trial Liability Insurance in addition to General Liability & Product Liability
  7. Clinician needs Professional Indemnity Insurance
  8. Clinical research organization needs Error & Omission Policies
  9. Financial Conflict of interest between the sponsor and investigator (Equity Stake / Propriety interest).


Terms Used in Clinical Trials:

  1. Clinical trial – Test carried out on human subjects to verify safety, efficacy of a therapeutic product.
  2. Trial subject – Patients or healthy person taking part in a clinical trial
  3. Clinical test protocol – detailed rules, formalities and procedures to be followed for a particular trial. This is required to be submitted to FDA (Food & Drug Administration) before any clinical trial is started in USA
  4. Informed consent document – This is required to be signed by every human subject in a clinical trial. It details all the known or reasonably foreseeable risk of the study and other relevant factors.
  5. Institutional Review Board (IRB) each clinical trial is also reviewed by IRB of the hospital, clinic where trial is conducted.
  6. External IRB’s also utilized to bring more transparency
  7. The Board reviews the protocol and consent document to ensure the participant’s rights are protected and such other considerations are taken care of.
  8. Ethics Committee – The clinical trial must pass through the ethics committee which examines it on various parameters, e.g. trial design, clinical protocol, etc.
  9. Placebo – A pill / medicine prescribed for psychological reasons but having no physiological effect.
  10. I. – Principle Investigator.


Clinical Trials Liability Insurance:

Now let us discuss about the Clinical Trials Liability Insurance for those organizations those who conduct the Clinical Trial Processes.


What does Clinical Trials cover?

Basically Clinical Trials Liability Insurance is simply a kind of legal liability insurance covering –

  1. Liabilities may arise from death / injury (This is called Personal Damage) to the subject arising out of allegation of –
    1. Lack of care
    2. Insufficient / improper disclosures
    3. Conflict of interest
  2. Claimants may include:
    • Research subject (volunteers)
    • Dependents of research subject in case of death
    • Guardians of child subjects
  3. The policy generally covers legal expenses also.
  4. Some policies also provide coverage for material damage suffered by trial subjects in relation to the clinical trial
  5. Insurance coverage exists for damages suffered from breaches of data protection in relation to the insured clinical trial.
  6. The territorial limit for the policy is India but can be extended beyond India on request.
  7. The territory is specified in the policy
  8. Coverage may be extended for post trial liabilities (for 60 months)
  9. These Policies are issued on claims made basis.
  10. Policy may be issued as –
    1. Single trial policy, &
    2. Multi trial policy – one policy covers several trials of the policyholders.


Compensation payable:

The compensation for death or injury caused to the subject due to clinical trial would be as follows:

  1. In case of injuries occurring in a trial subject, he/she shall be provided will free medical management as long as required to recover from the injury
  2. In case the injury occurring to trial subjects is due to the clinical trial, subjects shall be also entitled to financial compensation, which will be over and above any expenses incurred due to medical management of the subject
  3. In case of death occurring in the trial subjects, their nominees would be entitled to financial compensation, which will be over and above any expenses incurred due to the medical management of the subject.
  4. All expenses of medical management and financial compensation, in case of trial-related injury or death, shall be borne by the sponsor of the clinical trial.

CRITICAL Issues in Clinical Trial Insurance:

There are several issues relating to clinical trial insurance that need to be addressed as below:

  1. Cover for failure of investigational product to provide therapeutic effect. The insurance policy being offered specifically excludes cover for “non-efficacy of the product”.
  2. The revised notification increases the liability substantially, both in terms of compensation payable and the medical expenses which need to be incurred till the lifetime of the individual. While insurance companies are not averse to granting cover as per the revised compensation structure, they are reluctant to extend cover as proposed for the medical expenses.
  3. There is reluctance of Indian & even for the overseas insurance companies to offer “worldwide jurisdiction” cover.
  4. Obviously various cumbersome procedures are involved in offering multi-trial policy.
  5. Stem cell therapy aspects are always required to be covered by a separate policy.
  6. Absence of standard structured premium rates and standardized excess/deductibles that are applicable for this policy.


The following extensions are allowed (subject to the terms/exceptions and conditions contained in the policy) –

  • Indemnity to Principal: As far as is necessary to meet the requirements of any contract or agreement entered into by the insured with any principal the insurance company will at the request of the insured treat the principal as though they were also the insured but only in respect of liability(as provided under the policy) arising out of the performance of such contract by the insured in connection with the business provided that the principal shall observe fulfill and be subject to the terms of the policy in so far as they apply.
  • Cross Liabilities: Where there is more than one insured is involved in the policy then this policy shall apply to each insured as though a separate policy has been issued to each provided always that the total liability of the insurer shall not exceed the limits of indemnity.

3) Discovery: In the event of the insurer:

  1. a) Canceling or refusing to renew this section for any reason other than –
    1. non-payment of premium;
    2. any act of fraud or dishonesty;
  • non-disclosure of material fact;

or, b) agreeing to the renewal or replacement of this section but requiring to impose exceptions or conditions that are not contained herein;

or, c) increasing the premium by 300%or more;

The insurer will provide an indemnity to the insured subject to the terms , conditions and limitations of the policy in respect of any claim which is first made in writing against the insured and notified to the insurer during a period of twelve months immediately following the final period of insurance as if the claim had been made against the insured and notified to the insurer during the final period of insurance except where otherwise stated in proviso(v) below.

Provided always that:-

  1. The indemnity will not apply where indemnity is provided by any other insurance or by virtue of extension (4) below.
  2. The total amount payable for all claims made during the final period of insurance and claims deemed to have been so made by virtue of the terms of this extension shall not exceed the limit of indemnity for the final period of insurance.
  • In the event of (b) above the indemnity afforded by this extension shall apply only in respect of the exception(s) and/or condition(s) imposed.
  1. Such claims results from bodily injury or property damage happening on or before the retroactive date and prior to the end of the final period of insurance.
  2. Any such claim in connection with occurrence which has given rise to any other claim first made and notified during any period of insurance may be deemed to have been made and notified on the date the first of those claim was made. Basically the indemnity afforded by this extension (subject to the proviso thereof) will also apply in the event of the cancellation or non-renewal of this section by the insured other than in circumstances connected with (a), (b) or (c) above. Provided always that in the event of such cancellation or non-renewal the period of twelve months specified above shall be reduced to a period of six months immediately following the final period of insurance.
    • Notification of event of circumstance: If during any period of insurance the insured shall give written notice to the insurer in accordance with condition that in the event of an accident including continuous or repeated injurious exposure to substantially the same general conditions which results in bodily injury or property damage or other contingencies neither expected nor intended from the stand point of the insured, the insurer may accept the liability of the claim or claims which may subsequently be made against the insured arising out of that event or circumstance regardless of when such claim may actually be made.



Exclusions are basically meant to exclude from the scope of cover all eventualities that cannot be attributed to and resulting from the participation in the clinical trial including:

  1. Damages that do not exceed certain degree of adverse reaction that is to be expected from the trial drug.
  2. Deterioration of the existing state of health which would have occurred without participant in the clinical trial.
  3. Deliberate contravention by the trial subject of the express instructions of the investigators
  4. War, radiation, etc. and such other standard exclusions
  5. Fines, penalties, etc.

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