Insurance For Medical Drug Companies

Product Liability Insurance for New Mexico Medical Drug Companies

Product liability insurance is a form of commercial insurance that covers the policyholder against claims arising from injuries or damages caused by their products. This insurance helps protect companies from the financial consequences of legal actions, settlements, and court judgments.

Why Do New Mexico Pharmaceutical Companies Need Product Liability Insurance?

Medical drug companies in New Mexico are subject to strict regulations and rigorous testing standards. Despite these precautions, there is always the risk of product defects, side effects, and other issues that could lead to patient harm. In such cases, companies may face costly lawsuits and reputational damage.

Product liability insurance can help cover:

• Legal defense costs: This includes the cost of attorneys, court expenses, and any legal fees associated with defending your company against a product liability claim.
• Settlements or judgments: For cases that are settled out of court, or if a judgment is awarded against your company, product liability insurance can help cover the costs.
• Reputational damage: Product liability claims can lead to public scrutiny and tarnished reputations. This type of coverage can help protect you from potential losses caused by reputation damage.

When selecting product liability insurance for your New Mexico medical drug company, consider a policy with adequate coverage limits to protect against potential financial losses. This will depend on the size of your company, the types of products you manufacture, and your risk tolerance. Be sure to carefully review any policy exclusions to ensure you have adequate coverage for the specific risks associated with your business.

Additionally, you should consider whether your pharmaceutical product liability policy includes subcontractors. If you hire third parties for services related to product development or manufacturing, make sure they are properly included in the policy or have their own relevant coverage. Finally, consider whether your policy covers clinical trials and FDA approval, as well as international sales.

Claims-Made vs. Occurrence-Based Product Liability Insurance 

Pharmaceutical product liability insurance is typically written on a "claims-made" or an "occurrence-based" basis. A claims-made policy covers claims made during the policy period, regardless of when the incident occurred. An occurrence-based policy covers incidents that occur during the policy period, regardless of when they are reported.



Claims-made policies may require additional coverage options, such as a retroactive date or tail coverage to protect against claims arising from incidents that occurred prior to the policy period.