Insurance Provisions in Clinical Research Contracts: How to Set Your Policy Limits

This article is for educational purposes only and does not constitute legal advice, because it does not analyze your specific organizational risks or other unique requirements. Your attorney will provide legal advice. For best results, obtain additional input from your risk manager and insurance broker. 

It will likely come as no surprise to you if we open with this statement: insurance terms and provisions for research contracts are complicated. While a previous post established a basic definition of common clinical trial insurance terms and policy types, this article will identify a few helpful tips to determine the appropriate policy limits for your organization by exploring how your institution might assess risk for each study. Let’s get started!

Assessing Risk and Liability

You must first assess the risk involved in the study and the liability you are being asked to assume under the contract.

You can assess risks by determining:

·        The party agreeing to pay for claims

·        Whether the study is testing a drug, device, or is simply a data collection study

·        The phase of the study—Phase I studies are inherently riskier than post-market studies

A best practice is to create “buckets” of risk levels and set insurance level requirements for each. For example, you may decide that Phase II studies must always be insured with limits of $5 million per-occurrence and $10 million annual aggregate, but only $2 million per-occurrence and $4 million aggregate for post-market studies. If you check the protocol, identify which risk bucket it falls into, you only have to plug those numbers into the contract rather than reinventing the wheel.

It’s also important to know your own insurance limits and identify your level of risk aversity, which can be unique for each business depending on size, number of studies being conducted, location, patient population, or study type. Consult your risk management and legal teams to identify how much risk you are able to absorb. 

When negotiating on behalf of a client, we typically request that sponsors have clinical trials liability and general commercial liability insurance policies for any device or drug studies. These policies should be broad form and cover contractual liabilities as well, although the sponsor (not the research organization) is responsible for any out-of-pocket coverage should they fail to include these coverage terms in their policy.

Negotiation Tactics

Sponsors are often willing to accept a site’s insurance terms—if they make the terms mutual.  A small, research-only site likely does not have the buying power for a policy with the high dollar limits of a large pharmaceutical company.  So, to approach these negotiations, look at the assumed risk. Evaluate who—between the sponsor, the drug manufacturer, or the entity that stands to commercially benefit from the research—will assume indemnification and subject injury obligations under the contract.

If the manufacturer of the drug is the entity that stands to commercially benefit from the research, don’t agree to let the sponsor come down in insurance limits to match the limits of the research organization.  In this case, it’s fair to request that the sponsor impose limits that match the risk it’s assuming and benefit it stands to gain.

When it comes to making sure a liability policy will cover all entities the contract assumes liability for, the term “agents” can create a gray area in contracting, based on the interpretation of the term. If an agent isn’t specifically an officer or employee of the party, there’s a chance the insurance coverage won’t include them in a claim.  If a party is agreeing to indemnify another party’s agents, they want to know exactly which agents those are so that they can have them endorsed onto the policy as an “additional insured.”

Sponsors that require “approved” agents aren’t necessarily trying to police who a site uses. They want to make sure they are covered under the insurance policy for the trial – the best way to do that is by adding each individual to the policy so there is no gray area. Some sponsors don’t have room for a gray area due to their size or financial power.


Risks Depend of Sponsor Size

Risks change depending on size of sponsor. With a large sponsor, trials are ongoing and they may have more funds available to cover more comprehensive coverage premiums. Also, a large sponsor is likely to have a large asset pool if coverage is insufficient and their established business practices or products indicate longevity. If your study sponsor is small, there is a higher likelihood that this might be their first or only trial. Coverage may be limited to the premium your sponsor can afford, and the smaller size and likely young age means that few to no assets exist in the event that coverage would show to be insufficient. Unsuccessful trials or claims can extend past coverage limits, and liability could become a general ledger expense, leading the sponsor to fold.

Adding language asking to be a named insured-- and ensuring they have good termination rights—should leave your organization in a good position. To some extent, working with small sponsors is a risk regardless of the language here—if they fold, there isn’t an entity to hold responsible. If this happens, at least you know you will not have to assume their liability, and you won’t have to continue a study if payments aren’t being made. 

Do your research! Look up the sponsor’s business information to properly assess the risk.


Duration of coverage –

What claims can arise after a study ends?

The duration of coverage depends on the type of study being run. There are several reasons you might want to consider coverage post-study, such as injuries or side-effects from experimental treatments that take a while to manifest, data breaches that affect stored patient records, or other claims that might take a while to materialize such as the misuse of results well after a study is terminated.

Another factor that will affect whether your trial coverage should run post-study is if your policy is claims-made or occurrence based. Duration and post-study obligations aren’t as important for sites who either don’t have study-specific coverage or have coverage that applies to any future studies.  As long as site remains in business of conducting research, this coverage will be in place anyway; however, if a sponsor has study-specific coverage and claims may not arise until far after study closes, making post-study coverage important.



When carrying out clinical trials, mitigation of the risks to your organization must be carefully considered. Study type, phase and sponsor size should all factor into your assessment of the level of risk your research organization must cover in each individual trial, and a thorough understanding of the insurance provisions of your research contracts can help you better protect your institution and your patients. 

Five Questions Every Research Organization Should Ask Before Adopting a Centralized Clinical Trials Office

By David Russell, CRCP—Director of Site Strategy, PFS Clinical

In my years working in the industry, I’ve learned firsthand that no two research organizations are alike. For that reason, it’s impossible to find a one-size-fits-all model for a centralized clinical trials office (CTO). I’ve had the opportunity to support many organizations as they’ve moved toward a centralized CTO, and it’s always clear that the success of the venture requires that you take the time to evaluate strengths and opportunities for growth before you create a plan. Over time, I’ve developed a few key questions that can help research institutions identify existing skills and any initial hurdles that might inform and impact CTO creation. If your organization is looking to establish a centralized CTO, finding answers to the following questions can help create a blueprint for a plan that will enhance your individual processes.  

Here are five key questions every research organization should answer when considering moving toward a centralized CTO model:

Insurance Provisions in Clinical Research Contracts: Know the Terms 

Confused about insurance provisions for research contracts? We don’t blame you—insurance terms are complicated, even without the added complexity of figuring out how they apply to your research program. If you’ve found yourself swimming upstream through contracts full of insurance provisions you’re unsure of, let us help you out! In this article, you’ll find definitions of several common terms and policies, complete with discussions of how they interact with the services delivered by your organization during a clinical trial.

Latitude Updates: How Our New Project Tracking Software is Helping Clinical Research Programs Grow

Easy? Check. Transparent? Check. Real-time? Check.

That’s what clients should experience when placing service requests with us. Ideally, requesting services should be as easy as ordering a pizza, with nearly the level of transparency of one of those smartphone pizza delivery apps. While our services don’t translate directly to dinner delivery, offering a deliverable services tracking software that allows real-time, transparent communication between our research administration team and our client organizations felt important to us. This post will give you a bit of background information and update you on the progress of Latitude, our newly developed self-service client portal for ordering PFS Clinical’s services, tracking delivery, and benchmarking performance.

Don’t Leave Money on the Table: Ten Tips for Budgeting, Negotiating, and Collecting Clinical Trial Payments

While it may seem obvious that budget creation, negotiation, and payment collection are interconnected, institutions can be met with payment delays and unrecognized revenue if their strategies for these steps do not capture the points of connection from the start. Here are 10 tips that will help you build a holistic strategy for budgeting, negotiating, and collecting clinical trial payments.

Lessons Learned at the 2018 ExL Clinical Trial Billing and Research Compliance Conference

Blog Contributor Amanda Miller, Training Manager, Clinical Research Administration, PFS Clinical

Spending a few days of February in Orlando was a welcome experience for the Wisconsinites of PFS Clinical. Even so, the knowledge my colleagues and I gained through the conversations and panels we enjoyed at the ExL Clinical Trial Billing and Research Compliance Conference were more valuable than the fortunate change in weather conditions. It was an eventful conference, which resulted in a lot of important takeaways that have kept us thinking. For those of you unable to attend—and for attendees who, like me, are still mulling over what you learned-- here are some of the biggest clinical research billing and compliance lessons we learned from this event.

How to Avoid Common Gaps in Clinical Trial Revenue

While conducting clinical trials, staying on top of billing and expense coverage can feel never-ending, particularly if things do not easily reconcile. Luckily, from pre-study negotiations to post-study internal review, you can adopt practices at every step that will help ensure your site is not missing opportunities for reimbursement of research costs. This blog post explores some fairly simple practices your institution can use to avoid common gaps in financial management and ensure you won’t see a loss in revenue in clinical studies.

Is Your Clinical Research Revenue Cycle Too Slow?

Creating an efficient process for billing and identification of study-related procedures is a process in itself. Additionally, at large institutions where research is a small percentage of revenue, optimizing cash flow and compliance of the research revenue cycle may not be as big of a priority as it is for small institutions. Still, the absolute money value and risk in play can be substantial no matter your size. This blog details how partnerships between study teams and billing specialists can build accuracy and efficiency into your encounter identification and billing processes, mitigating risk and enhancing your revenue cycle.

Understanding the Differences Between Medicare’s “No Legal Obligation to Pay” Rule and the Secondary Payer Rule

The Medicare Secondary Payer rule (“MSP”) amended the Social Security Act (Section 1862(b)) to define circumstances when Medicare has an obligation to pay only after a primary payer has paid, or can reasonably be expected to pay for a billable item or service. The intention was to shift costs from government-payer coverage to private, third-party insurance, if an individual has dual coverage. MSP outlines how these dual benefits are coordinated, but how is this applied in the context of clinical research?

Five Tips for Improving Your Study Start-Up Timelines

While speed and efficiency are vital aspects of any study start-up, approaching the process with only these goals in mind can create issues that can set you back and impact the overall success of your studies. Fortunately, evaluating some of the details underlying your start-up timelines can remove the potential for certain missteps. With these things in mind, here are five tips for improving your study start-up timelines:

The Pros and Cons of Different PI Compensation Models

A frequent question asked in our industry is: "How much should we pay investigators for their work on a clinical trial, and what methodology should be used?"  While this question seems straightforward, it is quite complex. The amount and method by which you pay investigators can play a big role in the success, or lack thereof, of your research department. 

Medicare: What is it and How Does it Apply to Clinical Trials?

For the average person, understanding Medicare can be confusing and complicated. However, for people in the world of clinical research administration, understanding Medicare is a necessity in order to maintain billing compliance. Medicare rules are the foundation for clinical trial billing compliance, so understanding how Medicare can impact your research is crucial. To understand how Medicare impacts clinical trials, you must first understand what Medicare is, how it is broken up, and what makes a clinical trial qualified to receive Medicare coverage.

How can mobile health technologies benefit clinical trials?

The use of mobile health in clinical trials has been consistently growing for the last few years, and for good reason.mHealth has been gaining popularity in clinical trials because of its ability to gather general health data, as well as monitor real-time patient vital signs. mHealth technologies can benefit clinical trials in many ways by enhancing data collection, improving patient enrollment and engagement, and the lowering the cost of trials.

Effectively Managing Clinical Trial Receivables

Clinical trial agreements are notorious for their complex and often confusing payment terms. Those terms make it difficult for research institutions to accurately track how much is owed to them by sponsors/CROs and if they have been paid correctly for a study. Effectively managing your receivables can change the way your institution does business, and it has many benefits.

NCI Accreditation 101

The National Cancer Institute (NCI) Cancer Centers Program, which is responsible accrediting high performance cancer centers, is a leading voice in the nation’s cancer research effort. There are currently sixty-nine NCI-Designated Cancer Centers that form the nexus of the NCI’s initiatives for studying and combatting cancer.  While there are many cancer centers in existence, becoming NCI-accredited is one of the most rigorous and prestigious designations in the country.

Budgeting for Clinical Trials 101

Developing an internal budget can be a complex process, but it’s important for many reasons. First, the internal budget allows the research office to see the actual cost to conduct a study. Additionally, the internal budget is often more detailed than the budget provided by the sponsor. Your internal budget might vary from other institutions due to specific processes, and it can be built in an excel document or directly into a CTMS. Developing an internal budget allows for additional comments and clarifications that may not be possible to add to the sponsor’s template. Lastly, an internal budget can be formatted to meet any specific internal needs. A good example of this might be including specific formulas to account for how much money should be allocated to the PI, the nurse or coordinator, or to cover various departmental fees.

Subject Injury Language: What You Need to Know

One of the negative aspects of clinical trials is the possibility that a patient will suffer an injury or illness as a result of their study participation. As such, one of the most important pieces of a contract is the subject injury language. ‘Subject Injury’ is defined as an injury, illness, adverse event/reaction, or death caused by a study subject’s involvement in a clinical research study. Prior to the study, the research site and the study sponsor should come to an agreement on what exactly constitutes a Subject Injury, and who pays in the event of a Subject Injury.

Four Common Oversights of Investigator Initiated Trials

Within the past two years, investigator initiated trials (IITs) have seen a remarkable renewed interest. While research offices are doing their best to support these endeavors, the additional administrative responsibilities involved are often unfamiliar to research offices. Consequently, mistakes made during the initial development and start-up stages can cause compliance and financial ramifications. Here are four common mistakes to look out for when conducting an IIT study: