Covid-19 vaccine manufacturers rush to seek liability cover: Report

Insurance companies too have sought to cover their risks from GIC Re

As India embarks on what the government deems the largest Covid-19 vaccination drive in the world, Covid-19 vaccine manufacturers have themselves covered with product liability insurance policies, according to a report by Business Standard. When under the trial phase, these companies also took a clinical trial liability insurance to protect themselves from lawsuits and potential losses arising out of lawsuits, added the report.

Insurance companies also have sought reinsurance support for providing insurance cover to vaccine manufacturers for the Covid-19 vaccine from India's largest reinsurer General Insurance Corporation (GIC Re).

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“The reinsurance support, which has been sought by insurance companies, is for product liability. Hence, if the vaccine has some negative effects, the insurers will be liable to pay. Two companies — ICICI Lombard and New India Assurance – have sought reinsurance support and they have been given the support,” a source told the publication. The two insurance companies have received $5 million against risk from GIC Re.

These insurance companies have not completely transferred the risk to GIC Re and have retained a portion of the risk. GIC Re has taken on the risk fully on its balance sheet and has not sought support against this risk in the international market.

Earlier, vaccine manufacturers had sought indemnity from the Centre in case of an adverse event during the vaccination drive, however, the government is yet to decide on the matter. If the companies are indemnified, they would be absolved from legal consequences arising out of adverse clinical events in the vaccination drive.

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Clinical trial liability insurance taken from companies such as ICICI Lombard, New India Assurance and others will cease to be valid once the vaccine is approved by Drugs Controller General of India (DCGI) and is distributed. This policy covers physical injury, loss of data and property that occurs during the trial.

“The clinical trial policy ceases when the vaccine gets Drugs Controller General of India (DCGA) approval and once it goes into production. In the roll-out stage, a commercial general liability policy or product liability policy applies. These are two separate policies,” said a senior executive at a private-sector insurance company.