Firms rush for vaccine liability cover as India kicks off vaccination drive

Insurers, too, have sought support for such coverage from India's largest reinsurer GIC Re. ICICI Lombard & New India Assurance have got support of $5 mn against risks

Covid-19 vaccine manufacturers in India have got themselves covered with product liability policies as the immunisation drive has started.

 

They had also taken clinical trial liability insurance during the trial phase to protect themselves.

 

Insurance companies, on the other hand, have sought reinsurance support for such coverage from India’s largest reinsurer General Insurance Corporation (GIC Re).

 

“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 aware of the development said.

 

Both the companies have sought reinsurance support of $5 million against the risk from GIC Re and that has been accepted.

 

This comes at a time when the vaccine makers have asked the central government to indemnify them in case of any adverse event during the inoculation drive. However, reports have suggested that the government has not decided on the matter. If the government decides to indemnify the vaccine makers, it would absolve them from any legal consequence arising out of any adverse event. And, the government will be liable to pay compensation.

 

The insurers have not transferred the risk entirely to GIC Re and they have retained some part of it. GIC Re, on the other hand, has taken the risk fully on its balance sheet. It has not gone for any support against this risk in the international market.

 

Vaccine makers had also taken a clinical trial liability insurance from companies such as New India Assurance, ICICI Lombard, and a few others. This policy is valid only in the trial phase and once the vaccines are approved and they go into distribution, the policy support ceases. This insurance plan offers protection against legal liabilities that result from clinical trials. A clinical trial insurance covers physical injury and loss of data or property that occurs during the trial. Pharmaceutical companies take this policy to test new drugs. 

 

“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 from a private sector insurer. 

 

“For transport of vaccines, the transit policy provides coverage to the pharma companies or local traders,” the executive said.