What Is Medical Device Manufacturer Liability Insurance?
Medical device manufacturer liability insurance provides coverage against civil liability for bodily injury and property damage caused by product use. In the event of an incident, it covers claims from patients, healthcare institutions, and regulatory bodies. This policy is a key element of operational risk management. Proof of financial coverage should be included in the QMS documentation and fall under the responsibility of the Person Responsible for Regulatory Compliance (PRRC).
Insurance Obligations Under MDR and IVDR
According to Article 10(16) of the MDR and Article 10(15) of the IVDR, every manufacturer must ensure sufficient financial coverage, proportionate to the risk, device class, and scale of operations. This also applies to custom-made devices. Although the regulations don’t explicitly require liability insurance, having such a policy is a practical method of fulfilling this obligation. MDCG 2022-16 highlights adequate insurance as a factor in a notified body’s trust in the manufacturer’s ability to manage liability.
Scope of Coverage in Manufacturer Liability Policies
Insurance coverage should include:
- damages caused by defective or poorly designed products,
- costs related to legal proceedings, settlements, and compensation,
- claims from foreseeable but improper use of the product.
It is advisable to include clauses for active devices, implantables, Class D IVDs, and exports to high-risk jurisdictions (e.g., USA, Canada, Asia).
Types of Insurance for Medical Device Manufacturers
Common insurance policies for manufacturers include:
- Product liability insurance – covers damages caused after the product is marketed,
- Operational liability insurance – covers production, packaging, and transport risks,
- Legal protection insurance – covers legal costs in disputes,
- Additional clauses – e.g., for export outside the EU, high-risk products, or implants.
Manufacturers outside the EU must also register as economic operators in EUDAMED, with financial documentation supporting the registration.
The Role of Insurance During MDR Audits
During conformity assessments, notified bodies may request proof of a valid liability insurance policy. Insurance documentation, as part of financial coverage, should be integrated with the technical documentation. For collaborations with foreign notified bodies, an English version of the document is recommended. Auditors may also verify if the policy limit corresponds to the declared product risk and ISO 14971 documentation.
Supply Chain Liability and Insurance Obligations
Under Article 11 of the MDR, the authorized representative of a non-EU manufacturer shares joint liability. Distributors and importers are not required to hold liability insurance but may be held liable for improper storage, transport, or failure to act on an incident. Increasingly, policies include coverage for EU representatives and subrogation clauses among supply chain entities.
Consequences of Inadequate Financial Coverage
Lack of liability insurance can result in:
- refusal or suspension of MDR/IVDR certification,
- full civil liability for the manufacturer, payable from company assets,
- loss of trust from notified bodies and business partners,
- violation of Article 10 MDR/IVDR, potentially leading to regulatory sanctions or product withdrawal.
In the event of an incident, lack of insurance may prevent effective FSCA implementation and lead to mandatory product destruction at the manufacturer’s expense.
How to Select the Right Insurance Policy
Insurance selection should be based on device class, intended use, sales scale, and target markets. Considerations include:
- history of complaints and incident reports,
- whether the device is active, implantable, or intended for high-risk populations,
- territorial scope – EU, USA, UK, Asia,
- alignment of contract terms with MDR/IVDR obligations.
This analysis should be documented in the quality system as part of management reviews and financial supplier evaluations.
How Pure Clinical Supports Manufacturers with Financial Coverage
Pure Clinical supports medical device and IVD manufacturers in assessing and documenting arrangements for covering potential liability, taking into account Article 10 of the MDR and IVDR and applicable national legislation.
Services may include:
- Assessment of financial coverage needs based on device type, risk class, intended purpose, and the manufacturer’s business profile,
- Review of available insurance options and product liability insurance documentation in the context of the manufacturer’s potential liability,
- Risk analysis with reference to ISO 14971 and consideration of relevant findings in the technical documentation, where applicable,
- Support with preparing documentation describing the arrangements adopted for internal reviews and audits,
- Training for Regulatory Affairs (RA) and Quality Assurance (QA) teams on regulatory requirements related to financial coverage,
- Review of documentation against applicable legal requirements, guidance, and Notified Body expectations, depending on the scope of the assessment.
The scope of support depends on the manufacturer’s profile, device type, applicable national legislation, and the financial coverage arrangements adopted.
FAQ
What makes an insurance policy “sufficient” from the perspective of a Notified Body?
Does a US-based manufacturer need a liability policy that covers the EU?
How often should a manufacturer review or renew their liability policy to stay compliant?
What is medical device manufacturer liability insurance?
Do MDR and IVDR legally require liability insurance?
What should a manufacturer liability insurance policy cover?
What types of insurance do medical device manufacturers typically need?
Are distributors and importers required to carry liability insurance under MDR?
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