Biotech FAQ
Biotech Insurance Questions, Answered
Each entry below is a buyer-side question biotech operators ask, with a 200-word plain-English answer and links to the relevant practice page, glossary clause, or longer Q&A entry.
When does a biotech company need D&O insurance?
Biotech operators need D&O insurance from the first outside-investor financing onward. Investors typically require D&O as a closing condition; the floor program is $2M-$5M with explicit Side A coverage.
What is clinical trial liability insurance and which biotechs need it?
Clinical trial liability insurance covers bodily injury and death claims from human study subjects. Required by FDA, IRBs, and CTAs. Mid-market biotech with active Phase 1-3 studies typically need $5M-$10M per trial.
How much does biotech startup insurance cost?
Pre-IND biotech startups typically pay $15K-$45K annually for a full specialty insurance program. The exact figure depends on funding stage, headcount, active trials, and IP/platform exposure.
What insurance does a biotech IPO require?
A biotech IPO requires primary D&O at $10M-$25M, transactional D&O placement for the offering itself ($25M-$50M), cyber sized to IPO-readiness underwriter expectations, plus standard E&O, EPL, fiduciary, and clinical trial liability.
Does a biotech company need cyber insurance?
Yes - biotech operators need cyber insurance to protect IND data, clinical PHI, drug master files, and platform IP. Pre-IND $1M-$3M tower; IPO-readiness $5M-$15M; commercial $15M-$50M plus.
How does biotech insurance differ across pre-IND, clinical-stage, and commercial-stage?
Biotech insurance evolves through stages: pre-IND focuses on D&O and IP/E&O; clinical-stage adds clinical trial liability; IPO-readiness expands D&O materially; commercial adds products liability towers.
When does a biotech need clinical trial liability insurance?
A biotech sponsor needs clinical trial liability (CTL) before IND filing. CTL responds to subject injury claims and is required by virtually every clinical trial agreement with an investigative site.
What is Side A D&O coverage and when do biotechs need it?
Side A D&O is dedicated coverage for individual directors and officers when the company cannot indemnify them. Public biotech, IPO-stage, and SPAC-track companies routinely require dedicated Side A.
How much does biotech IPO D&O insurance cost?
Biotech IPO D&O typically costs $300K to $1.5M for the first $10M-$25M of coverage in the 12 months pre-IPO, scaling with market cap, deal size, and recent litigation experience in comparable companies.
Does a biotech need cyber insurance?
Yes - clinical-stage biotechs handle PHI under HIPAA, sponsor-confidential data, and patent-defining trade secrets. Cyber liability sizing is driven by the largest dataset under management, not the company size.
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