Does a biotech need cyber insurance?

Yes. Clinical-stage biotechs handle three categories of regulated and high-value data that cyber liability responds to: PHI under HIPAA (through investigative sites, even when data is de-identified at the sponsor level), sponsor-confidential clinical and regulatory data (under CDA with vendors and partners), and patent-defining trade secrets (composition of matter, manufacturing process, formulation IP).

Cyber liability sizing for biotech is driven by the largest dataset under management, not by company headcount or revenue. A 50-employee clinical-stage company managing data from a 2,000-subject Phase 3 trial faces breach exposure proportional to the 2,000 subjects, not to the 50 employees. Typical placements range from $5 million for early-stage to $25 million for late-stage public companies, with higher limits for cell and gene therapy programs handling genomic data.

The coverage components that matter are breach response and notification, regulatory defense (HHS OCR investigations under HIPAA), business interruption from system compromise, and contingent cyber for vendor failures (the CRO, the eTMF host, the EDC vendor). Most generalist cyber policies do not adequately respond to HIPAA-regulated PHI exposure; the placement requires a carrier with healthcare cyber appetite.