What products liability limit does a CDMO need?

The required products and completed operations limit for a CDMO is set by the toughest sponsor MSA on file. Most pharmaceutical MSAs require $5 million products as a floor. Oncology, sterile injectable, biologic, and controlled-substance manufacturing routinely require $10 million, occasionally $20 million for high-potency or complex generic products.

The structural decision is not just the limit but the tower architecture. A single $5 million primary policy aggregates across every sponsor on file - one sponsor claim can exhaust the limit at the expense of every other sponsor relationship. Per-project or per-location aggregate endorsements solve this. A $5 million primary plus $5 million excess often satisfies a $10 million MSA requirement at lower premium than a single $10 million policy.

Beyond the limit, the policy form matters more than buyers realize. Sponsor MSAs almost universally require occurrence-form CGL (not claims-made), with additional insured for products and completed operations on a primary, non-contributory basis, waiver of subrogation, and 30-day notice of cancellation. A products tower at the right limit but on the wrong form is non-compliant on first read.