Life SciencesLiability
Get a quote

TL;DR

Field notes from the pharmaceutical sponsor MSAs we review in practice. The pattern is consistent: sponsor MSAs are now drafted to transfer risk almost entirely to the contract manufacturer, and most operator insurance programs cannot absorb what the MSA assigns. Six recurring gaps, below.

Field notes · 2026

MSA indemnity drift: what sponsor MSAs now demand.

These are observations from the sponsor MSA insurance and indemnity provisions we review in practice for life-sciences operators - contract development and manufacturing organizations (CDMOs), contract research organizations (CROs), medical device manufacturers, and 503B outsourcing facilities. They are qualitative patterns, not a counted study; where a figure is implied, treat it as "what we see," not a measured statistic.

The pattern is consistent: sponsor MSAs are no longer drafted to be balanced. They are drafted to transfer risk almost entirely to the contract manufacturer, and most operator programs cannot absorb what the MSA assigns.

The recurring gaps

  1. The norm

    One-way indemnity is the norm, not the exception

    In the sponsor MSAs we review, the contract manufacturer routinely indemnifies the sponsor for any claim arising out of the manufacturer's services, with no reciprocal obligation and frequently with no cap aligned to insurance limits. A single sponsor claim that exceeds insurance limits becomes a direct claim against company equity.

  2. Most

    Most MSAs require coverages or endorsements absent from the current COI

    The most common gap is additional insured for products and completed operations on a primary, non-contributory basis. Many certificates carry only ongoing-operations additional-insured wording, which does not satisfy a strict MSA read.

  3. Rarely met

    The 30-day notice of cancellation requirement is rarely satisfied as written

    The "endeavor to provide notice" disclaimer most carriers issue does not constitute the carrier obligation MSAs require. A sponsor enforcing this clause can effectively call a default on any active manufacturing campaign.

  4. Common

    Dedicated recall coverage is commonly missing

    Most generalist manufacturing packages carry recall as a sublimit on the products policy, capped at a level that does not respond to a real FDA Class I recall. Sponsor MSAs increasingly require recall as a dedicated first-party policy.

  5. Common

    Products towers are commonly under-sized against MSA mandates

    Sponsor MSAs in oncology, sterile injectable, biologics, and controlled-substance manufacturing increasingly require $10 million products and completed operations; many manufacturers carry $5 million as a holdover from a general manufacturing baseline.

  6. Growing

    A growing share of MSAs tie insurance compliance to change-control or audit gates

    Sponsor MSA language increasingly ties insurance compliance to change-control or audit triggers - a non-compliant COI does not just risk first-claim exposure, it risks campaign-stop or sponsor-walk under the contract terms.

Where this comes from

Practitioner observation, not a counted study.

These patterns are drawn from sponsor MSA insurance sections reviewed in the course of placing and rebuilding life-sciences insurance programs, and from the requirements operators run through the free MSA Decoder tool. They are reported qualitatively. We have not published counted percentages because we have not run a formal, sampled study - and we would rather state honestly what we see than attach precise figures we cannot stand behind.

If your MSA hit your inbox this morning

Run the MSA Decoder before you respond.

Open the MSA Decoder