How do I evaluate the insurance section of a sponsor MSA before signing?

Isolate the insurance section of the MSA (usually a discrete numbered section or attached as an exhibit). List every required coverage line and its required limit. Typical lines for a CDMO: CGL, Products and Completed Operations, Workers Compensation, Employers Liability, Commercial Auto, Umbrella/Excess, sometimes Professional Liability/E&O, sometimes Cargo, sometimes Cyber.

For each line, compare the MSA-required limit to your current program limit. Note any gaps. Pay special attention to aggregate vs per-occurrence wording — some MSAs require both "per occurrence" AND "per aggregate" at the same number, which means a single carrier exhaustion can leave you non-compliant for the rest of the policy period.

Read the endorsements section carefully. Confirm requirements for: additional insured for ongoing operations, additional insured for products and completed operations, primary and non-contributory wording, waiver of subrogation, severability of interests or cross-liability, notice of cancellation provisions.

For each requirement, verify your current policy provides the wording either by blanket endorsement or by per-sponsor endorsement. The most common gap: AI for products/completed operations on a CGL that only provides blanket AI for ongoing operations.

Search the insurance section for the words "occurrence" and "claims-made." Most sponsor MSAs require occurrence form for CGL and products specifically and accept claims-made for professional liability, D&O, EPLI, and cyber.

If the MSA requires occurrence form on a line your program writes on claims-made, flag it for negotiation. Occasionally sponsors will accept claims-made with a sufficiently old retroactive date and proof of tail coverage purchase obligation, but this is a back-and-forth.

Check the carrier rating requirement (almost always A.M. Best A- VII or better, occasionally A VIII). Verify every carrier on your program meets the requirement. If you have older policies written by carriers that have since been downgraded, surface this before binding the MSA.

Read the survival provision — how long after the MSA terminates must coverage be maintained? Innovator MSAs typically require 10-year survival; generic MSAs often 3-5 years. Survival applies to tail coverage on claims-made lines and to maintaining policies on occurrence lines for the survival period.

Read the indemnity section in conjunction with the insurance section. The indemnity is what determines your actual financial exposure if a claim arises; insurance is how you fund the indemnity obligation. Misaligned indemnity-and-insurance is a real risk — for example, uncapped indemnity with $5M products tower exposes the operator to first-dollar uninsured liability on any claim exceeding the tower.

Where possible, negotiate an indemnity cap aligned to your insurance limits, mutual indemnity for losses caused by sponsor acts, and carveouts for gross negligence and willful misconduct on both sides.

MSAs from innovator pharma sponsors, MSAs with limits or endorsements you have never carried, and MSAs with non-standard indemnity wording all warrant specialist review before signing. The cost of specialist review at MSA stage ($1,500-$5,000) is small relative to the cost of discovering a coverage gap mid-engagement.