CHAPTER § 5.01 Introduction to Insurance Coverage Issues

• Jurisdiction: United States

§ 5.01 Introduction to Insurance Coverage Issues

Insurance is often understood in terms of risk: "risk sharing, risk management, risk control, risk transfer, risk distribution, risk pooling, risk allocation, risk retention (self-i nsurance), and reinsurance risk transference."¹ "Essentially, insurance is a contract by which one party (the insurer), for a consideration that usually is paid in money, . . . promises to make a certain payment, usually of money, upon the destruction or injury of 'something' in which the other party (the insured) has an interest."²

Managing, transferring, and mitigating risk in the pharmaceutical industry is unique given the significant and varying risks that pharmaceutical manufacturers face. As one consulting company has noted, "In a politically and economically turbulent environment, the risks pharma companies face, especially in clinical-trial design and execution, drug approval, product quality, and global commercial practices, are increasing in both frequency and magnitude."³ These risks continue to...