Pre-IND

First, review the basics of risk management and property and casualty insurance

Then, consider the specialized changes and additions that need to be made to the basic policies you decide on.

Here are some examples:

Protect your equipment and software: Standard insurance coverage is not adequate for the sophisticated equipment and software you use every day.

Protect the value of your pre-clinical investigations into promising substances or devices:

Protect your research documentation in whatever media

Protect the value of the research and development you have invested in animals, cell lines, cultures, specimens

Protect your income stream during the long initial period of unprofitability:

FDA estimates that, on average, it takes eight-and-a-half years to study and test a new drug before the agency

can approve it for the general public-- including early laboratory and animal testing, as well as later clinical trials

using human subjects.¹

Make sure your insurance coverage redefines the standard definition of business income so it will respond to

your stream of research expenses in combination with Grants, Endowments, Financial Contributions by 3^rd

Parties and Milestone payments.

Protect yourself against standard insurance exclusions regarding pollution and clean-up. In addition, make sure you are covered for direct physical loss due to contamination arising from microorganisms, liquids or gases in use in your laboratory.

Protect your directors and officers with Directors and Officers Insurance. Directors and officers make decisions and set, monitor and implement a wide variety of corporate policies that impact their firm's stockholders, vendors, clients, employees and the public at large. Consequently they are subject to a substantial risk of personal liability for the costs of settlements, judgments and defense associated with lawsuits and other legal proceedings brought against them. Directors and Officers policies can transfer a significant portion of this risk to an insurance carrier. The drivers behind purchasing this coverage are usually outside investors, outside directors and imminent plans to IPO. Even without these factors, you should still investigate purchase of this coverage. Currently, about a dozen firms write this coverage for privately-held firms. We market to them all, ask for appropriate additional coverages and provide you with a detailed comparison of the resulting offers for evaluation. You can include Employment Practices Liability on a Directors and Officers policy. This should not be considered an automatic decision because it can cause certain difficulties regarding adequacy of limits. Under certain circumstances, especially under older forms, all available limits could go to EPL actions leaving nothing for the directors and officers.

Protect your future insurability. Make sure your insurance carrier has the capabilities you need through the entire process, so you don't have to change horses in mid-stream. Take into consideration the:

Reputation and Financial stability of your carrier

History of dedication by your carrier to your specialization

Worldwide capabilities of your carrier because medical research and clinical testing are increasingly globalizing.

¹(“From Test Tube to Patient: Improving Health Through Human Drugs, US Food and Drug Administration, Center for Drug Evaluation and Research, Special Report,” 1999, p.14).