Pharmaceutical & Medical Device CDMOs · Texas
The MSA arrived. The insurance section is seven pages long. You have ten business days.
Most CDMOs receive their first $5M products liability requirement, additional insured for products and completed operations, primary and non-contributory wording, waiver of subrogation, and a 30-day notice of cancellation provision — all in a single MSA section — and discover they have to rebuild their program from a base form designed for general light manufacturing.
We specialize in that rebuild. Read the specifics below, or run the MSA Decoder to map your sponsor's specific clauses against the gaps.
Problem 01 · Coverage architecture
Your current program was built on a generic light-manufacturing template.
Most CDMOs were placed by an agent who treated the company like any other manufacturer: Texas-domiciled, under 100 employees, packaged in a BOP or middle-market manufacturers package. The base form is wrong.
Pharmaceutical and medical device contract manufacturing requires an account-specific products liability rating, a recall extension or standalone recall policy, cargo/warehouseman's legal liability for sponsor-owned API and finished product on premises, and — increasingly — a cyber program built around drug master file data and PHI handling.
We rebuild from the base form up. Same coverages, different architecture.
Problem 02 · MSA compliance
The certificate of insurance you have on file does not satisfy a strict reading of the MSA.
Modern insurance policies do not include carrier-issued notice to certificate holders by default. The "endeavor to provide notice" disclaimer on most COIs technically does not satisfy a 30-day notice of cancellation clause. Some sponsors enforce this. Most do not — until they do.
Similarly, a blanket additional insured endorsement that covers ongoing operations but excludes products/completed operations is not compliant for a contract manufacturer, even though the COI shows AI status. We audit COIs against the actual MSA language, not against a generic checklist.
Problem 03 · Indemnity exposure
One-way indemnity, uncapped, is a balance sheet event waiting to happen.
Sponsor MSAs increasingly include one-way indemnity clauses where the manufacturer indemnifies the sponsor for any claim arising out of the manufacturer's services — without a cap, without carve-outs for sponsor-supplied materials, sponsor specifications, or sponsor-directed manufacturing changes.
A claim that exceeds the insurance limit becomes a direct claim against company equity. We work with you (and your counsel) to push for: mutual indemnity, a cap aligned to insurance limits, and carve-outs for sponsor-controlled inputs. None of these are exotic asks. All are negotiable.
Problem 04 · Renewal lapse risk
The most expensive losses we see are operational, not underwriting.
A COI that lapsed because nobody on the manufacturer's side flagged a renewal date triggered an automatic stop-work clause in a sponsor MSA, and the sponsor moved a $4M campaign to a different facility. We have read the post-mortem.
We build a sponsor-by-sponsor compliance ledger. Each MSA gets logged against required coverages, endorsements, limits, and notice provisions. Renewal certificates issue automatically, 60 days before policy expiration, to every sponsor on file.
Carrier access
We place programs through carriers that actually underwrite life sciences as a class.
Generalist carriers will write a CDMO and price it as a standard manufacturer. The placement looks fine on the COI. The placement falls apart at first claim, when it turns out the products endorsement excluded recalls, or the cargo coverage capped at $250K against $3M of sponsor materials on the floor.
Our placements run through carriers with dedicated life sciences underwriting and, where appropriate, surplus-lines specialty markets accessed through a wholesale partner. We know which markets will write injectable vs. oral solid dose, which will accept controlled-substance handling, which will quote a Texas non-subscriber with a credible safety story, and which will not.
Pricing
Wondering what this typically costs?
Premium ranges by coverage type, the factors that drive cost, and three sample programs for Texas CDMOs.
Frequently asked
Common questions from CDMO and CRO buyers
What is the most common MSA insurance compliance gap for CDMOs?
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Additional insured status for products and completed operations. Most CGL policies provide blanket additional insured for ongoing operations but exclude products/completed ops from that endorsement. For a contract manufacturer, products is the entire point — so the gap matters. The fix is usually an ISO CG 20 37 endorsement or a manuscripted blanket equivalent.
How much does $5M products liability cost for a Texas pharma CDMO?
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For a CDMO in the $10M to $50M revenue range manufacturing oral solid dose or topical products, a $5M products liability tower (typically $1M primary + $4M umbrella) generally runs $35,000 to $90,000 per year. Higher-risk categories (sterile injectables, biologics, oncology) start at $80,000 and can exceed $250,000.
What does "additional insured for products and completed operations" mean?
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It means the sponsor is named on your CGL policy as an additional insured, and that additional-insured status applies to claims arising from your finished products after they leave your facility. This is materially different from ongoing-operations AI, which most generic blanket endorsements provide.
Do I need a separate clinical trial liability policy if my sponsor handles trials?
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Usually no. Sponsors typically place clinical trial liability for the trials they run, with you as additional insured. The exception is when an MSA pushes the obligation onto you — uncommon but read the indemnity and insurance sections carefully.
How long does it take to fix MSA insurance gaps?
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Endorsement-level fixes (additional insured, waiver of subrogation, primary/non-contributory) typically take 5 to 10 business days through an existing carrier. Adding limits or rebuilding architecture is a 30-to-60-day underwriting process and usually waits for renewal.
What carriers should I look at for pharma contract manufacturing?
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For Texas CDMOs in the $5M-$200M revenue range, the dedicated life-sciences markets — three or four nationally-recognized specialty insurers — have both the appetite and the form depth to write a compliant program. Larger global carriers also play in the segment, typically at higher revenue tiers, alongside London-market layers for specialty risks.
What is a "primary and non-contributory" requirement and why do sponsors ask for it?
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Primary/non-contributory means your policy pays first and does not seek contribution from the sponsor's policies. Sponsors require it because they do not want their carrier dragged into a claim that originated with your manufacturing process. Most CGL policies can add this via endorsement at minimal cost.
Free MSA review
A specialist will reach out by the end of the day.
About the platform: Life Sciences Liability connects you with insurance specialists who place pharmaceutical, medical device, and CRO programs.