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ComplianceNegotiable

Survival of Coverage Post-Termination

What this clause says

Manufacturer shall maintain the required coverages for a period of not less than five (5) years following the expiration or termination of this Agreement, or for the applicable statute of repose, whichever is longer.

What this means in plain English

You have to keep buying insurance for years after the contract ends.

What it means for a CDMO program

Most products liability statutes of limitation/repose are 4-15 years depending on state and product type. A 5-year tail is reasonable for occurrence-form products coverage (which already responds to incidents that happened during the policy period). For claims-made coverages (E&O, cyber), the tail is purchased separately as Extended Reporting Period and is meaningfully expensive (typically 100-300% of the last full annual premium for unlimited tail).

How this evaluates

The Decoder applies these rules in order; the first match wins.

  • compliance › tail required is not set → Compliant: No specific tail concern flagged.
  • compliance › tail required is set → Borderline: Tail/ERP requirements need broker review, especially for claims-made policies.

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Questions about compliance

Survival of Coverage Post-Termination — common questions

Why do sponsors require coverage to survive contract termination?

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Products liability claims often surface years after the contract ends. Survival language requires you to maintain coverage (or run-off) for a set period after the MSA terminates — typically 3-7 years for products, longer for clinical work.

Is run-off coverage expensive?

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For occurrence-form CGL, run-off is implicit (you keep the same policy). For claims-made coverage (E&O, cyber), tail policies cost 100-300% of one annual premium. Plan for this when the MSA is signed.

Can I negotiate the survival period?

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Sometimes. Statutes of limitation for products liability vary by state (Texas: 15 years for design defect from date of sale). Match the survival period to the actual statute, not the sponsor's first ask.