INDEMNIFICATION AND SUBJECT INSURANCE IN CLINICAL RESEARCH
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Objectives
Understand the concept of Indemnity & Insurance. Study the various elements of an Indemnity Agreement. Exception of Indemnity Agreement. Terms of Indemnity Agreement. Elements of Subject Injury Reimbursements.
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Dictionary Meaning
Indemnify Pay money to someone to compensate for harm or loss. Insure someone against legal responsibility for their actions. Insure Pay money in order to receive financial compensation if something is lost or damaged or someone is hurt or killed.
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Definitions
…contd.
Agents - any nurse or other health professional providing services to the Institution under a contract for services, any person carrying out work for the Institution under a contract connected with Institution’s facilities and equipment as are made available for the study.
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Indemnification-Investigator
Sponsor developed the drug / device. Sponsor wrote the Protocol. CTA requires that Institution/PI follow the Protocol and Sponsor’s written instructions……
Sponsor should indemnify for any injuries, illness or damages arising from trial activities, basically investigator for the study
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CRO Involvement:
The CRO does not provide indemnification (or subject injury), it is provided by the Sponsor
Separate Letter of Indemnification (“LOI”) signed by Sponsor Provisions incorporated in the agreement with CRO
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“Assumption of trial risk is part of the cost
of business. If indemnification is not provided, academic Institution is shouldering the risk of running Sponsor’s trial”
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Elements of Indemnification
Indemnify, defend and hold harmless Identify the proper parties/entities to be indemnified (e.g. Trustees/ Directors, officers, employees, agents, affiliates, students) Cover broadest liability losses (e.g. claims, demands, costs, liabilities, judgments) Cover broadest potential damages (e.g. any injury, death, illness, property damage) Cover all activities that may lead to claim (e.g. administration of study drug or comparator, implantation/use of device and accessories, procedures required by the protocol, following written instructions from Sponsor/agent) 8
Indemnity Elements
Sponsor will indemnify… Institution and any agents, employees, (etc.) under the supervision of investigator Sponsor will indemnify… for any judgment due/ damages awarded Sponsor will indemnify… for any bodily injury Sponsor will indemnify… for any injury not related to a claim of indemnitee’s negligence Sponsor will indemnify… for any claim…directly caused by administration of the drug/ device
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Exceptions to Indemnification
Any claim demand, cause of action, expense, loss to the extent caused by Indemnitee’s -negligence, -willful malfeasance, or -failure to follow the Protocol or written instructions, unless deviation to protect safety of subject. -any claim, etc. to the extent caused by Institution’s failure to obtain proper informed consent.
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Terms of Indemnification
As soon as reasonably practicable following receipt of notification of claim notify in writing to the other party (sponsor/Institution) about any claims. Sponsor to have full control of the claim or proceeding & use legal representation of its own choice. Sponsor to keep Institution informed of the progress of any proceedings. Both parties to provide help as required for efficient conduct and prompt handling of any claim or proceeding.
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Terms of Indemnification
…contd.
Sponsor will indemnify…provided that: Study conducted in accordance with the Protocol, all written instructions delivered by Sponsor, all laws and regulations, accepted standards of medical and clinical practice and GCP Guidelines… Sponsor shall have the sole right to select defense counsel, direct the defense, settlement, or other disposition of any Claims, and witnesses for purposes of pre-trial preparation, discovery, and/or trial. Sponsor will indemnify provided that Institution strictly follows the Protocol
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Do Indemnification Provisions Work?
“First line” of defense May determine who covers the initial costs until party or parties “responsible for the claim” is determined from the facts Helps define role of sponsor’s insurance provider Handling conflict of interest issues from joint representation
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Subject Injury
Assumption of trial risk is part of the cost of business. If subject injury protection is not provided, subject volunteers are shouldering the risk for getting Sponsor’s drug to market.
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Elements of Subject Injury
Cover broad potential injuries to subject (injury, illness) Cover broad potential expenses of subject (diagnosis, medical care, hospitalization) Cover all research components of the study (i.e. administration of drug or comparator, implantation/ use of device, explanation of device, procedures required by the protocol Be careful about language specifying who determines causation Exceptions: no payment to extent injury caused by Institution’s negligence, willful malfeasance, failure to follow Protocol
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Subject Injury at Issue
Sponsor will pay subject for the costs…. Sponsor will reimburse Institution for Institution’s reasonable expenses for treating subject… Sponsor will pay for unexpected and un forseable injuries caused by the Study Sponsor will pay for costs of emergency medical treatment necessary to stabilize subject…
In the event that a patient in the Study suffers an illness or injury that Institution and Sponsor determines is caused by Study Drug…
Sponsor will pay up to the aggregate amount of ………./Dollars / subject, provided the illness or injury was caused by unanticipated serious problems associated with the Device
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Insurance-Subject
Contract where one party will indemnify another or agree to pay a specified amount upon determinable contingencies
First party - the insurer Second party – the insured The contract – the insurance policy The consideration – the premium The contingency – the hazard or peril The exclusions – no coverage for specific actions / occurrences
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Insurance
Sponsor shall maintain insurance sufficient to provide coverage for its obligations under this indemnification and subject injury, subject to a minimum of ____ dollars / occurrence combined single limit and ___ dollars aggregate, and shall provide Institution with a copy of its insurance certificate upon request
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Certificates of Insurance
Why obtain certificate of insurance?
Verify coverage is what required in agreement
Typical malpractice policies do not provide coverage for clinical research
Use in case sponsor goes out of business so you can file claim against insurance carrier
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Disagreements Over Indemnity and Subject Injury Language Can Cause Prolonged Negotiations
Evaluate the risk being addressed by the language relative to the specifics of the particular study There are occasions when the parties are unable to reach resolution after great expenditures of time Both industry and academia suffer the consequences of contentious negotiations:
Expenditures of time Expenditures of resources Trial delays, patient recruitment delays Other sites enroll and recruitment closes before your site has reached agreement
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Thank you
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