Since the onset of COVID-19, technology and life sciences have been thrust into the spotlight. As many businesses navigate the reality of remote or hybrid work, technology has taken on a new level of importance in day-to-day life. Life sciences companies also have become a larger part of the public consciousness, as people await updates about therapeutics and vaccine developments.
Data from Chubb and TechAssure’s latest survey of TechAssure’s insurance agent and broker members reveals that the technology and life sciences companies they serve are capitalizing on opportunities to continue propelling our world forward. More than half (58%) of respondents say COVID-19 led their clients to innovate new products or services they didn’t previously offer. Additionally, nearly a third (31%) say COVID-19 created new opportunities for their technology and life sciences clients to do business in domestic (U.S.) markets, and 28% say it created new opportunities for their clients to do business in international markets. Some companies are considering other avenues of growth: 48% of respondents say their clients are much or somewhat more likely to make a transformative acquisition due to the pandemic.
As technology and life sciences companies develop new offerings and grow, they should make sure they understand the possible impacts these operational changes may have on their risk profile. For example, risks and local insurance regulations can be complex and vary by region. As a result, it’s important for companies to have consistent, comprehensive insurance coverage and the appropriate risk management practices in place wherever they expand. When it comes to engaging in acquisitions, factors such as unknown liability exposures and possible misrepresentations in the purchase and sale agreement can introduce risk, making proper due diligence and insurance coverage all the more essential for a successful deal.
Companies also need to keep in mind the potential effects of external factors. When asked about their clients’ level of concern around key business challenges, agents and brokers surveyed report that 93% of their clients are very or somewhat concerned about supply chain shortages, 86% are very or somewhat concerned about emerging regulations impacting their industry and associated compliance requirements, 86% are very or somewhat concerned about privacy and data protection, and 81% are very or somewhat concerned about the increasingly litigious environment (up from 67% in 2019).
As business operations and external threats evolve, technology and life sciences companies should work with their insurance agent or broker to discuss potential implications for their risk management approach and insurance program. These companies may need to update how they manage risk – or implement ways to minimize new risks – as well as re-evaluate their insurance coverages and limits.
According to the survey data, many companies are already taking action or heading in this direction. Slightly less than half (45%) of respondents say their clients already have adjusted their insurance policies and coverages appropriately to respond to evolving business challenges, and 48% of respondents note that they are having conversations with their technology and life sciences clients about how to adjust their insurance policies and coverages appropriately.
Risk isn’t static, and companies’ response to risk shouldn’t be, either. Technology and life sciences companies should keep their insurance agent or broker apprised of changing needs to help stay protected from challenges on the horizon.
Veronica Somarriba is Executive Vice President, Technology Segment, North American Commercial Insurance.
The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.