Sponsor Vs CRO Liability: Who Is Liable In A Clinical Trial

What’s in this article

You’re negotiating a CRO contract, reviewing an indemnity clause, or answering an investor’s question about who carries risk if a participant is injured. The answer isn’t binary—sponsor vs CRO liability in clinical trials is allocated by statute, shaped by contract, and tested when incidents occur.

This article gives you the practical picture: what the law says, how contracts redistribute risk, where CROs typically accept liability and where they push back, and what that allocation means for insurance programmes and claims. It’s written from the underwriting and broking perspective—what actually matters when coverage decisions are made and claims are paid.

The law is clear: the sponsor holds primary legal responsibility.

Under the Medicines for Human Use (Clinical Trials) Regulations 2004 (as amended) and the broader regulatory framework overseen by the MHRA and Health Research Authority, the sponsor is accountable for trial design, protocol development, safety monitoring, regulatory compliance and participant welfare.

This isn’t a shared obligation. The sponsor carries it whether they run the trial in-house or delegate operational tasks to a CRO, clinical sites or other vendors.

Regulatory authorities and courts start from this position. If a participant is injured, if a protocol breach occurs, if safety monitoring fails—the sponsor is the first entity examined. The MHRA doesn’t inspect the CRO’s safety monitoring process and call it done; they inspect the sponsor’s oversight of that process.

Practical consequence: you can delegate tasks, but you cannot delegate accountability. Delegation requires documented competence, clear oversight and contractual alignment with your insurance programme.

What risks do CROs actually accept—and where do they push back?

CROs accept defined operational responsibilities, not blanket liability.

A competent CRO will take on delivery risk: patient recruitment, site monitoring, data collection, protocol adherence, local safety reporting and regulatory submissions they’ve been contracted to manage. They’ll also accept professional liability for errors, omissions and negligence in those tasks.

What CROs typically resist:

Protocol design defects. If the protocol is inherently unsafe, unclear or scientifically flawed, that’s a sponsor liability. The CRO didn’t design it; they’re executing it.
Investigational product failures. Manufacturing defects, contamination, labelling errors—these sit with the manufacturer or sponsor, not the CRO managing logistics.
Regulatory decisions. If the MHRA suspends the trial due to systemic safety concerns, that’s not a CRO delivery failure unless their monitoring or reporting failures caused it.
Uncapped financial exposure. CROs won’t indemnify sponsors for unlimited losses. They’ll cap liability at insurance limits, contract value or negotiated multiples.
Third-party vendor failures. If a laboratory you’ve selected delivers faulty analysis, that’s not the CRO’s professional failure unless they controlled vendor selection and oversight.

Where negotiation typically lands: CROs accept liability for their operational performance—monitoring lapses, data quality failures, reporting delays, site management errors. They don’t accept liability for risks they don’t control or exposures they can’t insure.

Contracts turn legal principles into binding obligations, and that’s where practical risk allocation happens.

Standard contract mechanisms include:

Indemnities. The CRO indemnifies the sponsor for losses caused by the CRO’s negligence, breach of contract or regulatory non-compliance. The sponsor indemnifies the CRO for protocol design failures, investigational product defects and sponsor decisions that cause harm.

These should be proportional. Underwriters scrutinise uncapped or one-sided indemnities because they create uninsurable exposures or drive up premiums.

Insurance obligations. Contracts specify minimum insurance types and limits the CRO must carry—typically professional indemnity, public liability and sometimes clinical trials liability cover. The sponsor commits to carrying participant injury insurance and broader sponsor legal liability cover.

Evidence matters. Requiring the CRO to provide current certificates of insurance naming the sponsor as an interested party or additional insured (where appropriate) reduces gaps and disputes.

Limitation of liability clauses. These cap the CRO’s financial exposure—often at the contract value, annual fees, or a multiple thereof. Underwriters prefer contracts with clear caps because unlimited liability is difficult to price and often excluded from standard policies.

Delegation logs and oversight records. Contracts should reference a delegation of duties matrix showing exactly which tasks the CRO controls and how the sponsor monitors performance. Underwriters want to see this at placement and renewal.

Practical consequence: misalignment between contracts and insurance creates problems at claims time. If your CRO contract requires them to indemnify you for protocol design failures but their professional indemnity policy excludes that exposure, you have a coverage gap that surfaces when you need it least.

Insurance programmes should mirror contractual risk allocation. When they don’t, you get friction, coverage disputes and awkward conversations with investors.

The sponsor’s programme typically includes:

Clinical trials insurance covering participant injury arising from the trial.
Sponsor legal liability for protocol design, consent failures and regulatory breaches.
Product liability for investigational product defects (often shared with or delegated to manufacturers).

The CRO’s programme typically includes:

Professional indemnity covering negligent performance, errors and omissions in contracted services.
Public liability for injury to third parties and property damage at trial sites.
Clinical trials liability in some cases, depending on whether the CRO is acting as a co-sponsor or carrying specific participant injury exposure.

What underwriters examine:

Does the CRO’s policy scope match their indemnity obligations? If the contract requires them to indemnify you for monitoring failures, does their professional indemnity policy cover that?
Are limits adequate? A £1 million professional indemnity limit won’t satisfy a contract requiring £5 million cover.
Are there exclusions that conflict with contractual promises? Some policies exclude regulatory penalties, cyber exposures or product-related claims. If the contract assumes these are covered, you have a gap.
Who is named on policies? Some contracts require the sponsor to be named as an additional insured or interested party. Policies don’t automatically include this—it requires endorsement.

Practical advice: Its not about “Sponsor vs CRO liability”, so exchange insurance certificates and policy summaries before contracts are signed. Identify gaps early, negotiate solutions and avoid discovering misalignment when a claim is filed.

Liability allocation isn’t theoretical. It determines who notifies which insurer, who controls the investigation, and who pays.

Here’s a practical example.

Scenario: A monitoring failure leads to protocol deviations and participant harm

A phase III cardiovascular trial discovers that multiple participants at two sites received incorrect dosing due to protocol deviations. The deviations weren’t identified during routine monitoring visits by the CRO.

What happens:

Immediate notifications. The sponsor notifies the MHRA, the REC and their clinical trials insurer within statutory and policy timelines. The CRO notifies their professional indemnity insurer because the monitoring failure is a core contracted service.

Investigation begins. The sponsor’s insurer commissions a root-cause investigation. The CRO’s monitoring visit reports are reviewed. Site training records are examined. The protocol’s clarity on dosing is assessed.

Liability assessment. The investigation concludes that the CRO’s monitoring was inadequate—visit frequency was below contracted standards, and site deviations weren’t escalated. However, the protocol’s dosing instructions were ambiguous, contributing to site confusion.

Claims and allocation. Participants file injury claims. The sponsor’s clinical trials insurer responds because they hold primary participant injury liability. The sponsor then pursues contribution from the CRO’s professional indemnity insurer based on the monitoring failure.

Contractual indemnity triggered. The contract includes a proportional indemnity: the CRO indemnifies the sponsor for losses caused by the CRO’s negligence. The CRO’s insurer negotiates a contribution reflecting the CRO’s share of fault.

Regulatory consequences. The MHRA examines the sponsor’s oversight of CRO performance. Documented evidence of contracted monitoring frequency, oversight meetings and escalation protocols supports the sponsor’s defence that they took reasonable oversight steps.

Why this matters: clear contractual allocation, aligned insurance programmes and documented oversight protect both parties. Vague contracts, missing insurance evidence and weak delegation records turn a manageable incident into a protracted coverage dispute.

Trials involve sponsors, CROs, clinical sites, manufacturers, logistics providers and laboratories. Liability often cascades through this network.

The practical approach:

Map the chain of delegation. Document who does what, who oversees whom, and where risk transfer occurs. Underwriters and lawyers want to see this when claims arise.

Require vendor insurance. If a manufacturer supplies investigational product, ensure they carry product liability insurance. If a logistics provider manages cold-chain distribution, require cargo and temperature-excursion cover. Collect certificates annually.

Align indemnities with capability. Don’t force a small clinical site to indemnify you for systemic product failures. Don’t force a CRO to insure manufacturer negligence. Allocate risk to those who control it and can insure it.

Anticipate subrogation. After settling a participant claim, insurers may pursue recovery from third parties. Contracts should clarify whether subrogation is permitted, limited or waived. This affects settlement negotiations and long-term vendor relationships.

Sponsor liability is the legal default. CROs accept operational liability for contracted services where they have control, competence and insurance. Contracts allocate risk between these positions—ideally in a way that’s proportional, insurable and documented.

Your insurance programme should reflect this allocation. Gaps between contracts and policies create friction at placement, disputes at claims time and investor questions during due diligence. The practical steps that reduce this friction: clear delegation matrices, aligned indemnities, vendor insurance certificates and documented oversight.

When incidents occur, liability is determined by evidence—what the contract says, what the policies cover, and what the investigation concludes. The better your documentation, the stronger your position.

External Resources

Medicines for Human Use (Clinical Trials) Regulations 2004. Primary legislation defining sponsor liability in UK.
Association of Clinical Research Professionals (ACRP) – Sponsor Oversight Resources. Specific resource pages on sponsor-CRO relationships. International professional body with guidance on delegation and oversight.