Clinical trial liability limits, excesses and aggregation: practical risks

You’re reviewing a policy schedule that shows a £10 million limit, a £50,000 excess, and dense wording about aggregation clauses. Your broker says it’s “industry standard.” Your CFO wants to know if limits are adequate for a phase III trial across twenty UK sites. Your lawyer is asking whether a single manufacturing defect affecting multiple participants counts as one claim or twenty.

These aren’t theoretical questions. Clinical trial liability limits, excesses and aggregation work determines whether your insurance programme responds fully when incidents occur or leaves you carrying substantial uninsured losses. This article explains these mechanisms in practice—what the policy wording actually means, how insurers apply it when claims arrive, and what practical risks you need to understand before incidents occur.

What do policy limits actually mean—and how are they structured?

Insurance limits define the maximum the insurer will pay. But “maximum” can mean different things depending on policy structure.

Per-claim limits specify the maximum the insurer pays for a single claim or occurrence. If your clinical trials insurance has a £10 million per-claim limit and a participant injury claim settles for £3 million, £3 million is paid and £7 million of limit remains available for other claims during the policy period.

Aggregate limits specify the maximum the insurer pays across all claims during the policy period, regardless of the number of claims. If your policy has a £10 million aggregate limit and you face four claims of £3 million each, the first three claims exhaust the aggregate—the fourth claim gets £1 million and you carry the remaining £2 million uninsured.

Combined structures are common. A policy might show “£10 million per claim, £20 million aggregate.” This means each individual claim is capped at £10 million, but the total paid across all claims in the policy period cannot exceed £20 million.

Why structure matters: per-claim limits without adequate aggregate clinical trial liability limits create risk if you face multiple claims in a single policy period. A contamination incident affecting fifty participants creates fifty potential claims. If each settles for £200,000 (£10 million total) but your aggregate limit is £5 million, you’re carrying £5 million uninsured.

Defence costs: inside or outside limits?

Some policies pay defence costs (legal fees, expert witnesses, investigation costs) within the limit—defence spending reduces what’s available for settlement. Other policies pay defence costs in addition to limits.

“£10 million limit inclusive of defence costs” means if you spend £2 million defending a claim, only £8 million remains for settlement.

“£10 million limit plus defence costs” means defence spending doesn’t erode the settlement limit.

This distinction is material. Complex clinical trials claims can incur £500,000 to £2 million in defence costs before settlement. If those costs come from your limit, your effective coverage is substantially lower than the headline figure.

How do excesses and deductibles work in practice?

Excesses (called deductibles in some markets) are the amount you pay before the insurer pays. They exist to discourage small claims and align incentives—you retain skin in the game.

Per-claim excesses apply to each individual claim. If your policy has a £50,000 excess and you face three claims settling at £200,000, £150,000 and £100,000, you pay the first £50,000 of each claim—£150,000 total. The insurer pays the balance: £150,000 + £100,000 + £50,000 = £300,000.

Aggregate excesses apply once across all claims in the policy period. If you have a £50,000 aggregate excess and the same three claims, you pay £50,000 once, and the insurer pays £400,000.

Per-claim excesses are more common in clinical trial liability limits because they maintain incentive alignment across multiple incidents. Aggregate excesses can create perverse incentives—once you’ve exhausted the excess on the first claim, subsequent claims cost you nothing to report.

Defence cost excesses sometimes apply separately. You might have a £50,000 settlement excess but a £10,000 defence cost excess. Small claims that don’t exceed the settlement excess might still trigger defence costs if they require legal response.

Practical consequence for budgeting:

If you’re running five concurrent trials and your policy has a £50,000 per-claim excess, budget for potential excess payments across all trials. A phase III trial with 200 participants has higher probability of multiple claims than a phase I trial with 20 participants. Your financial exposure is the excess multiplied by a reasonable estimate of potential claim frequency.

What is aggregation—and why does it matter for multi-site trials?

Aggregation determines whether multiple related claims count as a single claim or separate claims for limit and excess purposes.

This matters enormously for clinical trial liability limits. A single manufacturing defect in investigational product distributed to ten sites affecting thirty participants could generate thirty individual injury claims. Are these thirty claims (exhausting limits and triggering thirty excesses), or one aggregated claim (counting once against limits and excess)?

How aggregation clauses typically work:

Most clinical trial liability limits include aggregation clauses stating that multiple claims “arising from the same originating cause” or “arising from a single act, error or omission” will be treated as a single claim occurring at the time of the originating cause.

Example clause: “All claims arising out of the same originating cause or circumstance, or the same series of related causes or circumstances, shall be considered a single claim for the purposes of the limit and excess, and shall be deemed to have been made at the time the first such claim was made.”

Why this benefits you in some scenarios:

If thirty participants claim injury from contaminated investigational product and the claims aggregate as a single claim, you pay one excess (£50,000) and the total settlements count once against your per-claim limit (£10 million cap for all thirty claims combined).

Why this creates risk in other scenarios:

If your aggregate limit is £10 million and a contamination event generates claims aggregating to £15 million, you carry £5 million uninsured—because aggregation treats it as a single claim, it exhausts your per-claim limit.

Without aggregation, if each of thirty claims settles for £500,000 (£15 million total), they might be treated as thirty separate claims. If your per-claim limit is £10 million but your aggregate limit is £20 million, you’re covered fully—the first twenty claims at £500,000 each exhaust £10 million, but the aggregate limit provides another £10 million for the remaining ten.

The practical tension:

Aggregation reduces your excess exposure but can exhaust per-claim limits faster. Whether aggregation helps or hurts depends on the relationship between per-claim limits, aggregate clinical trial liability limits, and total exposure.

How do insurers actually determine what aggregates?

Aggregation disputes are common in claims handling. Insurers apply policy wording to facts, and reasonable people disagree about what constitutes “the same originating cause.”

Clear aggregation scenarios:

A single batch of contaminated investigational product distributed to multiple sites causes injuries at those sites. This clearly aggregates—single manufacturing failure, single originating cause.

A protocol design defect that makes the trial inherently unsafe causes injuries across all sites. Single protocol, single originating cause—aggregates.

A data management system failure causes incorrect dosing instructions sent to all sites. Single system failure, single cause—aggregates.

Unclear aggregation scenarios:

Monitoring failures at three sites by the same CRO. Are these three separate negligent acts by different monitors, or a single systemic CRO oversight failure? Arguable either way.

Temperature excursions during transport to five sites using the same logistics provider. Are these five separate failures, or a single logistics provider systemic failure? Depends on whether it’s one refrigeration unit failure or five separate incidents.

Consent process failures at multiple sites. Are these site-specific failures (separate claims) or a sponsor training failure affecting all sites (aggregated)?

What determines the outcome:

The policy wording is applied to the specific facts. “Same originating cause” is narrower than “related causes or circumstances.” Sophisticated policies define aggregation terms explicitly.

When disputes arise, insurers and policyholders negotiate. If the financial stakes are high, coverage disputes can lead to litigation or arbitration over aggregation interpretation.

Practical advice:

When placing insurance, review aggregation clauses carefully. Understand whether your policy uses “same originating cause,” “same act or omission,” or broader “related circumstances” language. Broader language increases aggregation likelihood, which helps with excess exposure but increases limit exhaustion risk.

How should you model limits for multi-site phase III trials?

Phase III trials with hundreds of participants across many sites create the highest aggregation and limit risk. You need to model worst-case scenarios.

Worst-case modelling approach:

Assume a single manufacturing or protocol failure affects all sites. Estimate potential claims:

• Number of participants: 500
• Estimated injury rate in worst case: 10% (50 participants)
• Average settlement per claim: £200,000
• Total exposure: £10 million

Now test against your policy structure:

Scenario A: £10 million per claim, £20 million aggregate, claims aggregate

The fifty claims aggregate as a single claim (manufacturing failure). Total settlements: £10 million. Your per-claim limit covers it fully. Aggregate limit isn’t touched. You pay one £50,000 excess.

Result: Fully covered.

Scenario B: £10 million per claim, £10 million aggregate, claims aggregate

The fifty claims aggregate. Total settlements: £10 million. Your per-claim limit covers it, but you’ve now exhausted your aggregate limit. If a separate incident occurs in the same policy period, you have no remaining coverage.

Result: Covered, but programme exhausted.

Scenario C: £5 million per claim, £15 million aggregate, claims aggregate

The fifty claims aggregate. Total settlements: £10 million. Your per-claim limit caps payout at £5 million. You carry £5 million uninsured.

Result: Significant uninsured exposure.

Scenario D: £10 million per claim, £20 million aggregate, claims don’t aggregate

The fifty claims are treated separately. Each settles for £200,000. Total: £10 million. The first fifty claims are covered under the aggregate limit with room to spare. You pay fifty excesses (50 × £50,000 = £2.5 million).

Result: Covered, but high excess exposure.

The modelling reveals trade-offs: higher per-claim limits protect against aggregation scenarios, higher aggregate limits protect against multiple separate incidents, and lower excesses reduce out-of-pocket costs but increase premium.

What about limits for sponsors vs CRO insurance programmes?

Sponsors and CROs need different clinical trial liability limits, because their exposures differ.

Sponsors face direct participant injury liability. Limits should reflect:

• Phase and participant numbers (phase III with 500 participants needs higher limits than phase I with 20).
• Product risk profile (novel mechanisms, high toxicity potential).
• Multi-site exposure (more sites increases aggregation risk).
• Typical limits: £5 million to £20 million per claim for phase II/III trials, with aggregate limits at 2× to 3× per-claim limits.

CROs face professional liability for service failures. Limits should reflect:

• Contract portfolio value (£10 million in annual contracts might warrant £5 million to £10 million limits).
• Number of concurrent trials (more trials increases claim frequency risk).
• Typical limits: £2 million to £10 million per claim depending on CRO size.

CRO exposure is generally lower per incident but higher frequency. Sponsor exposure is lower frequency but higher severity per incident.

Bottom line for clinical trial liability limits

Clinical trial liability limits, excesses and aggregation aren’t abstractions—they determine your financial exposure when incidents occur. Per-claim limits cap individual payouts. Aggregate limits cap total annual payouts. Excesses define your retained loss per incident. Aggregation clauses determine whether related claims count once or many times against limits and excesses.

For multi-site trials, aggregation creates the highest risk for clinical trial liability limits. A single manufacturing failure affecting many participants can aggregate as one claim, exhausting per-claim limits faster than multiple separate incidents would. Model worst-case scenarios: assume a systemic failure affects all sites, estimate total exposure, and test it against your limit structure.

Ensure per-claim limits are adequate for aggregated multi-participant scenarios. Ensure aggregate limits are adequate for multiple separate incidents in a single year. Understand whether defence costs erode limits. Budget for excess exposure based on reasonable claim frequency estimates.

When incidents occur, aggregation disputes are common. Clear policy wording and good documentation of the incident timeline and causation help resolve disputes faster. But the best time to address these questions is at placement, not at claims time.

 

Simplify Stream provides educational content about business insurance for UK companies, especially those with high growth business models that require specialist insurance market knowledge. We don't sell policies or provide regulated advice, just clear explanations from people who've worked on the underwriting and broking side.