The markets that write medical equipment products coverage do not limit themselves to insuring only manufacturers. They also insure distributors, retailers, importers and exporters. The experts quoted in this article place coverage for all of these, but the emphasis and level of interest varies by market.

The medical equipment products market, while limited, is nevertheless available. The market is not monolithic and depends on the type of product and the company providing the coverage. Mark D. Wood of CNA – Advanced Medical Technology, Joe Schneider of Jimcor, and Robert F. Wright of AmWINS Brokers of CA offer only nonadmitted paper. Thomas Konopka of Medmer Insurance Group provides both admitted and nonadmitted coverage, while David Oleson of VGM Insurance uses admitted coverage for the most part.

The biggest problem line is products coverage. Mr. Oleson points out that placement is difficult because, “Only a very few carriers are specializing in this coverage.” Mr. Wright counters that “It is not particularly difficult to place.” Mr. Schneider takes a middle ground saying, “Products liability can be difficult to place for invasive medical products.”

While the medical equipment product liability market is limited and placements are sometimes difficult, it becomes more difficult when the product is sold to the general public. Mr. Konopka says, “The coverage doesn’t change but the pricing does, with home use products charged a higher premium.” Mr. Woods adds that, “The coverage may not change but the exposure being underwritten does.” “Many home users are not professionals trained specifically to use the equipment and that makes the products exposures slightly greater,” according to Mr. Wright. Along the same line, Mr. Oleson presents an interesting insight when he says, “The liability risk shifts to the dealer because they are required to set up the equipment and inform the patients on how to use it properly.” A more ominous concern comes from Mr. Schneider who points out, “The potential for class action lawsuits grows, which greatly increases the exposure to the carrier.”

Products coverage is provided with no unusual attachments or restrictions. Mr. Schneider points out, “Most markets will cover sales of products on a worldwide basis, but will restrict coverage only to suits brought in the United States or its territories.” This means that exporting manufacturers must obtain coverage through an international market.

Insureds that import medical equipment products have unique problems. Mr. Konopka points out, “At times we find importers of products do not appreciate that they are viewed as the manufacturer.” Mr. Schneider shares, “The challenge in placing coverage for products produced overseas is that we must understand that they are manufactured according to different standards and regulations.” Mr. Wood views direct importing as just one of the many variables that must be considered saying, “We take these into account when underwriting and pricing the risk.” Mr. Wright agrees that this attitude is fairly consistent in the market. He says, “The United States distributor is often rated as the manufacturer due to the fact that non-US manufacturers may not have insurance, and if they do, if may not be up to United States standards.”

The limits available in the market range from $ 1 million to $20 million depending on the market and the type of insured. Retail risks will usually accept lower limits, while manufacturers and distributors will normally request higher limits. Contractual relationships may determine the actual limits requested. According to Mr. Oleson, Medicare requires limits of $300,000/$300,000 while many other contracts demand $1,000,000/$3,000,000.

A final area of concern mentioned by our experts is the need for professional coverage. Most devices must be prescribed or recommended by a physician if insurance is to respond. This places the medical products equipment dealer/distributor in a role similar to that of a pharmacist. The dealer/distributor not only supplies the equipment or oxygen but also trains the customer in the proper use of the particular device and provides service and maintenance. Most medical equipment products markets have endorsements available that meet this need – but only as incidental. John Liberty of Cushman Insurance points out that such incidental professional coverage “covers the insured entity but not the individual professionals themselves. Coverage for the individual may be available by endorsement, many pharmacists and respiratory therapists can get their own professional liability coverage very inexpensively through their Association.”

The experts all agree that even with a limited number of markets available, pricing in 2008 will be more aggressive than in 2007. However, this does not mean that all risks will see price reductions. There are pockets where prices will increase and others where it will remain flat.