Category: Latest Thinking

The nutraceuticals market has been on the rise for the past few years with companies contracting with social media influencers to endorse the use of products that promise various health benefits, like weight loss, anti-aging or hair growth, on Instagram, Facebook and TikTok.  But first, what are nutraceuticals?  Ranging from teas to protein powders to gummies and beyond, nutraceuticals are commonly defined as substances or products that are derived from food and sold in either medicinal or foodstuff forms and provide medical or health benefits. 

In the United States alone, the nutraceuticals market is expected to reach $599.71 billion by 2030, according to Grand View Research. Social media has been one of the primary catalysts for growth in this sector with many companies capitalizing on social media influencers to provide authentic marketing for their products. However, the lack of oversight and control often associated with influencer content can pose serious risks for companies looking to promote nutraceuticals via social media. 

As the market continues to grow, federal agencies including the U.S. Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) have become more engaged in establishing regulations surrounding the marketing of the health benefits of nutraceuticals.  

This subject was further explored by Michele Fields, vice president and senior claim consultant at Conner Strong & Buckelew, in collaboration with Angela L. Angotti, partner at Bowman and Brooke, in an article published in the Food and Drug Law Journal. The piece dives into:  

• Specific risks associated with social media and influencer marketing for nutraceuticals 
• Current guidance from the FDA and FTC regarding nutraceuticals 
• Recent examples of enforcement actions from the FDA and FTC toward nutraceutical companies 
• Examples of state-level consumer protection claims that nutraceutical companies may be exposed to 

Fields and Angotti outline the critical need for proper mitigation and compliance strategies when it comes to marketing nutraceuticals on social media and how companies can ensure they are protected in the current regulatory environment. 

Click here to read the full article in Food and Drug Law Journal.

Shared with the permission of FDLI.

During winter months, it’s important for commercial property owners to prioritize snow and ice removal to ensure the safety of their premises. Neglecting this responsibility can pose serious risks to workers, customers and other third parties. To help prepare for snowfall, here are three practical steps to minimize these risks:

1. Create a Snow and Ice Removal Plan
Implementing an effective removal plan is essential in mitigating risks and liability exposures. A comprehensive strategy helps businesses stay consistent with how snow and ice removal is undertaken and provides documented instructions that can be communicated to workers and other involved parties.

Our Snow and Ice Removal Guide provides insights on creating a comprehensive plan, in addition to pre-storm preparation techniques, ice removal strategies and more.

2. Understand Your Legal Obligations
While property owners may take all necessary precautions, incidents and resulting claims can still occur, both third party and workers compensation. In defending claims that arise out of slip and falls on snow and ice, it is important to understand the duty of care and when the duty arises. In addition to having the responsibility as a commercial property owner, certain states have rules and laws as to when snow and ice must be removed from the property.

Many individual municipalities have their own codes, statutes and rules related to snow removal. However, several states recognize the duty to remove snow and ice with Snow in Progress doctrines. This doctrine states that a property owner does not have a duty to clear snow or ice during a snowstorm, but rather within a reasonable time after the storm ends. This chart outlines the states that follow a Snow in Progress doctrine.

3. Educate Employees on Winter Weather Safety
Train your employees on proper snow removal techniques and associated risks, especially if the task is completed in-house. Check out our resources on snow shoveling safety and tips to prevent winter weather-related slip and fall injuries to help facilitate these discussions.

The Conner Strong & Buckelew team is here to help ensure your company is prepared for the upcoming snow season. Should you have any questions, please contact your Conner Strong & Buckelew account representative.

In today’s digital world, the threat of compromised credentials and identity theft is a pressing concern for individuals and organizations. Unauthorized access to personal information, including usernames, passwords, and sensitive data, can lead to significant financial loss, reputation damage, and emotional distress. Understanding these cyber threats and taking proactive measures to mitigate risks is crucial.

Understanding the Threat
Compromised Credentials: Cybercriminals often acquire login details through phishing kits or data breaches, granting unauthorized access to sensitive accounts. These stolen credentials enable attackers to exploit multiple accounts linked to the same information.

Stolen Identity: Identity theft involves the unauthorized use of personal information for fraudulent activities, often leading to financial harm and reputational damage. Organizations must remain vigilant, as compromised customer data not only poses legal liabilities but also undermines trust.

Tips for Risk Mitigation

1. Vigilance and Prompt Action: Act swiftly. Immediately change passwords and report the incident to relevant authorities, including your IT department, bank, and law enforcement.

2. Enhanced Security Measures: Emphasize the use of unique, complex passwords and consider implementing a password manager to handle multiple accounts securely. Avoid reusing passwords across various platforms to prevent unauthorized access.

3. Multi-Factor Authentication (MFA): Enable MFA whenever available to add an additional layer of security. This will significantly minimize the risk of unauthorized access, even with compromised credentials.

4. Monitor Your Accounts and Credit Reports: Routinely monitor financial accounts for any unauthorized transactions and review credit reports for any irregularities or unauthorized activities.

5. Check for Exposed Credentials: Utilize services like “Have I Been Pwned” to see if your email or credentials have been part of a data breach. It’s recommended for organizations to use threat intelligence and dark web monitoring services.

6. Stay Informed: Stay up to date on the latest cybersecurity threats, phishing tactics, and data breaches to stay one step ahead of potential risks.

7. Employee Training: Educate employees on the best practices for maintaining the security of their personal and work-related accounts, emphasizing the importance of strong, unique passwords and cautious online behavior.

These proactive measures help organizations foster a culture of security and reduce the risk of compromised credentials and identity theft. Proactive measures are crucial in safeguarding sensitive information and preserving the integrity of both personal and corporate data.

Business email compromise (BEC) is a method cybercriminals use to generate revenue. It’s a social engineering attack that relies on psychological manipulation and deceptive tactics to defraud victims. However, with awareness, training, and the right preventative measures in place, organizations can significantly reduce their risk of falling victim to these costly swindles. Maintaining a skeptical mindset, verifying requests, and prioritizing cybersecurity in business operations are crucial.

Understanding BEC

Cybercriminals use BEC to ensure that fake email messages are trusted. Once access is gained, criminals study the email account owner’s behavior and impersonate their communications. The end goal is typically unauthorized access to another business email account or defrauding the company, its employees, clients, or partners for monetary gains.

BEC usually begins with cybercriminals compromising legitimate email accounts. By using a trusted email, cybercriminals can bypass technical tricks such as spoofing or fake addresses and dodge automated security controls. These emails often lack familiar signs of fraud, making them appear legitimate to employees.

The cybercriminals closely analyze communication patterns of the person and mimic legitimate communication styles to exploit trusted relationships between service providers, customers, and other business associates.

Types of BEC Attacks

• Credential theft: Employees are tricked into providing credentials to a fake website. Fake phishing sites usually resemble tools used at work, such as DocuSign, Microsoft, or Adobe login prompts. This includes multifactor prompts.
• CEO fraud: Cybercriminals impersonate senior executives, often the CEO, to request financial transfers.
• Fake invoice scheme: Suppliers’ emails are compromised and used to send fake invoices.
• Attorney impersonation: Cybercriminals pretend to be lawyers or legal firms to obtain confidential data.
• Data theft: HR personnel are targeted to extract employee’s personal data.

Factors Contributing to the Success of BEC Attacks

• Social engineering: Cybercriminals use skillful manipulation of human behavior to appear genuine.
• Trust relationships and processes: Unlike other phishing attacks, BEC scams are tailored, using specific knowledge about individuals, businesses, and their processes.
• Sense of urgency and duty: The trust employees have in colleagues to provide good services is manipulated.
• Lack of training: Employees may not be aware of the threat and fail to recognize the signs, especially when the email seems to be from a “real colleague.”

Protecting Your Business from BEC

1. Be skeptical and confirm communication requests on all platforms! Verify the legitimacy of suspicious emails or other communications, through direct contact by using a known number.
2. Multi-factor authentication (MFA): Implement multiple verification methods before granting access to accounts.
3. Advanced email security: Employ email filtering solutions that detect abnormal behavior and quarantine phishing and spoofing emails.
4. Regularly monitor accounts: Monitor business email accounts for any irregular or suspicious activity using behavioral email monitoring tools.
5. Verification procedures:  Establish a multi-person approval process for financial transactions or changes to HR information above a certain dollar threshold.
6. Employee training: Regularly educate employees about the dangers of BEC attacks, phishing, and psychological manipulation through social engineering.
7. Be cautious with public and personal information: Minimize the availability of your company’s hierarchy and roles online to make it difficult for hackers to craft believable scams. Avoid posting emails, phone numbers and personal details publicly on social media.

Vulnerabilities are inherent in the cyber world, posing significant risks to organizations. These vulnerabilities, often arising as software bugs, can serve as entry points for cybercriminals, granting them unauthorized access to your systems. To effectively address these vulnerabilities, timely and efficient patch management is key.

Understanding Patches
Patches are operating systems and software updates that are typically placed into three categories: security, bug fixes, and feature updates. Neglecting to patch vulnerabilities exposes your organization.

Testing & System Backup
Before deploying patches, testing is crucial to prevent the unintended introduction of other security vulnerabilities. Additionally, it’s advisable to create a full system backup in case unforeseen issues arise during the patch deployment process.

Prioritizing Patch Management
In cases where organizations rely on multiple software or firmware programs, prioritizing patch management is essential, considering potential system downtime during implementation. Sometimes, immediate implementation of security patches isn’t possible. In such cases, protecting the unpatched software from internet exposure or restricting user access is recommended.

Establishing a Patch Deployment Schedule
Designating a weekly “Patch Day” for planned system downtime is strongly suggested. This promotes user readiness and enables organizations to establish a personnel schedule for managing updates. Delaying the deployment of major security patches due to employee overtime expenses or potential unplanned system outages is not recommended. Time is of the essence when it comes to implementing security patches.

Staying Informed
Staying informed by regularly monitoring industry news and actively participating in online forums to stay up-to-date on the latest threats and vulnerabilities will serve you well.

Conner Strong and Buckelew’s Cyber Portal has additional resources on patch management. Contact your account representative to learn more about our cyber services or to help setup your cyber portal account.

Since 3D printing emerged, the technology has been used to create everything from construction materials and automobile parts to cheeseburgers and sneakers.

3D printing has enormous potential across industries, and one of the most transformative applications has been in the medical field. The technology has been used to create prosthetic limbs, body tissue, dental restorations and more. The FDA has approved hundreds of 3D-printed medical devices, and the sector is projected to grow to nearly $4.5 billion with a compound annual growth rate of 13% through 2026.

But one of the latest medical applications — 3D printed pharmaceuticals — has called into question whether the risks of leveraging this new technology outweigh the benefits for drug makers.

Manufacturing pharmaceuticals has been part of the 3D printing discussion for years, but it wasn’t until Aprecia Pharmaceuticals won the first 3D printed drug approval in 2015 that it became evident the FDA was willing to play in this space. Aprecia’s product, a tablet used to treat epilepsy, used a new process to make the medicine easier to consume — a significant advancement for patients suffering from seizures.

With this first drug now on the market, the future of pharmaceutical manufacturing could be poised to change dramatically. In the case of Aprecia, the 3D printing process is still controlled at the manufacturer level for now. But at some point pharmaceutical companies could transfer the creation process to pharmacies, hospitals and physicians with 3D printers, even leading to individualized treatment plans for patients.

While this technology holds great promise, it brings several risks. The use and abuse of 3D-printed drugs has been the subject of discussion and debate among pharma execs, insurers and the legal community — but the fact of the matter is, we’ve only scratched the surface of the complex risk landscape.

While there are many unknowns, three major risk areas should be part of the conversation.

1. Product Liability Risks
Common sense tells us that if a pharmaceutical company licenses its blueprint to pharmacies or healthcare providers to print drugs locally, it cannot possibly oversee the efficacy of every 3D printing operation. But it still needs to consider the potential product liability implications. Based on its role in providing the product blueprint alone, the firm may be partially responsible if an adverse incident or product defect claim arises.

In fact, parties across the manufacturing spectrum could be liable for the fallout. This might also include the printer manufacturer, the software designer, the material suppliers and the product manufacturer. Litigation in this area has so far failed to make headlines or help establish precedent for future cases. It’s unclear which parties will be most susceptible to product liability claims. Pharmaceutical companies venturing into 3D printing should develop a strategy for licensing their blueprints to ensure they’re financially and legally protected. The first conversations should include their lawyers and insurance brokers.

2. Cyber Risk
The proliferation of counterfeit medicines is perhaps the industry’s greatest concern with 3D printing. Printers are much more vulnerable to hackers than traditional manufacturing processes, and the incredibly short production time magnifies the risk of counterfeits.

For example, a hacker gaining access to a drug maker’s proprietary blueprint could bring the instructions to a manufacturing plant overseas to mass produce the drug. This exploitation of intellectual property could have a significant impact on a company’s bottom line. Plus, improperly made drugs may go to market and cause harm to patients — hitting the company’s financials and reputation.

Another concern is hackers making alterations to a drug’s recipe or doses within a hospital or pharmacy where it’s printed, leading to severe health consequences for patients.

While pharmaceutical companies can begin to protect themselves by adding tracer elements and watermarks to their formulations, they should also revisit their insurance policy to understand if — and to what extent — they’re covered for a cyber breach.

3. The Safety and Efficacy of 3D Printing
Traditional mass-manufacturing facilities are subject to intense oversight from regulatory bodies, which keeps products safer and provides solace to the insurers who cover them. However, the FDA cannot regulate every instance of 3D printing, so determining the safety of products developed and responsibility for adverse events is a murky area.

The idea of individualized medicine — whereby a patient’s age, weight, race or organ function could inform doses and production — has captivated the medical community since 3D printing became a reality. But the possibility of a printer defect or manufacturing malfunction remains a concern, as does placing responsibility for such an incident.

Importantly, 3D printing manufacturers must be diligent about vetting their suppliers, as contaminated or defective materials may yield a faulty product and pose an even larger threat than the printers themselves.

Recommendations
3D printing technology has the potential to open doors in product development, manufacturing and distribution for pharmaceutical companies. It could help fulfill the promise of personalized medicine, a concept that is growing in popularity within the industry.

For a firm considering a future in 3D printing, understanding risk exposures should be one of the first steps in determining whether it’s a worthwhile investment. Pharmaceutical companies should work closely with their IT and manufacturing colleagues to understand the risks, and tap into insurance experts, their broker and underwriters to ensure that insurance coverage is properly crafted to address these three — and likely many other — risk exposures.

Wire transfer fraud presents a significant financial risk to organizations worldwide. As cybercriminals continue to advance their tactics, it is vital for organizations to implement internal controls to detect and immobilize cybercriminals in their networks.

Once cybercriminals infiltrate a network, they gain access to banking credentials, allowing them to initiate unauthorized wire transfers and redirect incoming payments. Often these criminals impersonate company employees, remaining undetected while testing small transfers to both foreign and domestic shell accounts. If they’re successful, they will authorize larger fraudulent transfers.

Failure to recognize fraudulent transactions early on can result in substantial financial losses and operational disruptions. It can be difficult to claw back the funds once the wire transfers are complete, leaving organizations to the mercy of their cyber policy sub-limits.

To effectively mitigate these risks, organizations should implement the following cybersecurity measures:

1. Employ defensive tools and strategies, such as endpoint detection and response software

2. Mandate “cyber hygiene” training for all network users

3. Require the use of multifactor authentication (MFA) and virtual private networks (VPN) for network access

4. Monitor bank accounts daily for suspicious activity, such as unusual payments and changes to permissions and credentials

5. Update banking controls by banning international wire transfers, adding Payee Positive Pay, establishing account alerts, and establishing weekly/monthly limits on wire transfer amounts

6. Strengthen payment verification practices, such as requiring two or more authorized users to approve payments

Should your organization fall victim to wire transfer fraud, contact your Conner Strong & Buckelew Claim Advocacy & Consulting team immediately. Visit our Cyber Portal to access additional tools, trainings and resources to help keep your organization safe.

The Pennsylvania Compensation Rating Bureau (PCRB) has announced that it is filing for approval of changes to the Pennsylvania experience modification rating calculation.

Who Will It Effect?
Potentially any employers with employees in Pennsylvania.

When Will It Occur?
The filing is expected this month (June 2023) with an effective date of April 1, 2024.

How Will It Impact Employers?
At this time, it is clear that Pennsylvania employers will see a change in their experience modification based on the new rating calculation. The PCRB is expected to host webinars and trainings, as well as, post a new experience modification calculator on its website in the coming months. Conner Strong & Buckelew will be keeping abreast of the PCRB roll out and providing timely information and individualized impact analysis to our clients.

What Should Employers Do Now?
Prepare to embrace the change, be on the lookout for updates from Conner Strong & Buckelew and communicate with your account team early in the renewal cycle.

By Juanita Gadsden, Claim Consultant at Conner Strong & Buckelew

As published by CLM’s Construction Claims magazine, Summer 2023

Several recent appellate court rulings in New York could indicate a shift in how courts are viewing cases involving Section 240 of New York State Labor Law, also known as Scaffold Law.

As all New York property owners and general contractors know, Scaffold Law has presented a wide range of legal, insurance and risk management challenges over the past several years. While originally passed to protect construction workers from serious falls, falling objects and other elevation-related accidents, the Scaffold Law evolved into a major area of risk and has led to several multi-million-dollar lawsuits.

The Scaffold Law imposes strict liability on property owners and general contractors in the event of an elevation-related accident on a job site. Even if the worker was partially at fault for the accident, property owners and contractors can find themselves being held liable for damages.

Until recently, property owners and general contractors had little legal recourse when targeted by a lawsuit. This led to increases in defense costs and multi-million-dollar claims as well as increased insurance costs that drive up overall construction costs in New York. These additional expenses elevate the total construction costs of a given project by as much as 10% on average, according to a report from the General Contractors Association of New York. However, recent rulings are suggesting this could be changing.

Favorable Recent Case Rulings
Last year, the New York Court of Appeals issued three significant decisions in cases involving plaintiffs falling off ladders. The courts’ language in these decisions indicate that New York courts should use a broader analysis when assessing whether an actual Labor Law violation has occurred during these types of accidents and consider whether the plaintiff could be at partial fault for the accident by not performing certain safety checks. Further, these rulings indicate courts must remember that a plaintiff’s fall at a workplace does not automatically mean a violation of Labor Law 240(1) has occurred.

This represents a significant shift from prior rulings where courts almost automatically ruled in favor of plaintiffs whenever an elevation-related accident occurred. Based on the language of these recent rulings, it appears courts are now interested in pursuing more vigorous investigations into what safety precautions were taken, the events leading up to the accident, and ultimately which party is responsible for the accident.

Defense Is the Best Offense
These rulings could open the door for property owners and general contractors to better protect themselves from these lawsuits. Given this environment, it’s now more important than ever for property owners and general contractors to implement additional risk management measures to protect workers on the job. When it comes to NY Labor Law, defense is the best offense. Taking these steps today could save property owners and general contractors millions of dollars in claims, legal fees and settlements down the line should an unfortunate accident take place on their job site.

Here are a few steps property owners and general contractors can take today:

1. Create a robust safety program and regularly update it with the latest safety guidance. These programs should include clear language around elevation risks and how workers can best protect themselves from a potential accident.

2. Implement and exhaustively train staff about the safety program. Creating a plan is just step one. Safety teams must regularly train staff on safety best practices and constantly remind workers on how to protect themselves.

3. Create an incident response plan before an accident takes place. When an accident happens, general contractors and property owners do not want to be caught flat footed. They must have a clear plan in place so that they can hit the ground running to collect evidence, secure witness statements, and help workers get the healthcare they need. Evidence and witness statements will be essential should an accident ever result in a lawsuit.

4. Build a strong return to work program that helps workers recover quickly. It’s important for anyone impacted to feel appreciated and that their health is being prioritized. This means communicating regularly, ensuring they have access to care, and perhaps putting them back to work in office or administrative roles while their injuries heal.

5. Sign risk-transfer agreements to contractually transfer potential Scaffold Law liability to subcontractors. By writing appropriate language into their contracts, including hold-harmless provisions and broad indemnity agreements, property owners and contractors can shield themselves from liability in the event of an accident.

While the legal environment around New York Scaffold Law continues to unfold, elevation-related accidents can still present general contractors and property owners with serious legal headaches. It remains crucial these parties seek guidance from an insurance broker well-versed with the exposures, claims and legal precedent surrounding the complex Scaffold Law. A knowledgeable broker can ensure property owners and general contractors have the proper support they need before and after a potential accident occurs.

With a comprehensive plan in place and expert team resources, property owners and general contractors can be better prepared for accidents that result in lawsuits, thus protecting themselves from a potentially devastating financial situation.

By Daniel Brettler

In the early 1950s, a woman named Gussie Perlmutter sued a New York City hospital, alleging it infected her with jaundice and hepatitis viruses during a blood transfusion. She considered the transfusion, which cost $60 at the time, the sale of a product, for which the hospital would be liable.

Perlmutter argued that while restaurants can be said to provide a service, you really go there and pay to consume the food, so it’s truly the sale of a product. The New York State Court of Appeals agreed with that point, but said it was not analogous to hospitals. When a patient enters a hospital, “He goes there, not to buy medicines or pills, not to purchase bandages or iodine or serum or blood,” the court said, “but to obtain a course of treatment in the hope of being cured of what ails him.”

The court held that providing blood is considered a service, and in the following decades almost every state legislature in the U.S. created laws to make that clear. These statutes are referred to as blood shields, because they protect manufacturers, producers and providers of blood from unlimited liability, with the intent of ensuring a reliable supply of blood and related resources. The threat of potentially devastating lawsuits from a transfusion or transplant gone wrong could put a chilling effect on this lifesaving industry, so legislators have made sure to protect this public service.

These laws and subsequent cases also hold that blood shields extend far beyond blood. Blood products and derivatives, bodily tissue, organs, parts of organs and even semen have all fallen under these laws, depending on the situation and jurisdiction. Today, stem cells and cell therapy continue to evolve and shape the way we apply blood shield statues to new technologies.

How Life Science Companies Aren’t Completely Shielded

While blood shields protect against unlimited liability, they don’t provide unlimited protection. Instead, legislators have balanced the need to protect supplies with the public need for accountability in the medical professions by permitting suits based on negligence and other definitions of “fault.” Manufacturers, producers and providers still need to follow all established protocols and best practices to ensure safe services as much as possible.

Furthermore, states do not all provide the same level of protection. New Jersey, for instance is an outlier state that does not have a blood shield statute. Neighboring Pennsylvania’s law covers a broad range of blood and related products, whereas New York has less expansive language. That means a company doing business in all three may be facing varying levels of liability.

Combined with the hodgepodge of state laws and ongoing innovation in the field, it’s clear that many risks still remain for life sciences companies affected by these statutes. Businesses selling or researching products in multiple states are left in a position of uncertainty. Shields provide significant potential protections to those in a position to take advantage. Variances on a state by state basis present a challenge to insurance companies in pricing the coverage that they offer their insureds, and also in adequacy of policy language that needs to be considered.

Importantly, insurance policies have to be created with full knowledge of blood shield statutes in each state a company does business in, also grasping how they are interpreted and how the policy language must be crafted to be in sync with the laws.

Understanding Your Policy in Light of Blood Shields

While blood shields were designed to provide protection for life science companies, they also add a layer of complexity while crafting insurance policies.

Life sciences companies generally have a set of core liability insurance policies, and most often rely on general liability, products liability, medical malpractice, and errors and omissions coverage to provide defense and pay damages from any claims. How these policies are compiled varies by sector; for example, manufacturers and distributors that do not have regular exposure to medical professionals may have simpler, condensed policies.

Exactly what these policies cover may not always be obvious when it comes to blood and blood products. For example, it’s customary that product liability policies contain a healthcare professional liability exclusion, meaning that insurance carriers may not cover loss when professional services are provided. These professional services are typically defined in policies as various, broadly stated medical service offerings — but may include blood transfusions depending on the blood shield laws in that particular state.

Similarly, general liability insurance policies can leave companies exposed to risk if they are not properly crafted. These policies are designed to handle claims for bodily injury and property damage, but may contain exclusions for products liability and the use of healthcare professional services.

The result is that life sciences companies working with blood products and their derivatives may be exposed to risk even if they are insured. That’s certainly not intuitive for the business person who may be in the business of producing what they consider their “product” or “work,” whereas the statutory definitions consider the same thing a “service” or “medical service.”

But even having extensive knowledge of policy exclusions may not be enough — life sciences companies also must be diligent in understanding how blood products are classified in their states. For example, Indiana’s blood shield statute considers the transfusion of human tissue by a hospital or blood bank to be a service, but it does not include pharmaceutical companies that commercially produce blood products for mass distribution, as this process is characterized as “sale of a product” rather than “provision of a service.”

Yet another wrinkle is that because providing blood is classified as a service in most states, it is not subject to products hazard exclusion of general liability policies. This means that life sciences companies are protected should an insurance carrier claim that a blood product is intrinsically dangerous and should be omitted from standard coverage. However, blood shield statutes are not uniform across all 50 states, and in fact New Jersey and the District of Columbia do not have statutes at all, so constructing an insurance program needs to be carefully considered with regard to where business is taking place.

This field is constantly evolving. As the industry continues to innovate and generate interest around stem cell research, the FDA and individual states may be well-served to reconsider its classification and establish updated guidelines and protections similar to blood shields. Currently, stem cells are widely considered “products” and are regulated as such. This was reinforced in a case involving Regenerative Sciences, which argued that cell therapies are considered medical practices (“services”) rather than drugs (“products”), and therefore the company’s therapy procedure for the treatment of arthritis was not subject to FDA regulations. However, the U.S. Court of Appeals confirmed in February 2014 that Regenerative’s stem cell mixture fell within the FDA’s definition of a drug, upholding the FDA’s continued regulation of “more than minimally manipulated” stem cell therapies.

In the same vein, the industry may be approaching its tipping point in regard to state versus federal standards for blood products. With so much uncertainty surrounding blood shields, it may be time to advocate for a uniform standard at the federal level. Until then, life sciences companies should work closely with their carrier and broker to understand and integrate protections from local blood shield laws into their policies.