Specialty Products Liability.

The policy responds to third-party claims that the device caused bodily injury or property damage. It covers the cost of defending the claim and any settlement or judgment within the limit. Allegations usually fall into three categories: a design defect, a manufacturing defect, or a failure to warn through labeling and instructions for use.

The policy trigger matters more in this line than most. Device claims tend to surface long after the sale, so whether the program is written on an occurrence or claims-made basis determines which policy answers. On a claims-made program, the retroactive date and the tail arrangement carry as much weight as the limit.

Failure to warn is the most common allegation, and it turns on documents rather than hardware. Labeling, instructions for use, and training materials become the evidence. A device that performed as designed can still generate a claim if the warnings did not match the way clinicians actually used it.

The second exposure is allocation. Contract manufacturers, component suppliers, and distributors all sit in the chain, and the contracts between them decide who carries the risk. A manufacturer that has not secured indemnity and additional insured status can end up funding a claim that originated with a supplier.

Coverage written for a pre-revenue company rarely fits one that is shipping. Limits should reflect device class, the degree of patient contact, and the number of units in the field, because those factors drive both how often claims arrive and how severe they are.

Customer contracts drive the rest. Hospital agreements and distribution agreements specify minimum limits, additional insured status, and certificate requirements. Reading those terms before signing is the difference between a program that satisfies the contract and one that has to be rebuilt under deadline.