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Mapping the real risks life science businesses face, from supply chains to cyber and compliance.
Published on 27 February, 2026
For many brokers, the life science sector can feel like a high-stakes maze of white coats, lab tech, and niche cover requirements. But behind the scientific complexity lies a more familiar challenge; identifying where exposures emerge, how they lead to loss, and what good protection looks like. Life science is a diverse sector including everything from pharmaceuticals to cosmetics, but it is fundamentally based on the study of living organisms.
Read our article, ‘Life science decoded’ for everything brokers need to know about life science
And, like all living things, life science businesses have a kind of DNA; a blueprint containing the operational, regulatory, and technological markers that determine how and where risk exposures emerge.
In this article, we look at the sector through a broker’s lens, spotlighting seven risks that emerged in our survey of life science businesses – to help brokers spot red flags earlier, ask sharper questions, and place risks more confidently with specialist insurers.
1. Supply chain vulnerabilities: The sector's Achilles heel
In our recent research, 58% of life science businesses said a supply chain disruption would cause major or devastating impact – more than any other risk. Many rely on single suppliers, niche components, or ultra-specific conditions like temperature-controlled transit. A shipment delayed at customs or a contaminated ingredient can shut down production, delay trials, or derail regulatory milestones. Our research shows two thirds of life science businesses consider Business Interruption cover mandatory, reflecting how financially damaging even minor disruptions can be.
A quarter also consider marine cargo/transit cover mandatory, while businesses with complex supply chains will also require product withdrawal and recall cover, as defective components or contamination can quickly cause regulatory intervention or customer harm.
So, don’t treat business interruption or recall as add-ons – ask about sole suppliers, shipping dependencies, and lab throughput to gauge exposure.
2. Cyber threats and data dependency
Half of the businesses we surveyed said a cyber event would cause severe disruption. As life science businesses are especially data-driven, cybercrime exposures multiply, including the use of cloud-based diagnostics platforms, connected lab automation, and proprietary R&D and clinical trial data.
The crossover between cyber, professional indemnity and public liability is particularly acute when patient outcomes or device safety hinge on software integrity. This means looking beyond standalone cyber policies.
Ask clients how digital tools, data storage, and intellectual property factor into daily operations.
3. Cashflow pressure and economic uncertainty
Half of surveyed businesses expect lack of investment to hit hard. With many life science businesses turning over less than £5 million*, long development cycles and fixed costs leave little room for error. Even a minor uninsured loss can derail progress or delay launches.
Unsurprisingly, this translates into high demand for product liability, professional indemnity, and recall cover, which two thirds say is mandatory, and makes business interruption cover crucial as a financial stabiliser.
It means insurance functions as a risk transfer and as business continuity support, and it also raises the opportunity to spotlight the role of accurate business interruption cover in smoothing investment milestones.
4. Regulatory change and compliance drag
Two in five cite evolving regulation as a major concern, with life science businesses having to navigate multiple regimes, from the Medicines and Healthcare products Regulatory Agency and UK Conformity Assessed to US Food and Drug Administration and European Union frameworks – often simultaneously.
Compliance burden means increased traceability, documentation, and product classification risk, and missteps can quickly turn into personal injury or public liability claims.
That makes it important for brokers to drill into businesses’ regulatory obligations at the quote stage, and become familiar with areas where wording clarity matters, especially around documentation and labelling.
5. Innovation, AI, and emerging technologies
The sector is rapidly shifting into digital health, software as a medical device, wearables and real-time health monitoring, with many businesses now operating as hybrid health tech businesses.
This blurs the boundaries between professional indemnity, public liability, and cyber, and brokers have voiced real difficulty placing these hybrid risks with generalist insurers.
That’s why they’re seeking to partner with specialist insurers that can underwrite multi-class exposures and understand software-led health outcomes.
6. Skills gaps and outsourcing
Life science businesses are far from unique in facing talent shortages, with challenges filling roles from regulatory experts to lab technicians. Often their solution is to outsource, but this increases exposure to potentially problematic issues including inconsistent documentation, lapses in quality management, and poor traceability.
Professional indemnity and public liability exposures increase when capability gaps exist, while delays due to labour issues may also trigger business interruption claims.
This emphasises the importance of understanding businesses’ reliance on third parties and how quality is controlled, and brokers should consider how this shapes the overall resilience picture.
7. Rising operational costs
With the high cost of materials, labour, and energy, the implications of getting it wrong can be very significant. This makes the accuracy of sums insured, responsive business interruption, and recall cover more than nice-to-haves.
So, thoroughly sense check declared values and cost assumptions as rising input costs mean old figures may underinsure clients.
Final thoughts: build confidence and deepen client conversations
The life science sector might be highly specialised, but the core exposures are grounded in operational realities.
For brokers, this means learning to map exposures through supply chains, software, staffing and compliance, and positioning specialist insurance as fundamental to business resilience.
These seven risks can act as a framework for brokers’ client conversations, supporting stronger advice and better outcomes for clients and brokers alike.
Designed around life science risk
Understanding a life science business’s “risk DNA” is the first step. Placing it with a specialist life science insurer is the next. A proposition built specifically for the sector enables brokers to respond confidently to complex, multi-class exposures and support long-term client resilience.
