Management Consulting

In the medical sector, companies are increasingly facing stringent oversight and regulatory scrutiny, particularly as they expand internationally. This heightened scrutiny necessitates compliance with a myriad of local laws and regulations, and any violations can lead to severe financial repercussions or even existential threats to the business. For instance, if a company is mandated to implement measures to ensure product efficacy, failure to comply could result in a production shutdown ordered by regulatory authorities. Traditional business interruption insurance typically does not cover risks unless there is a preceding insured peril, such as fire, leading to potential gaps in coverage. To address these niche challenges, Aon developed a comprehensive insurance solution tailored specifically for the medical industry. This solution encompasses coverage for lost earnings due to regulatory-induced business interruptions, ongoing operational costs during such interruptions, and expenses incurred to prevent these interruptions, such as sanitation and cleaning efforts, tool preparation, and modifications to operational processes. Additionally, it includes coverage for asset-related damages arising from business disruptions or shutdowns, which could result in claims from partners or suppliers. The implementation of Aon's insurance concept not only mitigates the financial risks associated with regulatory compliance but also supports companies in maintaining operational continuity amidst increasing regulatory demands, particularly in light of the EU Medical Device Regulation that has intensified requirements since 2020.