Sufficient Financial Coverage, Mandatory for Manufacturers

Natural or legal persons may claim compensation for damages caused by a defective device.
The manufacturer is required to compensate for damages caused by the defective product to natural persons (death or personal injury) and private property (goods for private use).

For this reason, among the general obligations of medical device manufacturers set out in Article 10 of the MDR, it states:

In a manner that is proportionate to the risk class, type of device and the size of the enterprise, manufacturers shall have measures in place to provide sufficient financial coverage in relation to their potential liability under Directive 85/374/EEC, without prejudice to more protective measures under national law.

Consequently, notified bodies will be required to verify that manufacturers:

• Have established a numerical value for the concept of “sufficient”, considering the indicated parameters (risk class, type of device, size of the enterprise) and the economic liability for damage from defective products;
• Have the necessary financial coverage.

Civil Liability Insurance Policy

Although Directive 85/374/EEC allows Member States to set a minimum ceiling for serial claims of 70 million euros, most Member States have not taken advantage of this option.

Given the extreme variability in legislation and the evident difficulty in defining what constitutes “sufficient financial coverage”, it is reasonable to think that the way to meet the requirement is to take out an insurance policy for compensation for damages from defective devices.

In addition to the parameters indicated by the regulation (risk class, type of device, size of the enterprise), the choice of policy can be supported, during management review, by evaluating:

• Sales volumes and countries involved;
• Post-market surveillance results;
• The manufacturer’s ability to manage vigilance by intervening in a timely manner with field corrective actions.

How to Deal with the Notified Body

Although, with Sistemir’s support, it is possible to justify the choice of policy, the fundamental involvement and opinion of a competent law firm in this matter is undoubtedly necessary.

However, it remains clear, as will happen with many topics and as happened in the past with Directive 93/42/EEC, that the measures accepted to provide sufficient financial coverage will be consolidated over time and through common practice.

In the meantime, during audits, it will be sufficient to demonstrate to the notified body the due awareness and the initiation of reasoning in this regard.