Product liability insurance for medical devices (MDR)

The medical device industry is strictly regulated and subject to high product liability and safety requirements. For manufacturers and suppliers, this means complex legal requirements that require careful compliance. We would like to give you an overview of the key regulations and requirements - from development and approval to monitoring and liability in the market.

Regulatory requirements and liability for medical devices

The European Medical Device Regulation ( MDR , EU 2017/745)leaves it up to the member states to introduce specific liability provisions. In Germany, the Medical Devices Implementation Act (MPDG) regulates this topic, but does not require product liability insurance. However, we strongly recommend that youtake out this cover voluntarily. Comprehensive insurance cover is a decisive factor for the safety and future of your company.

Liability and insurance cover for medical devices

It is crucial for companies in the medical device industry to have insurance cover that covers their specific risks covered. Under the MDR in particular, distributors and importers assume the liability obligations of manufacturers under certain conditions - for example, if they sell products on the market under their own brand name. These extended liability obligations highlight the importance of comprehensive insurance cover for all economic operators in the supply chain.

Why is special insurance needed for medical devices?
Although the MPDG in Germany no obligation for product liability insurance product liability insurance in Germany, many companies voluntarily to protect themselves against liability claims. Medical devices, from simple consumables such as cannulas to complex implantable pacemakers, require a risk-based classification due to their different risk classes in order to ensure suitable insurance cover. Tailor-made insurance cover can secure the existence of companies in the medical device industry, as the potential liability risks can have enormous financial consequences.

Our solution: Tailor-made product liability insurance for medical devices

We offer medical device liability insurance that is tailored to the specific requirements and risks of your products. Our services include:

Detailed risk assessment and advice: We analyze your products and support you with the risk classification in order to find the optimal insurance solution for your needs.
Insurance solutions for all product categories: We offer flexible and tailor-made insurance solutions for all medical device classes.
Regular review and adjustment: As legal requirements and market demands are constantly evolving, we regularly review your insurance cover and adjust it if necessary to ensure that you always have comprehensive cover.

Whether simple consumables or high-tech implants - we provide the right cover and support you in meeting the regulatory requirements of the MDR and the MPDG.

Let us work together to ensure that your products and your company are optimally covered.

"When it comes to product liability insurance for medical devices, it's not just the choice of the right sum insured that counts - the quality of the terms and conditions is crucial. Only clear and comprehensive regulations guarantee optimum protection in an emergency. With our specially developed insurance conditions, we offer our clients market-leading protection."
Florian Eckstein - Managing Partner Atrialis GmbH

Important questions about product liability insurance for medical devices with ATRIALIS
- compactly summarized:

1 What does product liability insurance cover?
Product liability insurance for medical devices protects companies against the financial consequences that can arise from claims for compensation if a product causes damage. This damage can include both personal injury and property damage caused by defective medical devices. This includes
Personal injury: If a medical device causes, for example, physical injury or damage to the health of the end user.
Material damage: When a product causes material damage, for example due to the failure of a medical device that damages expensive medical equipment or affects the entire healthcare system.
Consequential damage: This also includes indirect damage, such as costs due to recalls.
Costs of legal defense: If you are taken to court, the insurance will also cover the costs of your legal defense, which can be very expensive.
➔ Essentially, product liability insurance covers all financial consequences resulting from the use of a defective product. It is not only important for manufacturers, but also for importers, dealers and distributors if they sell products under their own brand name.

2 Who is liable for medical devices?
In the case of medical devices, the manufacturer who places the product on the market is primarily liable. This includes all companies that develop, manufacture and place medical devices on the market. However, other parties involved can also be held liable in certain cases:
Importer: If the manufacturer is based outside the EU, the importer is liable for the products imported into the EU.
Dealers: If a dealer sells or modifies a medical device under his own brand name, he can also be held liable. This also applies to distributors who sell products without the required CE marking.
Distributor: A distributor is liable if it influences the safety of a product, for example through incorrect storage or improper handling.
It is important to understand that liability under the Product Liability Act (ProdHaftG) also applies if the manufacturer has not fulfilled its duty of care during development or quality control. This can lead to considerable claims for damages, which can only be covered by adequate insurance.

3. what does product liability insurance cost? The cost of product liability insurance can vary greatly and depends on several factors, in particular the risk of the product, the size of turnover and the choice of sum insured. For low risks and before commercialization in the broad market, premiums for smaller companies can start from 850 to 1,100 euros per year. For companies that manufacture medical devices or already sell them commercially, the costs increase rapidly depending on turnover on 2,500 euros per year or even more. The decisive factors that influence the premium include:
Risk class of the product: Higher risk classes (e.g. class III medical devices such as implants) lead to an imputed higher loss potential and are reflected in the premium determination.
Turnover and distribution: Risks and premiums increase to the same extent when turnover increases or the scope of distribution increases (e.g. international distribution).
Previous claims: If a company has already been confronted with product liability claims in the past, this can also influence the insurance premium.
Deductible: Some insurers offer more favorable rates if companies are willing to pay a higher deductible.
In order to obtain a precise assessment of your insurance needs and realistic premium estimates, you should have your products and specific risk factors evaluated by a specialized insurance broker or provider. Please do not hesitate to contact us!

Regulatory basis for medical devices - at a glance

The medical device industry is subject to a constantly growing body of regulations, which are constantly being adapted by provisions and requirements. We would like to introduce you to the most important changes and developments that may affect your work as a manufacturer, distributor or importer. As part of the implementation of the EU Medical Device Regulation (MDR), numerous new requirements for product safety, labeling and documentation have been introduced. These include the introduction of Unique Device Identification (UDI), new regulations on technical documentation and the responsibilities of companies and notified bodies. In the following section, we would like to explain these complex regulations in more detail so that you can introduce your products to the market in a legally compliant and efficient manner.

According to a survey conducted by the DIHK and SPECTARIS, almost 80% of medical technology companies see considerable difficulties in launching products on the market due to the EU Medical Device Regulation (MDR).

The Medical Devices EU Adaptation Act (MPDG)

The MPDG, previously MPEUAnpG, serves as a national law in Germany for the implementation of the MDR and defines further requirements and powers. It enables the German authorities to prohibit or restrict the placing on the market and putting into service of medical devices in the event of risks. In particular, the Federal Institute for Drugs and Medical Devices (BfArM) and the Paul Ehrlich Institute (PEI) play a key role here and can order withdrawals and recalls. The MPDG contains increased penalties and extends the responsibilities of the authorities, particularly in the case of clinical trials and performance evaluations. This also affects the requirements for safety officers and medical device consultants, whose tasks are defined in detail in the MPDG.

Responsible institutions and terms in the MDR

The Federal Institute for Drugs and Medical Devices (BfArM) is responsible for clinical trials of medical devices and performance evaluation tests, except for high-risk in vitro diagnostics, which are the responsibility of the Paul Ehrlich Institute (PEI). Both institutes also decide on the classification of medical devices and the differentiation from other products. The regulation provides for a more precise classification, especially for medical devices containing substances, and has defined the general obligations of distributors and manufacturers as well as the responsibilities of notified bodies. The aim of these regulations is to increase confidence in medical devices and ensure that they are safe and effective for their intended use.

Definition of medical devices
The MDR defines medical devices as follows "Medical devices are products with a medical purpose that are intended by the manufacturer for diagnosis, therapy or monitoring." A distinction is made between tangible and material medical devices.

Assessment of the conformity of medical devices

In Europe, medical devices are generally placed on the market under the manufacturer's own responsibility. The manufacturer is obliged to carry out a conformity assessment procedure for the products. To carry out the conformity assessment, medical devices must be assigned to a corresponding risk class in accordance with the MDR . This classification is based on the intended purpose of the device and the associated potential risks for patients, users and third parties. The MDR distinguishes between four risk classes (Class I, IIa, IIb and III). The conformity assessment requirements vary depending on the risk class, with higher risk classes entailing stricter testing and verification obligations. For many products, the involvement of a notified body is mandatory, which checks compliance with the regulations and issues a certificate of conformity if necessary. The Federal Institute for Drugs and Medical Devices (BfArM) does not keep a list of the classification of medical devices placed on the market in Europe. Blanket decisions on entire product groups are also not possible, as the risk classification is always based on the individual intended purpose of the product and the specific information provided by the manufacturer. An essential part of the conformity assessment is the preparation of the technical documentation, which includes detailed information about the product, its manufacture, the risk management processes and the clinical evaluation. In addition, manufacturers must ensure that their quality management system meets the requirements of the MDR, e.g. through ISO 13485 certification. Another key element for the conformity assessment is the CE marking. This is affixed to the product or its (sterile) packaging and indicates that the product meets the essential safety and performance requirements of the MDR and may be placed on the European market. It must also appear in the instructions for use and on the retail packaging. There are precise specifications regarding the size and proportion of the CE marking, which are set out in the relevant standards. ➔ If these requirements are met, the medical device is considered "MDR-compliant".

Excursus: Insurance for medical technology

The development and use of medical technology brings immense progress for healthcare, but also entails risks - whether due to technical defects, application errors or regulatory requirements. Companies in the medical technology sector are therefore faced with the challenge of insuring themselves against a wide range of risks. As insurance cover can vary greatly depending on the type of product, market region and regulatory requirements, tailor-made solutions are crucial. We will be happy to advise you on individual insurance solutions for your medical device!

Important terms and categories for medical devices in the MDR

Would you like to find out more about medical devices and the associated terms? Click on a term to find out what it means!

Medical purpose (Art. 2 No. 1 MDR)

The medical purpose of a product describes the medical purpose for which a product is developed and intended. It is about the medical function the product is intended to fulfill. This includes, among other things:

Detection of diseases or health problems (e.g. using diagnostic devices),
Monitoring of medical parameters or disease progression (e.g. using measuring devices),
Treatment of illnesses or injuries (e.g. surgical instruments),
Alleviation of symptoms (e.g. pain therapy devices) or
Compensation for disabilities or functional disorders (e.g. prostheses)

The intended purpose therefore describes the areas (e.g. diagnostics or therapy) and the objectives (e.g. healing, support or prevention) for which the product is used.

Mechanism of action (Art. 2 No. 1 MDR)

The mechanism of action of a medical device describes the way in which the device works. The MDR specifically points out that the mechanism of action not based on pharmacological, immunological or metabolic effects. This means that the product does not work by taking medication or by influencing bodily functions such as the immune system or metabolism. Instead, it works via physical or chemical processes.

For example, a pacemaker uses physical effects to stimulate the heart, but it does not directly influence the metabolism or the immune system.

Accessories

Accessories are products that are not medical devices themselves, but have been specially developed by the manufacturer to be used together with one or more medical devices. The accessory supports the use of the main product and helps to optimize the medical function of the product. It is therefore not a medical product in its own right, but rather a supplement to make the main product functional or to increase its efficiency.

The accessories can be used to ensure the intended purpose of the medical device, to adapt it for special applications, to facilitate handling, to increase performance or to combine the functions of the product with those of other devices.

For example, a tube that is integrated into a medical device such as a ventilator is an accessory. Without the tube, the device would not function as intended.

Active products

"Active devices" are medical devices whose operation requires an external energy source. This energy source cannot be human physical strength or gravity. These devices generate an active function that is necessary for the medical purpose of the device. Example:

Electrical devices such as pacemakers or infusion pumps require a battery or a power connection in order to function properly.
Software can also be an active product if it supports a medical function (e.g. software for analyzing X-ray images).

Systems and treatment units

"Systems and treatment units" consist of a combination of medical devices that are used together to fulfill a specific medical purpose. These products work together to support a complex medical function.

For example, a surgical system could consist of multiple instruments, such as a surgical robot, cameras and other supporting devices that work together to perform an operation.

Such systems and treatment units can comprise several products that are connected or integrated in a certain way to ensure successful treatment.

Intended use

The "intended purpose" of a product refers to the use that the manufacturer has intended for the product. This is defined on the labeling of the product and in the instructions for use as well as in advertising or sales information. It describes what the product is intended to do and how it is used, for example:

The purpose of a long-term ECG is to "investigate cardiac arrhythmias or cardiovascular risks".
The purpose of a thermometer is to measure body temperature.

The intended purpose therefore specifies the medical context in which the product is to be used and the purpose of its use.

Determination of status (Art. 4 MDR)

Within the framework of the MDR, there are defined procedures to clarify how a product should be classified and treated. The status of a product is determined by the European Commission. It decides whether a product is a medical device and what status it has.

Status determination can be initiated in the following ways:
- At the request of a Member State: A Member State can request a review from the Commission if there is a good reason to do so (e.g. ambiguities about the classification of the device).
- On the Commission's own initiative:The Commission can also initiate a review on its own initiative if it considers that this is necessary (e.g. for new devices or technologies).
- After consulting the Medical Device Coordination Group: Before the Commission takes a final decision, it will consult a group of experts (Coordination Group), which will advise it.

These steps serve to guarantee legal certainty and ensure that products are correctly classified, which in turn guarantees the safety and protection of the health of EU citizens.