Risk Partners Life Sciences Roundtable 2024 on 18.07.24. Thank you very much! Register now for 2025 now >
Contact us

Research breakdown at Stockholm's Karolinska Institute: A cooling failure destroys cell cultures from decades of research - can you insure against it?

An incident that threatens the existence of the company, but which we would like to shed some light on from the perspective of an insurance broker specializing in life sciences.

What happened? A cooling system at the Karolinska Institute in Stockholm, Sweden's most important medical research center, failed for five days. Biological material that had been collected over 30 years and, according to the institute, was unique in the world, was destroyed as a result.

The material was stored in deep-freeze tanks in which the temperature was to be kept constant at -190 degrees. As has only now become known, the automatic nitrogen supply that makes the extremely low temperatures possible was suspended over the Christmas holidays. When a doctoral student carried out his inspection tour at the research center on 27 December, he noticed that cooling had been suspended in 16 tanks for a long period of time and that one of the thermometers was already reading 22 degrees.

In the mishap, commercial cell lines for drug studies and disease research were destroyed, some of which had been processed or genetically modified in the laboratory over decades. In addition, "primary biobank material" was destroyed, mostly serial samples that had been taken from chronic patients over a long period of time in order to understand the reasons for the progression of their disease. The institute estimates the damage caused at around half a billion crowns (around 45 million euros). Even worse, however, is the fact that years of research projects and thus the foundations for important research projects have been lost.

Insurability in Risk Partners life sciences property insurance: In addition to insuring laboratory technology, life sciences companies should therefore also consider insuring existing cell cultures, cell / bacterial strains and their own active ingredient bases and research results in their insurance concepts. The Risk Partners cover concepts assume the full reconstruction costs in the event of damage and, in the event of failure or interruption of refrigeration facilities, also the damage from the resulting spoilage of the stored materials, cell cultures, sample material and active pharmaceutical ingredients.

In addition to the asset values, our business insurance also covers the costs of restoring valuable original documents, business records, e.g. also study documents - laboratory diaries etc., e.g. as a result of fire or water damage (due to failed cooling units) in the laboratory.

On the causes and insurability:

It will probably be difficult to find the person or persons responsible. The professor and senior physician at the Karolinska Institute wrote in a press release that various research teams were involved in the supervision and maintenance of the tanks, as were outsourced companies. The damage was also reported to the police.

Sabotage from outside cannot be ruled out at present. Interestingly, there were indeed large-scale hacker attacks on around a hundred Swedish authorities and companies in mid-January. However, the outage at the Karolinska Institute began on December 22.

  • There is currently nothing to suggest that external influence was exerted, but in such a case, crime or fidelity insurance would have applied for "intentional tortious acts that obligate the company to pay compensation in accordance with statutory provisions".
  • In the event of a hacker attack, cyber insurancealso offers appropriate protection against the resulting costs.


At present, however, the cause of the error is thought to lie in inadequate internal responsibility structures. For example, there was apparently no functioning on-call service that regularly monitored the cold storage rooms. There have also been problems with monitoring the cooling system in the past, but these have not been rectified.

  • An alleged or actual organizational failure / fault can therefore also quickly become the personal responsibility of the management and thus a case for D&O insurance. This is because the management is obliged to set up the organization adequately in order to avert or minimize (avoidable) risks. If this has not been done ("organizational failure / fault") and damage has materialized, as in this case, the unlimited joint and several liability of the management begins with slight negligence.
ย 

With this in mind, "stay cool" and leave the cooling systems on or insure them properly!

We were also able to publish this article with our partner Going Public: https://www.goingpublic.de/life-sciences/forschungspanne-kann-man-sich-dagegen-versichern/
You can read the original report again in the Sรผddeutsche Zeitung : https://www.sueddeutsche.de/wissen/karolinska-panne-forschung-kuehlung-1.6345128

Also read our other blog posts

Being Public

Global Integrity and Compliance Forum 2024ย 

๐—š๐—น๐—ผ๐—ฏ๐—ฎ๐—น ๐—œ๐—ป๐˜๐—ฒ๐—ด๐—ฟ๐—ถ๐˜๐˜† ๐—ฎ๐—ป๐—ฑ ๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ ๐—™๐—ผ๐—ฟ๐˜‚๐—บ ๐Ÿฎ๐Ÿฌ๐Ÿฎ๐Ÿฎ๐Ÿฐ "D&O and Co. - Plan B to cover personal liability!" Last Friday, Florian had the honor of taking part in the Global Integrity and Compliance Forum at the Ludwig-Maximilians-Universitรคt in Munich. Under the motto "The RULE of LAW in the Era of Integrity & Compliance", international legal experts, company managers, in-house councils and compliance officers from all over the world gathered to discuss the future of good corporate governance in 2024. Key discussions and insights One of the

Read more "
June 14, 2024
Being Public

New SEC Ruling: Transatlantic convergence in dealing with cyber security incidents

Foreign Filers / Private Issuers watch out! 2023 brought further harmonization of European and US standards for cyber incident reporting. According to the SEC Ruling, all companies listed on the US stock exchange are now required to publicly report significant data security incidents to the SEC within four working days. In addition, they must outline in their annual report (10-K) their procedures for identifying and addressing material cybersecurity risks, including the role of the board of directors. Note: This rule also applies to foreign private issuers (e.g., German companies that issue a

Read more "
January 17, 2024
Management

Research breakdown at Stockholm's Karolinska Institute: A cooling failure destroys cell cultures from decades of research

Research mishap at Stockholm's Karolinska Institute: A cooling failure destroys cell cultures from decades of research - can you insure against it? An incident that threatens your very existence, but which we would like to shed some light on from the perspective of an insurance broker specializing in life sciences. What happened? A cooling system at the Karolinska Institute in Stockholm, Sweden's most important medical research center, failed for five days. Biological material that had been collected over 30 years and, according to the institute, was unique in the world, was destroyed as a result. The material was stored in deep-freeze tanks in which the temperature

Read more "
June 7, 2024
Life Sciences

Finance Day 2023

Growth capital for biotechnology: Yesterday, today, tomorrow! A few days ago, Jutta Zaglauer and Florian Eckstein from our team attended the Finance Day 2023 on the occasion of the 25th anniversary of biotechnology at the IZB - Innovation and Startup Center for Biotechnology. The event offered an exciting exchange and insights into current financing and capital market issues of biotechnology companies. As an experienced specialist insurance broker for the areas of life sciences, venture capital and IPOs, all three cornerstones of our "magic expertise triangle" were part of the exciting agenda. It was also interesting to discuss the importance of customized

Read more "
November 6, 2023
Life Sciences

St. Gallen study: USD 6 billion per drug

HSG St. Gallen: Drug costs USD 6.16 billion on average. Are the days of new drugs costing less than USD 1 billion over? There were figures in the industry that spoke of USD 700-1,000 million as the cost of developing a new drug. A study by the University of St. Gallen covering the period 2001-2020 found that the cost of developing new drugs has risen dramatically. It was estimated that the cost of developing a new drug now stands at

Read more "
September 26, 2023
Management

OLG Schleswig โ€“ Statute of Limitations for Liability Claims in the Case of Direct Claims in D&O Insurance

OLG Schleswig: Statute of limitations for liability claims in the case of direct claims in D&O insurance. There is a new, exciting verdict from the world of D&O insurance. Recently, we reported on the decision of the Higher Regional Court of Cologne in the context of the direct lawsuit. Now the Higher Regional Court of Schleswig has also made a groundbreaking decision. What was it about? The focus was on the question of the statute of limitations. However, it must be taken into account that the question of the statute of limitations in the event of a D&O claim is not trivial. On the one hand, there is the original claim for damages (statutory D&O liability

Read more "
April 24, 2024