Risk Partners Life Sciences Roundtable 2025, thank you very much! 

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.
 

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 Süddeutsche Zeitung : https://www.sueddeutsche.de/wissen/karolinska-panne-forschung-kuehlung-1.6345128

Also read our other blog posts
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
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
Being Public

Digital and effective prevention of directors' and officers' liability by Risk Partners & Fides Technology

Innovation by Risk Partners & Fides Technology Now on Vimeo and Soundcloud: get practical tips from experts with high relevance for avoiding liability for business managers. Question unanswered? Content: Personal liability is a constant sword of Damocles hovering over managing directors in everyday life. The standard of care is strict and directors bear the burden of proof. In collaboration with the distinguished corporate lawyer Eva Homborg (Esche Schümann Commichau) and the governance expert Philippa Peters (Fides Technology GmbH), we have spent months compiling practical measures on how you can avoid this burden of proof.

Read more "
January 12, 2024
Venture Capital

We provide information on liability risks for VC funds in the VC Magazine

In December, we were asked by VC-Magazin whether we could provide insights into liability and risk management issues relating to venture capital funds. With pleasure! Together with the team, Florian not only provided insights into current challenges, but also suggested practical solutions to effectively minimize and sensibly transfer the risks of a VC fund. In the VC Magazine article, you will therefore find: added value of customized insurance concepts for VC funds (focus: D&O/E&O insurance #Moonshot Protect), key measures for risk prevention (learning curve from our claims world), indemnifying contractual provisions as a preventive measure, and

Read more "
January 26, 2024
Being Public

Public prosecutor's office investigates: Suspicion of deception in short-time work (Sono Motors)

No startup bonus for criminal and administrative offenses. The incident and possible insurance cover. As exclusively researched by Hannah Schwär and her team at Capital Magazin, the founders of Sono Motors are now also facing problems with the public prosecutor's office. According to Capital Magazin, subsidy fraud in the context of short-time work and the programs surrounding the corona crisis is in the offing. The company, which is listed on the NASDAQ via De-SPAC, has already filed a report with the SEC. While the loss amount of EUR 40,000 is still being

Read more "
March 19, 2024
Being Public

Earnings Call: one 0 too many - the Lyft CEO mistake

"Look, it was a bad mistake, and that's on me," CEO of LYFT Inc. The incident and possible insurance coverage. You may have also heard about the recent incident with LYFT. In the quarterly earnings report, LYFT originally stated that profit margins were up 500 basis points before correcting this to 50 basis points during the conference call. This clerical error caused the stock price to rise more than 60% in after-hours trading. This situation is exactly what investor relations teams that

Read more "
February 17, 2024