Risk Partners Life Sciences Roundtable 2024, thank you very much! Sign up now for the 26.06.2025 >

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

Revolution in D&O insurance in Nevada (US insurance market) postponed

The revolution in D&O insurance in Nevada has been called off after all. In the US market, the state of Nevada passed an interesting law (Bill No. 398) in the summer with potentially significant implications for the D&O insurance market. The Governor of Nevada approved the bill on June 3, 2023, so the law came into force on October 1, 2023. We had classified this legislation (in the USA, insurance supervision is organized at state level) as too watchful for our clients, but this law

Read more "
December 9, 2023
Cyber Security

"Digital Operational Resilience Act" (DORA regulation) from the perspective of venture capital and private equity funds

DORA regulation applies from January 2025. Significance for our private equity and venture capital clients The somewhat unwieldy name "Digital Operational Resilience Act" (DORA for short) has a very serious background and is fundamentally to be welcomed. After all, when we evaluate our claims in the context of cybercrime, PE and VC funds and their KVGs are those with the highest frequency of claims. It can be safely assumed that they are a "worthwhile target group" for cyber criminals based abroad.

Read more "
December 27, 2024
Life Sciences

Finance Day 2024

Growth capital for biotechnology and life sciences - Finance Day 2024 A few days ago, Jutta and Florian from our team attended Finance Day 2024 at the analytica trade fair in Munich. The event once again offered exciting expert panels on current financing and capital market issues for life sciences companies. As the panels focused on three of our key consulting areas, namely life sciences, venture capital and IPOs, attending was of course a must for us as a specialist insurance broker. Our team was also very pleased to meet many of our partners and clients again.

Read more "
April 19, 2024
Being Public

Risk Partners supports successful uplisting of Formycon AG to the Prime Standard

Congratulations to Formycon AG on its successful uplisting to the Prime Standard of Deutsche Börse on November 12, 2024! Welcome to the Prime Standard league: A new champion of life sciences and biosimilars has successfully made the step from the Scale segment. We proudly congratulate Enno Spillner, Dr. Caroline Redeker, Daniel Marquard and the entire Formycon AG team on this great success and another important milestone on their way to becoming a global champion in the field of biosimilars! Formycon AG has focused on

Read more "
November 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
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