India's New Drugs and Clinical Trials Rules 2019 (NDCTR) place strict no-fault liability on the sponsor for any injury or death occurring during a clinical trial — regardless of whether negligence is proved. Clinical Trial No-Fault Compensation Insurance covers this mandatory sponsor obligation, indemnifies investigators and trial sites, and satisfies the Ethics Committee and CDSCO documentation requirements for trial approval in India.
Clinical Research Insurance · Sponsor Liability · NDCTR 2019 · CDSCO · Ethics Committee · No-Fault Compensation
Clinical Trial No-Fault Compensation Insurance is a specialist liability insurance that covers the sponsor's mandatory obligation under Indian law to compensate trial participants (or their families) for injury or death that occurs during a clinical trial — without requiring the participant to prove negligence or fault. Under the New Drugs and Clinical Trials Rules 2019 (NDCTR), the burden of proof is reversed: the sponsor must provide compensation for any trial-related injury or death, regardless of whether the injury was caused by the investigational product, a trial procedure, or any other covered cause. This "no-fault" principle is the defining feature of India's clinical trial compensation framework and makes it fundamentally different from standard liability insurance.
Compensation is provided without requiring the trial participant to prove that the injury was caused by the sponsor's negligence. The burden shifts to the sponsor — covering injury from trial drugs, procedures, concomitant medications necessitated by the protocol, and other specified causes.
NO-FAULTPolicy wording and coverage designed to meet all requirements of the New Drugs and Clinical Trials Rules 2019 (NDCTR) and the CDSCO compensation framework — accepted by Ethics Committees and CDSCO as satisfying statutory insurance obligations.
NDCTR 2019Covers financial compensation for serious adverse events (SAEs), permanent disability, and death occurring during the trial that are classified as trial-related under the NDCTR compensation framework — regardless of whether the drug or device is ultimately found to be the cause.
SAE COVERCovers the legal liability of the principal investigator and the trial site/institution, protecting them from claims by trial participants. Ethics Committees specifically require that the insurance covers investigator and institutional liability before approving a trial.
INVESTIGATORCovers all medical expenses for the management of trial-related injuries — hospital charges, treatment costs, specialist consultations, and rehabilitation — for the duration of treatment, regardless of whether the injury ultimately qualifies for financial compensation.
MEDICAL CAREAvailable for both Indian pharma sponsors conducting domestic trials and global pharmaceutical/biotech/medical device companies conducting multi-country trials with India sites — aligned with ICH E6 (R2) GCP guidelines and CDSCO requirements.
GLOBALCoverage — Trial-Related Injuries, SAEs, Death & Investigator Indemnity
The policy covers the full scope of sponsor liability as defined by the NDCTR 2019 compensation framework — all categories of injury or death that are classified as trial-related, and the indemnity obligation to investigators and institutions.
Under Rule 122DAB (Schedule Y 2013 amendment) and the NDCTR 2019 framework, any injury or death occurring due to any of the following is classified as trial-related and must be compensated:
• Adverse effect of investigational product: Any adverse reaction — expected or unexpected — from the investigational drug, biologic, or medical device under study. This is the primary and most common category of trial-related injury. Both foreseeable and unforeseeable adverse effects are covered under the no-fault framework.
• Violation of approved protocol: Injury arising from deviation from the approved clinical trial protocol by the investigator or sponsor — including incorrect dosing, incorrect patient selection, or protocol violation in clinical procedures.
• Failure of investigational product to provide intended therapeutic effect: Where the participant suffers harm because the investigational product fails to provide the therapeutic protection that prompted enrolment (e.g., a vaccine trial where the participant contracts the disease the vaccine was intended to prevent).
• Adverse effect of concomitant medication: Adverse reaction from any medication that was required to be administered as part of the approved protocol (e.g., pre-medication, co-medication mandated by the protocol) — excluding adverse effects of standard care medications not mandated by the protocol.
• Injury to child in utero: Adverse effects on an unborn child (foetus) because of the parent’s participation in the clinical trial — covering teratogenic or foetotoxic effects of the investigational product.
• Any clinical trial procedure: Injury caused by a clinical procedure performed as part of the trial — e.g., additional blood draws beyond standard care, biopsy required by protocol, imaging procedures required by the protocol, or other invasive procedures mandated by the trial design.
The policy covers the management of all Serious Adverse Events (SAEs) arising during the trial — regardless of causality classification at the time of the event:
What qualifies as an SAE (as per ICH E6R2 and NDCTR):
• Death of the trial participant
• Life-threatening adverse event
• Inpatient hospitalisation or prolongation of existing hospitalisation
• Persistent or significant disability/incapacity
• Congenital anomaly/birth defect in the offspring of a trial participant
• Important medical event that may jeopardise the patient or require intervention to prevent the above outcomes
Medical expense coverage:
The policy covers all medical expenses incurred for the investigation, diagnosis, treatment, and management of SAEs — including:
• Emergency hospitalisation and ICU charges
• Surgical procedures required for SAE management
• Specialist consultations (cardiologist, neurologist, intensivist)
• Diagnostic investigations (laboratory, radiology, pathology)
• Rehabilitation and physiotherapy after discharge
• Follow-up medical care until the SAE resolves or stabilises
Causality and the responsibility to manage:
The sponsor’s responsibility to provide medical care attaches immediately when an SAE occurs — even before causality is determined. The investigator must provide or arrange immediate medical management. The clinical trial insurance covers these costs regardless of whether the SAE is ultimately classified as trial-related.
The policy provides indemnity to the principal investigator (PI), co-investigators, and the trial site/institution against legal claims made by trial participants or their families arising from the conduct of the clinical trial.
What investigator indemnity covers:
• Legal costs and expenses for defending the investigator against a trial participant’s claim
• Settlement amounts paid to resolve valid claims against the investigator
• Claims arising from protocol violations or procedural errors in the conduct of the trial
• Claims from participants who allege inadequate informed consent
Why Ethics Committees specifically check investigator indemnity:
Ethics Committees (Institutional Ethics Committees — IECs — and Independent Ethics Committees — IECs) are required by their CDSCO registration conditions to verify that the insurance policy covers both the sponsor’s liability AND the investigator’s liability. A policy that covers only the sponsor but not the investigator will be rejected by the Ethics Committee and the trial will not receive approval. This is one of the most common deficiencies found in clinical trial insurance documents reviewed by Ethics Committees.
Multi-site trials:
For multi-centre trials conducted at multiple investigational sites across India, the insurance must cover all participating sites and all principal investigators listed in the trial. Single-site coverage for a multi-site trial is inadequate.
The NDCTR framework includes a specific interim compensation provision that makes the timing of payment a critical feature of the insurance coverage:
Interim compensation:
When the Ethics Committee issues a notice regarding a trial-related death or serious injury, the sponsor must pay 60% of the calculated financial compensation within 15 days of receipt of the EC notice. This interim payment is non-recoverable — it is not offset against the final compensation even if subsequent investigation determines that causality was not established. The insurance policy must provide for this interim payment obligation.
Final financial compensation:
Following investigation by the Ethics Committee and/or the Apex Committee (under the Technical Expert Committee), the final compensation amount is calculated using the formula specified in Schedule I of the NDCTR (see the Compensation Formula section below). The insurance pays the balance of the final compensation after the interim payment.
Medical management (separate from financial compensation):
Financial compensation for injury or death is separate from (and in addition to) the sponsor’s obligation to provide free medical management for trial-related injuries. Both obligations are covered under the policy.
Liability limits:
The policy must state the per-participant liability limit and the aggregate limit for the entire trial. Ethics Committees verify that these limits are adequate for the nature and risk profile of the trial. Higher-risk trials (Phase I, oncology, rare disease) require higher limits than lower-risk Phase III trials in well-established drug classes.
Indian Regulatory Framework — NDCTR 2019, CDSCO & Ethics Committee Requirements
India's clinical trial insurance requirements evolved through a series of regulatory reforms culminating in the New Drugs and Clinical Trials Rules 2019. Understanding this regulatory framework is essential for sponsors, CROs, and investigators conducting trials in India.
The NDCTR 2019 is the primary regulatory instrument governing clinical trials in India, enacted under the Drugs and Cosmetics Act 1940. Key provisions for clinical trial insurance and compensation:
Chapter VI — Clinical Trial Related Injury/Death:
• The sponsor is required to provide free medical management to any trial participant suffering trial-related injury, for the duration of treatment
• Financial compensation for trial-related injury or death must be provided by the sponsor to the participant or their legal heir
• The sponsor may use insurance to fund these obligations; however, the statutory obligation remains with the sponsor regardless of whether insurance exists or pays
• The Ethics Committee is responsible for monitoring compensation and ensuring participants receive what they are due
Schedule I of NDCTR — Compensation Formula for Death:
The compensation for trial-related death is calculated using a formula based on:
B = (Age factor) × (Basal value) × Risk factor × Seriousness factor × Disease factor
Where the age factor and basal value reflect life expectancy adjustment; risk factor reflects the trial phase and risk level; seriousness factor reflects whether the death is trial-related; and disease factor reflects the underlying condition severity. This formula-driven compensation (distinct from tort-based compensation) ensures predictable, consistent compensation amounts.
CDSCO Form CT-3A:
The regulatory application form for clinical trial permission requires the sponsor to declare insurance details — insurer name, policy number, coverage amount, and validity period. CDSCO reviews these details as part of the trial application assessment.
Under CDSCO’s EC Registration Guidelines, every registered Ethics Committee must:
• Review the insurance policy submitted with each clinical trial protocol before granting approval
• Verify adequacy of the insurance document against specific criteria set by CDSCO
• Ensure coverage of Rule 122DAB causes — all 6 categories of trial-related injury must be covered
• Verify validity period — the insurance must be valid for the entire planned duration of the trial including follow-up
• Check territorial coverage — the policy must cover all countries where participants will be exposed to the investigational product (important for multinational trials)
• Confirm investigator indemnity — the insurance must specifically state that it covers the liability of the investigator and the trial site
• Review liability limits — per participant and aggregate limits must be stated and must be adequate for the trial risk profile
Consequences of inadequate insurance for the EC:
CDSCO may take action against an Ethics Committee (including suspension of EC registration) if the EC fails to adequately review insurance documents and a trial participant is harmed without adequate compensation provision. This regulatory pressure on Ethics Committees means they apply rigorous scrutiny to insurance documents — and any deficiency causes trial delay or rejection.
For global clinical trials with India sites (the majority of industry-sponsored trials in India), international requirements also apply:
ICH E6 (R2) — GCP Guidelines:
The International Council on Harmonisation’s Good Clinical Practice guidelines (E6 Revision 2) recommend that sponsors obtain insurance to cover the investigator and institution against claims from participants. While E6 R2 uses the word “recommend” rather than “mandate,” in practice all global pharmaceutical sponsors maintain clinical trial insurance as a standard practice for all investigational sites worldwide.
Clinical Trial Agreement (CTA) requirements:
The Clinical Trial Agreement between the sponsor and each investigational site must specify the insurance arrangements — including the insurer, policy number, coverage scope, and the sponsor’s obligation to maintain adequate insurance throughout the trial. Ethics Committees also review the CTA alongside the insurance document to ensure consistency.
Multi-country trials:
For a multi-country trial where the same protocol is being conducted in India and multiple other jurisdictions, the insurance policy may be a global policy (covering all trial sites worldwide under a single policy) or a local India-specific policy. Both approaches are acceptable to CDSCO and Indian Ethics Committees, provided the India-specific coverage requirements are clearly met.
CTRI registration:
Clinical Trials Registry — India (CTRI) mandates registration of all trials before first patient enrolment. While CTRI does not directly review insurance, CDSCO and Ethics Committees require CTRI registration as a condition of their approvals, making CTRI registration and insurance documentation part of the same trial startup compliance package.
How Compensation Is Calculated Under NDCTR 2019 Schedule I
The NDCTR provides a structured formula-based approach to compensation, making it more predictable than tort-based litigation. Understanding the formula helps sponsors set adequate insurance limits and helps investigators explain the compensation framework to trial participants.
Compensation for trial-related death is calculated as:
B = Age factor × Basal value × Risk factor × Seriousness factor × Disease factor
• Age factor: Based on the participant’s age at the time of death — higher for younger participants (reflecting longer expected working life) and lower for elderly participants
• Basal value: ₹8 lakh (base amount set by regulation, subject to periodic revision)
• Risk factor: Scale of 0.5 to 4.0 based on the risk level of the trial — Phase I first-in-human trials (higher risk factor 3.0–4.0) vs. Phase III comparative trials in standard drug classes (lower risk factor 0.5–1.0)
• Seriousness factor: Whether the death is directly attributable to the trial (1.0) or partially attributable (0.5) based on causality assessment
• Disease factor: Reflects the underlying disease severity — life-threatening disease (lower factor, reflecting shorter expected survival regardless of trial) vs. non-life-threatening condition (higher factor)
Worked example (illustrative):
35-year-old participant in a Phase II oncology trial dies from an SAE classified as possibly related to the investigational product.
Age factor (age 35) = 1.6 × Basal ₹8L × Risk factor 2.0 × Seriousness 1.0 × Disease factor 0.8
Compensation = ₹8L × 1.6 × 2.0 × 1.0 × 0.8 = ₹20.48 lakh
Interim payment (60%, within 15 days of EC notice) = ₹12.29 lakh
Insurance implication: The sum insured per participant must be set at a level that covers the maximum calculated compensation for the highest-risk participant profile (youngest participants in the highest-risk trial phase). Setting the per-participant limit too low creates an uninsured shortfall for the sponsor.
For non-fatal trial-related injury, compensation depends on:
• Degree of disability: Expressed as a percentage of total disability (0–100%). A modified formula similar to the death formula is applied, with the disability percentage as a multiplier. Permanent total disability (100%) is treated similarly to death for compensation purposes.
• Hospitalisation duration: Length of hospitalisation required for SAE management affects the compensation quantum — longer hospitalisation reflects more serious injury.
• Medical expenses: All actual medical expenses incurred for SAE management are reimbursed in addition to (not instead of) the formula-based financial compensation.
• Income loss: Loss of income during the period of hospitalisation and recovery may be included in the compensation assessment.
Ethics Committee’s role in non-fatal injury compensation:
The Ethics Committee assesses the degree of disability, reviews the medical record, and determines the appropriate compensation amount. The EC may seek expert medical opinion on the degree and permanence of disability. The EC’s decision on compensation quantum is binding on the sponsor (subject to the Apex Committee appeal mechanism).
The “free medical management” obligation:
Independent of the financial compensation obligation, the sponsor must provide FREE medical management for the trial-related injury for as long as required — even if the injury does not qualify for financial compensation under the formula. This medical management obligation continues until the injury resolves or is found to be unrelated to the trial.
One of the most operationally challenging aspects of India’s clinical trial compensation framework is the interim compensation provision:
• When the Ethics Committee sends a notice to the sponsor regarding a trial-related SAE or death, the sponsor must pay 60% of the calculated financial compensation within 15 days of receipt of the notice
• This interim payment is made before the full causality investigation is complete and before the final compensation amount is determined
• The interim payment is non-recoverable — even if subsequent investigation determines that the death or injury was not related to the trial, the 60% interim payment cannot be reclaimed from the participant or their family
Insurance implications of the 60%/15 day rule:
• The sponsor must have immediate access to funds for the interim payment — insurance must be structured to allow swift payment within 15 days
• The non-recoverability means the sponsor bears the risk of interim payments for deaths/injuries subsequently found to be unrelated to the trial
• Insurance claims for the interim payment are typically advanced by the sponsor from their own funds and then reimbursed by the insurer following claim processing
Trial budget implications:
Sponsors must budget for interim compensation obligations throughout the trial period. For Phase I trials with higher inherent risk, the probability of SAEs requiring interim compensation is higher. Insurance premiums and per-participant limits must reflect the expected interim payment exposure.
Who Requires Clinical Trial No-Fault Compensation Insurance
Clinical trial insurance is required for every clinical trial conducted in India involving human participants. The obligation spans pharma companies, biotech firms, medical device manufacturers, academic research institutions, and CROs acting as sponsors.
How to Handle SAEs and File a Clinical Trial Compensation Claim
Clinical trial compensation claims follow a specific regulatory process involving the investigator, Ethics Committee, sponsor, and insurer — with strict timelines mandated by the NDCTR.
When an SAE occurs during the trial:
• Immediate medical management: The investigator must provide or arrange immediate medical care for the participant. The sponsor is obligated to fund this care — the investigator should ensure the sponsor or trial coordinator is notified immediately so that cost coverage can be arranged without delay
• SAE report to sponsor (within 24 hours): The investigator must notify the sponsor of any SAE immediately, and provide a written initial SAE report within 24 hours
• SAE report to CDSCO (within 14 days): The sponsor must report Serious Unexpected Suspected Adverse Reactions (SUSARs) to CDSCO within 14 calendar days (7 days for fatal/life-threatening SUSARs)
• SAE report to Ethics Committee: The sponsor must report all SAEs to the relevant Ethics Committee within the specified timeframe. The EC then reviews causality and determines whether compensation is warranted
• Notify Probitas and the insurer: The sponsor should notify Probitas (022 4302 0000) of any SAE that may give rise to a compensation claim. Early notification allows the insurer to monitor the case and be prepared for the EC notice.
When the Ethics Committee determines that an SAE warrants compensation:
• EC notice: The Ethics Committee issues formal notice to the sponsor stating that compensation is required and providing an initial assessment of the case
• Interim payment trigger: Receipt of the EC notice triggers the 60% interim compensation obligation — the sponsor must pay 60% of the calculated compensation within 15 days of receiving the EC notice. Contact Probitas immediately upon receiving the EC notice to activate the insurance claim for the interim payment
• Causality assessment: The EC conducts or reviews the causality assessment — evaluating whether the injury or death is attributable to the investigational product, a protocol procedure, or other trial-related cause covered by the NDCTR categories
• Compensation formula calculation: The EC applies the Schedule I formula to calculate the final compensation amount. The sponsor may engage a medical expert to provide input on disease factor and disability assessment
• Apex Committee: If the sponsor or the participant’s family disputes the EC’s causality determination or compensation amount, either party may appeal to the Apex Committee (Technical Expert Committee) constituted by CDSCO.
• Final compensation payment: Once the Ethics Committee determines the final compensation amount, the sponsor pays the balance (total amount minus the 60% interim already paid). The insurance reimburses the sponsor for all compensation payments covered under the policy.
• Documentation required for insurance claim: SAE report (initial and follow-up), hospital records and treatment invoices, death certificate (for death compensation claims), causality assessment report, Ethics Committee notices (interim and final), compensation calculation under Schedule I formula, proof of interim payment made within 15 days, clinical trial protocol (to verify the participant was correctly enrolled), informed consent form signed by the participant, insurance claim form
• Medical expense reimbursement: All hospital and treatment invoices for SAE management are reimbursed under the medical expense coverage section of the policy. These are processed separately from the financial compensation claim.
• Timeline: Clinical trial compensation claims can be protracted — the causality assessment and EC/Apex Committee process may take several months. The insurer monitors the claim throughout and provides advance on settled amounts where the regulatory process supports it.
What Clinical Trial Insurance Does NOT Cover
While the coverage is broad, certain categories of loss are excluded. Understanding these exclusions helps sponsors structure their insurance adequately and avoid coverage gaps.
Adverse effects from standard medical care provided to the participant that is NOT mandated by the trial protocol — i.e., the routine treatment of the participant's underlying disease using standard of care medications — are excluded. Only adverse effects from protocol-mandated concomitant medications are covered.
Injury or deterioration arising solely from the participant's pre-existing medical condition — unrelated to the investigational product or any trial procedure — is excluded. The trial insurance covers incremental harm from trial participation, not natural disease progression.
Injury arising from intentional, fraudulent, or wilfully negligent deviations from the approved protocol by the investigator — beyond the scope of inadvertent protocol deviations — may be excluded or subject to significant excess. Fraudulent conduct (data fabrication, etc.) is typically excluded.
Clinical trials conducted without valid CDSCO permission, without Ethics Committee approval, or without CTRI registration (i.e., non-compliant trials) are typically excluded. Insurance is contingent on the trial being conducted with all required regulatory approvals in place.
Where death occurs from a cause clearly unrelated to the trial — e.g., the participant dies in a road accident or from an acute myocardial infarction in a trial studying an anti-fungal drug with no cardiac mechanism — the death may not qualify for trial-related compensation under the NDCTR framework, and the insurance does not cover natural deaths unrelated to the trial.
Clinical trial insurance covers participant compensation and investigator indemnity. It does not cover damage to the trial site's property, equipment, or business losses arising from the trial — these require separate property and business interruption insurance.
Fines, penalties, or sanctions imposed by CDSCO or other regulatory authorities on the sponsor or investigator for regulatory non-compliance are excluded from insurance coverage. Regulatory compliance is the sponsor's responsibility and cannot be insured.
If the sponsor had prior knowledge of a safety risk that was deliberately withheld from the Ethics Committee or from trial participants in the informed consent process, and injury results from that concealed risk, the insurer may deny coverage on grounds of material non-disclosure.
Clinical trial insurance is a specialist product subject to individual underwriting assessment for each trial. Coverage terms, exclusions, per-participant limits, aggregate limits, and policy period vary by trial design, phase, therapeutic area, risk profile, and insurer. The regulatory requirements described are based on India's New Drugs and Clinical Trials Rules 2019 (NDCTR) and CDSCO guidance as of the publication date of this page. Sponsors should verify current regulatory requirements with their regulatory affairs team or a qualified regulatory consultant. Probitas Insurance Brokers Pvt. Ltd. · IRDAI Lic. No. 528.
Clinical Trial Insurance Questions
Get Your Clinical Trial Insurance Quote
Clinical trial insurance is individually underwritten for each trial. Share your protocol details and Probitas will arrange a policy that meets NDCTR, CDSCO, and Ethics Committee requirements.
By submitting you agree to our Privacy Policy and Terms & Conditions. Clinical Trial No-Fault Compensation Insurance is individually underwritten for each trial. Coverage, limits, and premium are agreed following assessment of the trial protocol, phase, therapeutic area, participant population, and risk profile. Policy must satisfy NDCTR 2019, CDSCO, and Ethics Committee requirements. Probitas Insurance Brokers Pvt. Ltd. · IRDAI Lic. No. 528.