PrediSurge at SNITEM’s Innovative Start Up Day

Navigating the MedTech Frontier: Key Insights for Securing Growth leveraging insurance as a strategic tool.

Navigating the MedTech Frontier: Key Insights for Securing Growth leveraging insurance as a strategic tool.The health technology (MedTech) sector is a landscape of rapid innovation. Yet transforming groundbreaking ideas into long-term success calls for strategic risk...

1. Insurance as a Strategic Growth Lever

Beyond regulatory compliance, insurance plays a strategic role in supporting growth for health tech companies by providing reassurance to all stakeholders. Under the updated CE Mark regulation, companies are required to demonstrate “sufficient financial coverage,” which is determined by factors such as the class and type of device, as well as the size of the company.

Expanding globally—especially into the U.S. market—can significantly impact insurance exposure, as a single large claim in the U.S. could exhaust global insurance capacity. This demands a recalibrated approach to risk management. It’s also essential to avoid overly specific descriptions of activities in insurance policies (such as naming individual products), as this can lead to coverage gaps if new products are launched without prior disclosure.

2. Mastering Complex Contractual Engagements & Data Security

Signing large contracts—such as PrediSurge’s agreements with Medtronic or Abbott—comes with extensive and often demanding conditions.Key challenges include:

• Clearly defining day-to-day delivery obligations across multiple time zones, and distinguishing between an obligation of result (“engagement of end”) and an obligation of means (“engagement of effort”).
• Ensuring strict data protection, as compliance with frameworks like GDPR (Europe), HIPAA (U.S.), and even state-specific laws (e.g., California) is non-negotiable. These regulatory requirements must be thoroughly integrated into contractual language.

Companies must carefully review contracts for potential blind spots—particularly around liability, timelines, and data handling. Ideally, startups should propose their own general terms and conditions. However, this is rarely feasible when negotiating with industry giants.

3. The Overlooked Importance of Director’s Liability Insurance

A critical—but often overlooked—aspect of risk management is the personal liability of company directors. While “key person” insurance is sometimes required by investors, management liability data- insurance (also known as directors and officers or D&O insurance) is rarely mandated—leaving a significant blind spot.

In the event of company liquidation or project failure, directors’ personal assets may be at risk for alleged management errors. In fact, liquidators investigate director responsibility in over 30% of liquidation cases.

This type of insurance typically covers both legal defense costs and third-party indemnification. It is paid for by the company and generally not considered a taxable benefit for the individual. Beyond its protective value, offering this coverage demonstrates a culture of risk awareness and risk mastery—an increasingly important signal to investors, particularly during fundraising rounds.

‍