Pre-Revenue Medical Device Insurance
No revenue does not mean no exposure. Prototypes, user testing, clinician demonstrations and investor contracts create real liability before launch - and cover is available when the stage is presented properly.
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The Tank take
Pre-revenue medical-device companies can obtain cover, but insurers price more than turnover: intended use, classification, regulatory stage, prototype use, testing, demonstrations, contracts, countries and the limits requested all shape the terms.
The policy should match the current development stage and be updated before trials, commercial launch, new countries, material product changes or direct sales begin. Future plans disclosed in a proposal do not automatically become insured activities.
A pre-revenue wearable, insured before launch
One anonymised Tank placement that shows how an early-stage device risk gets structured.
An early-stage business was developing a wearable device to support walking cadence, with launch planned after further prototype work. User testing, clinician demonstrations and product education were already happening, so product exposure existed before revenue did. The founder's separate clinical profession was insured elsewhere, and we kept it that way: the submission sought products and public liability only, with recall and R&D-related extensions, and left PI and medical malpractice non-operative.
The result: $10M products liability terms obtained with separate product-recall and R&D sublimits. A competing market offered both $5M and $10M options priced for a device still in R&D. The client chose cover matched to the current stage, with clear triggers to revisit at launch.
Anonymised and rounded. Terms for an early-stage device depend on its class, testing, demonstrations and launch plans at the time of quoting.
Where exposure hides before launch
Early-stage risk is dominated by uncertainty, contracts and the consequence of failure rather than sales volume.
Bench testing, demonstrations, pilots and feedback programmes expose third parties to the device before commercial sale. The Product definition and declared use need to cover exactly this activity.
Founders who also practise clinically or consult need clean boundaries between policies. The device company's cover should not silently rely on a personal clinical policy that was never designed for it.
Funding, research, manufacturing and distribution agreements can impose high limits or broad indemnities well before the business has revenue to match them.
Device class, intended use and unresolved market-authorisation steps shape appetite and conditions. Some markets will offer lower limits while the pathway is incomplete, then revisit at launch.
What to disclose, and when to come back
Early-stage policies need updating as the business changes. These are the trigger points.
- 01
The present development and regulatory stage, honestly described
- 02
Who can use the prototype and under what controls
- 03
Testing and validation completed to date
- 04
Planned trials, demonstrations or patient interactions
- 05
Expected launch countries, sales channels and volumes
- 06
Material changes - launch, new countries, direct sales, product changes - before they happen, not after
Check the current Australian guidance
Regulatory obligations sit outside your insurance policy. These official sources are the starting point.
External government and industry sources. Tank Insurance is not responsible for their content; confirm current requirements with the relevant body.
Related life sciences guides
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Questions about Pre-Revenue Devices
Potentially. Insurers may use minimum premiums and assess prototype, demonstration, testing and future-launch exposures rather than revenue alone. Minimum premiums can still be disproportionate for very small start-ups with some markets, which is part of why the placement route matters.
They can, especially when supplied, demonstrated or used by third parties. The Product definition and declared use must be checked against the actual testing programme.
Yes. Countries, channels, volumes and timing help the insurer assess whether the policy can accommodate the next stage or needs adjustment, and they protect you from operating outside the declared activities.
Not automatically. The entities, activities and insured persons usually differ. Keeping the clinical profession and the device company separately and deliberately insured is often the cleaner structure.
General information only. This page does not take account of your objectives, financial situation or needs and is not legal advice. Cover depends on the insurer, policy wording, limits, excesses, exclusions and information disclosed. Read the relevant policy documents and obtain professional advice before deciding.
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