1. Forms
2. PR
3. PR-04-00

What This Form Is

The PR 04 00 - Products Liability Coverage for Diagnostic Testing Laboratories is an endorsement developed by ISO (Insurance Services Office) for use with professional liability coverage forms tailored to healthcare providers, specifically diagnostic testing laboratories. Its core purpose is to broaden the scope of coverage by extending the definition of a "laboratory incident" to encompass liability stemming from the sale of certain therapeutic agents by the insured laboratory. This means that if a product sold by the lab causes harm, this endorsement may provide coverage where the standard professional liability form might not.

Classes of Business It Applies To

This endorsement is specifically designed for:

• Diagnostic Testing Laboratories: These are facilities whose primary operations involve conducting various diagnostic tests, such as blood analysis, genetic testing, or pathology services.
• Laboratories that, in addition to their testing services, also engage in the sale of therapeutic agents on a retail basis. These products are intended for therapeutic use and are made or sold by the lab directly to consumers or patients.

Real-world example: A clinical laboratory that performs diagnostic blood tests for patients might also sell specialized vitamin formulations, dietary supplements, or at-home testing kits (where the samples are returned to the lab for analysis) directly to the public or its patients. If an individual experiences an adverse reaction or injury due to one of these sold products after it has left the laboratory's premises and control, this PR 04 00 endorsement could be triggered to provide coverage for the ensuing liability.

Special Considerations

Several important limitations and conditions are associated with this endorsement:

• Injury After Relinquishing Control: A key condition is that the coverage typically applies only if the bodily injury or property damage caused by the product occurs after the laboratory no longer has physical possession or control of the product.
• Retail Basis Requirement: The therapeutic agents covered are those that the laboratory regularly manufactures or sells on a retail basis. Products that are distributed for investigational purposes, provided as samples, or not sold in a typical retail transaction might not fall under the scope of this endorsement.
• Modifies Existing Coverage: It's crucial to remember that the PR 04 00 is not a standalone insurance policy. It functions as an endorsement that amends and becomes part of an existing professional liability coverage form, such as the ISO PR 00 09 (Health Care Providers Professional Liability Coverage Form For Entities) or PR 00 10 (Health Care Providers Professional Liability Coverage Form For Individuals).
• Impact on "Laboratory Incident": Users of this form must understand precisely how it modifies the definition of "laboratory incident" (or a similar term for a covered event) within the main policy to incorporate these specific product liability exposures.

Key Information for Agents and Underwriters

For Agents:

• Proactively identify if their diagnostic laboratory clients are involved in selling any therapeutic products directly to patients or the general public, as this endorsement can fill a significant coverage gap.
• Clearly explain the specific terms and conditions of the coverage to the insured, paying particular attention to the "retail basis" and "after relinquishing control" clauses to manage expectations.
• Assess and recommend appropriate limits of liability, considering the added exposure from product sales.
• Differentiate this coverage from the lab's core professional liability: this endorsement is for products sold, while errors in diagnostic testing services themselves are typically addressed by the base professional liability policy.

For Underwriters:

• Risk Assessment:
  • Conduct a thorough evaluation of the types of therapeutic agents being sold. Determine if they are compounded on-site by the lab or if they are third-party products being resold.
  • Assess the laboratory's quality control procedures, product labeling practices, ingredient lists, and any warnings or disclaimers provided with these products.
  • Review the sales volume, revenue generated from these product sales, and the intended consumer base.
  • Investigate the laboratory's history regarding any past complaints, adverse event reports, or claims related to the products they sell.
• Pricing Considerations: The premium for this endorsement should accurately reflect the increased liability exposure introduced by the product sales. Factors influencing pricing include the nature and potential hazards of the products, sales volume, distribution channels, and the overall risk management practices of the laboratory.
• Clarity of Coverage Scope: Ensure that the policy language, including this endorsement, is clear on what constitutes "therapeutic agents" and what is meant by "regularly made or sold on a retail basis" to prevent ambiguity in the event of a claim.
• Potential Exclusions: Evaluate if any specific products sold by the laboratory pose an unusually high risk and should therefore be considered for exclusion from this endorsement or require specific underwriting attention.