Should Sponsors Cover Malpractice Insurance?

Darshan and Edye tackle a hot topic in clinical research budgeting:
 Should malpractice insurance be considered an overhead cost that sponsors cover?

Edye explains both sides. Sponsors often argue that malpractice is simply a cost of being a physician, unrelated to research. Sites, however, may try to include it—at least partially—as part of trial-related overhead. But even then, justifying full coverage through a single trial is difficult.

Darshan pushes back, suggesting that including malpractice in overhead feels like “nickel and diming” for what is a baseline cost of doing business. Just as sponsors aren’t expected to cover the electricity bill directly, they shouldn’t be on the hook for malpractice coverage that’s already necessary for practicing medicine.

Academic institutions may have strong systems for tracking and justifying overhead—down to the penny. But smaller sites? That’s a trickier case. One workaround sites use: requiring physicians to carry malpractice as part of an independent contractor agreement. However, this approach opens the door to new legal complexities, like the corporate practice of medicine doctrine.

Key takeaway: Malpractice insurance is already baked into clinical practice. Expecting full reimbursement from sponsors may be unrealistic—unless the site has ironclad documentation and a clear percentage justification.

Still have questions? Reach out!