Legal Definitions - manuscript policy

A manuscript policy is a highly customized insurance contract that is specifically drafted or significantly modified to meet the unique and complex risk management needs of a particular policyholder. Unlike standard insurance policies, which use pre-printed forms and offer coverage for common, well-understood risks, a manuscript policy is essentially written "from scratch" or heavily adapted through negotiation between the insurer and the insured. This bespoke approach allows for the creation of coverage terms, conditions, and exclusions that precisely address specialized exposures that cannot be adequately covered by off-the-shelf insurance products.

Here are some examples illustrating the application of a manuscript policy:

• Imagine a company that specializes in launching small satellites into orbit for scientific research and commercial purposes. Their operations involve highly specialized technology, unique launch risks, and potential liabilities related to space debris or satellite malfunction. Standard aviation or general liability insurance policies would not adequately cover these unprecedented risks.

  How it illustrates the term: To secure comprehensive coverage, this company would require a manuscript policy. Insurers would work directly with the company to draft specific clauses addressing risks such as launch vehicle failure, in-orbit collision, data loss from satellites, and third-party liabilities arising from space operations, creating a policy entirely tailored to their highly specialized and complex business model.

• Consider a major international film production studio undertaking a multi-million dollar movie shoot across several continents, involving hundreds of crew members, exotic locations, and highly valuable equipment. The project faces a myriad of unique risks, including political instability in certain regions, specific local labor laws, potential damage to historical sites, and the need for specialized stunt and visual effects coverage.

  How it illustrates the term: A standard film production insurance policy would likely fall short. The studio would opt for a manuscript policy, which would be custom-designed to incorporate specific coverages for each unique location, address varying legal and regulatory environments, provide tailored protection for specialized equipment and personnel, and account for the complex logistical and financial risks inherent in such a large-scale, international endeavor.

• A pharmaceutical company is developing a revolutionary new gene therapy for a rare disease. Because the therapy is experimental and has no long-term usage history, the company faces unique and unpredictable product liability risks that are not yet understood or covered by standard pharmaceutical insurance policies.

  How it illustrates the term: To protect itself from potential claims related to the therapy's efficacy, unforeseen side effects, or long-term health impacts, the pharmaceutical company would need a manuscript policy. This policy would be custom-written to address the specific, novel risks associated with an experimental medical treatment, including clauses for clinical trial phases, regulatory approval processes, and potential liabilities arising from a product with no established market history or long-term patient data.