Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Indemnity from liability:
Context:
Amid an acute vaccine crisis in the country, India is expected to grant indemnity to foreign vaccine makers including Pfizer and Moderna which would make it easier for their Covid vaccines to come to India.
- Now, Serum Institute has become the latest pharma company to ask for indemnity from liability, stating that all vaccine manufacturers, whether Indian or foreign, should be protected against legal suits for any severe side effects.
What is indemnity clause?
In simple terms, indemnity means security against a loss or other financial stress.
- In legal terms, it means a contractual obligation of one party to compensate another party due to the acts of the former.
- The clause is commonly used in insurance contracts.
In the case of India, if the government gives an indemnity to foreign vaccine makers to roll out their vaccine in the country, the government, and not the vaccine maker, would be liable to compensate any citizen who claims to have side effects after taking the vaccine jab.
What are ‘Bridging trials’?
‘Bridging trials’ are localised clinical trials which generate data related to the impact of foreign medicines/vaccines on the indigenous population before they are rolled out for the public. These trials are important in ascertaining the efficacy and potential side-effects related to the medicine/vaccine.
- Besides clearance on indemnity clause, foreign vaccine makers including Pfizer and Moderna had sought relaxation on the requirement for a post-approval bridging trial for its vaccine.
Are there any exceptions to indemnification?
There are a number of common exceptions to indemnification.
An indemnification provision may exclude indemnification for claims or losses that result from the indemnified party’s:
- Negligence or gross negligence.
- Improper use of the products.
- Bad faith failure to comply with its obligations in the agreement.
Insta Curious:
An indemnity claim may be brought before breach of contract, whereas damages claim can only be brought after the breach of a contract. Read more about this, here.
Did you know that The WHO has launched a nofault compensation programme for Covid-19 vaccines through the Covax alliance? Read here
Do you know what Contract Novation is? Read Here (Another Concept to Safeguard the interests in a contract)
InstaLinks:
Prelims Link:
- What is indemnity clause?
- Where it is oftenly used?
- Benefits of the clause.
- Important Vaccines being imported into India.
Mains Link:
Discuss the significance of Indemnity clause.
Sources: the Hindu.
