Blood, organ and tissue donation saves lives and the related processing and distribution business is booming. But the industry is also fraught with challenges such as professional liability risks, a fast-changing medical field and slow-moving research.

Advances in medical science and pathogen screening help mitigate the risks to this sector, but they can take decades to come to fruition. When the AIDS epidemic emerged in the early 1980s, the human immunodeficiency virus (HIV) was widely publicized as a threat to the blood supply. A significant number of people were infected after receiving HIV-tainted blood or blood products. The enzyme-linked immunosorbent assay (ELISA) test gave the industry the first leg up on HIV screening back in 1985. But it was not until 1999 that a new technology, called nucleic acid amplifications testing (NAAT), revolutionized the ability to detect HIV in donated blood by shrinking the window of time tainted blood could pass screening undetected.

The discovery of NAAT also expanded the universe of viruses detectable in donated blood and tissue. Recent developments have made testing for HIV even faster and easier, yet even now the United States universally bans male homosexuals from donating blood.

Moreover, as pathogen reduction technology and screening tests continue to advance, new threats are always entering the mix while global travel continues to make vigilance ever more challenging.

For example, the mosquito-borne Chikungunya virus, imported to the United States and Europe from Africa in the past several years, has been identified as a potential threat to the blood supply. There have also been multiple reports of dengue fever, a rarity in the United States, emerging in Key West, Florida, just last year. And Babesiosos, a parasitic infection usually caused by ticks, has been linked to 10 U.S. deaths following blood transfusions since 2006.

Perhaps most frightening of all, officials have found no way to screen for retrovirus XMRV, which is in the same family as HIV and linked to chronic fatigue syndrome. To combat the threat, Canada recently banned blood donations from anyone suffering from chronic fatigue. The United States has yet to formally weigh in on this issue.

Fortunately for those working with blood, organs and tissues, the insurance market for these types of miscellaneous health-care professional liability risks has expanded significantly. Sound coverage is available, but buyers should take care to secure protection broad enough for their particular risks and keep a close watch on the ever-changing exposures of diverse health-care providers.

Operations included in miscellaneous health care range from cord blood and dental pulp harvesters to sperm bank and organ procurers. Really, the potential liability claims are as diverse as the sector itself, but the risks generally fall into four categories: donors, recipients, regulatory issues and data breaches.

Donor Risks

Consider the common scenario of a blood donor fainting at a collection site. While the vast majority of donors receive first aid and recover fully, claim severity can soar in the rare case when an individual suffers permanent brain damage from a subdural hematoma caused by a fall after a donation.

Another donor risk to consider is contaminated equipment. Though not permitted in association with qualified blood donor programs, the use of unsterilized equipment and needles can lead to numerous health risks.

Recipient Risks

A different set of risks arise on the recipient side. For example, donated blood could be contaminated with a lethal virus, bacteria or a pathogen that goes undetected until after the blood is transfused into one or multiple patients. Blood, organ and tissue donation is a global business, so screening standards vary widely in jurisdictions around the world, making this potentially lethal exposure difficult to eliminate.

For example, the Centers for Disease Control (CDC) recently recommended that organ donors be screened for HIV within a week prior to the operation. This call came after a kidney failure patient on hemodialysis contracted HIV months after receiving a kidney from a man who tested negative at his initial screening but subsequently engaged in unprotected sex.

This was the first time HIV was contracted during a live donor organ donation, but it points to the very serious risks for organ recipients and the need for ever-changing screening standards that are always balanced against the heavy demand for organs.

Regulatory Risks

Operations involving blood, tissue and organs face regulatory risks. If the Food and Drug Administration determines that a particular human or animal tissue form is considered an unapproved medical device, for example, plaintiffs' attorneys may very well see the government investigation as an invitation to product liability and negligence claims.

When something goes wrong, whether tainted blood is transfused or contaminated tissue is transplanted, there may be the question of whether the blood or tissue at the root of the problem represents a product or a service. Plaintiffs' attorneys frequently have the flexibility to plead professional negligence or product liability, creating uncertainty about whether traditional insurance coverage alone is enough to protect this sector.

Data Risks

In an effort to improve transfusion safety, the CDC launched the first-ever national surveillance system to monitor adverse events in patients receiving blood transfusions. This new "Hemovigilance Module," part of the CDC's National Healthcare Safety Network, allows infection data to be tracked and analyzed.

More data on transfusion reactions and errors helps to improve the standard of care. But for those in the blood business, there is also an increased potential for this data to be exposed, resulting in professional liability claims. 

Like all participants in the health-care industry, blood, organ and tissue banks are increasingly at risk for data breaches. At the end of 2010, the Identity Theft Resource Center showed 160 health-care industry breaches that exposed nearly 1.9 million individual records. This represents 24.2% of all data breaches last year and 11.6% of all exposed records.

And the threat comes not only from hackers or rogue employees maliciously exposing private information. Most often, data breaches occur when a well-meaning employee loses a laptop or other portable electronic device containing sensitive information.

For example, Cord Blood Registry, the world's largest family cord blood bank storing more than 350,000 cord blood collections, was recently forced to notify 300,000 of its clients after a breach exposed their personal information including names, Social Security numbers, driver's license numbers and credit card information. In this case, unencrypted backup tapes were stolen from an employee's locked car.

Cases like this highlight the vast liabilities facing those in the blood, organ and tissue donation industry. But it is a much-needed, life-saving business so these inherent risks must be handled with care. 

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Evan Smith is a health care underwriter at Beazley Group.