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Sports Nutrition

Liability Insurance Drying Up for Companies Dealing with DMAA

<p>Insurer Poms &amp; Associates reported an industry-wide pull back on offering liability coverage for companies that offer DMAA, a development that mirrors the pre-ban ephedra market.</p>

It appears insurance companies no longer want to insure DMAA ingredients and products. Longtime dietary supplement industry insurer Poms & Associates Insurance Brokers  reported most insurers covering the supplement and natural products space are moving to include DMAA exclusions in any liability coverage they offer companies dealing with the controversial ingredient. This sudden shift in coverage offering mirrors the situation with ephedra-related ingredients and products before they were banned by FDA.

Poms noted as of June this year only about two or three insurers were adding a DMAA clause to their liability quotes, but in recent weeks most of the insurance companies in the space have begun adding such exclusions, following widespread coverage of safety concerns and regulatory challenges over the compound commonly used in sports nutrition supplements.

Greg Doherty, practice leader of the dietary supplement insurance division of Poms, was struck by how fast the insurers rallied against DMAA. It appears that the April warning letters to ten DMAA product suppliers must have caught their eye all at the same time," he speculated. "Once that happened they began to do some digging and found the other negative information about DMAA, and decided it was time to protect themselves with a DMAA exclusion. He noted one carrier was considering offering coverage for DMAA on a "carveback" basisthe exclusion could be dropped, depending on the type of products being sold, the dosage of DMAA and the volume of DMAA sales as a percentage of overall salesbut the insurer decided  not to offer the carveback option.  

Doherty explained the fall of ephedra began when insurers stopped covering it. After the FDA banned ephedra from the market, insurance companies paid millions in ephedra claims. He said it was too soon to know if the same fall and claims are in DMAA's future, or if maybe the exclusions from insurers came too late.  According to Doherty, there are still two insurers offering liability without exclusion, but there is no word on if they just haven't caught up to the news and controversies surrounding DMAA.





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