Modernized Rules, New Exposures: The Hidden Risk Shift in Clinical Trials

Health Canada’s overhaul of clinical trial regulations has been widely viewed as long overdue, with the last major structural update taking place 25 years ago.

Under the current framework, regulators focus heavily on the drugs being tested rather than how the trials themselves are conducted. According to the federal government, this lack of direct oversight has limited Health Canada’s ability to regulate clinical trials in ways that reflect today’s dynamic research environment. Current regulations also place a disproportionate administrative burden on sponsors of lower-risk trials, making these studies less likely to come to Canada, which limits Canadians’ access to them.

Health Canada’s draft Clinical Trial Regulations aim to address a landscape that’s evolving in scale and complexity. The organization notes that regulations must evolve to reflect differences in trial risk, support innovative study designs, accommodate advanced therapies, and account for the increased use of digital tools.

While the framework is directionally positive, these changes shift where responsibility and financial exposure fall for sponsors (organizations managing and financing the trial), contract research organizations (CROs), and vendor partners.

“The proposed regulations fundamentally shift accountability and oversight across the clinical trial ecosystem,” says Michael Brennan, Underwriting Director, Specialty – Healthcare & Life Science at CNA Canada. “The most significant change is a move to direct regulation of trial conduct across the entire life cycle rather than the historical focus on drug importation and sale. This means regulators will now have more flexibility to intervene at any stage, from authorization to trial completion.”

In addition, sponsors remain fully responsible for patient safety data and data integrity, even when the activities are outsourced to CROs or other vendors. “This creates potential grey areas around fault allocation when something goes wrong,” Michael says.

Another key change is the introduction of a risk-based, flexible regulatory framework, which Michael says will have broad implications. “While this should reduce the administrative burden for lower-risk studies, it also introduces a higher degree of regulatory discretion, particularly for more complex or innovative trials,.” he says. “From an industry perspective, the net effect is increased accountability at the sponsor level, expanded regulatory exposure across CROS and service providers, and greater variability and oversight depending on the trial’s complexity.”

The High Cost of Missed Timelines

Health Canada’s new clinical trial rules are designed to speed up studies by using faster approvals, flexible oversight, and decentralized trial models that improve patient recruitment and reduce administrative bottlenecks. As trials become more efficient, adhering to timelines will be critical.

“Delays under the new framework will have compounding financial, operational, and insurance implications,” Michael says. “From a financial standpoint, delays can materially increase burn rates—how fast an organization spends funds, particularly for sponsor-funded trials.”

On the operations side, prolonged timelines can lead to participant attrition, site disengagement, and protocol deviations, explains Michael.

From an insurance perspective, delays can trigger or exacerbate clinical trial liability exposure, particularly if patient outcomes are impacted. There is also professional liability risk for the CROs and trial operators, as well as potential losses stemming from business interruption, depending on the policy structure.

“More broadly, delays increase the likelihood that issues emerge—whether related to safety, data integrity or compliance—which can ultimately lead to claims,” says Michael.

How Organizations Can Prepare Now

Health Canada’s consultation on the modernized Clinical Trials Regulations closed in spring 2026 and are expected to come into force in spring 2028. While organizations have meaningful time to prepare, Michael says the focus must extend beyond compliance alone. “Organizations that treat this as a compliance exercise will be behind,” he says. “This is fundamentally a government and a risk management shift.”

Michael suggests four key priority actions organizations can take to prepare for—and mitigate risks associated with—the new regulations:

1. Revisit contracts and indemnity agreements. Ensure the sponsor, CRO and site agreements clearly reflect ultimate accountability and risk transfer. Confirm that contracts align with the sponsor’s liability position.

    

2. Strengthen the oversight framework: Formalize how third-party activities will be monitored, documented, and escalated. “Investing in real-time data and monitoring capabilities will help manage the risk proactively rather than reactively,” Michael says.

    

3. Stress-test operating models: Run scenarios for regulatory delays, mid-trial interventions, and decentralized trial disruptions. Develop contingency plans for delays, suspensions, and new conditions imposed in a trial. Ensure the organization is equipped to oversee decentralized or hybrid trial models.

    

4. Review insurance programs. Confirm that coverage aligns with multi-party exposures, decentralized delivery models, cross-border trials, and long-tail liability exposures.

“Insurance plays a critical role in supporting organizations through this transition,” Michael says. “At a baseline, clinical trial liability insurance remains essential, covering bodily injury or harm to participants arising from trial activities. However, under the modernized framework, organizations need to think more holistically.”

This can include professional liability such as: Errors & Omissions coverage for sponsors and CROs; product liability for investigational therapies; cyber data liability, particularly for decentralized trials; and coverage that reflects multi-party and multi-jurisdictional exposures.

As the modernized trial environment takes shape, organizations across the clinical trial ecosystem face new complexities and responsibilities. Those that manage risk proactively and holistically will remain resilient.