So many historical figures have offered opinions on taking risks in life.

“Do one thing every day that scares you,” Eleanor Roosevelt said.

“Go out on a limb. That’s where the fruit is,” suggested Jimmy Carter.

“Take calculated risks. That is quite different from being rash,” from General George Patton.

It can be argued that the reason the biotechnology boom took off is because its visionaries were willing to take risks. But as the biotech sector also has learned, taking great risks requires strong risk management.

“There’s more public concern around biotech companies because they’re working with life itself, so responsible stewardship is even more critical,” says Professor Gary Marchant, director of the Center for Law, Science and Innovation at Arizona State University.

Dina Rudick/Globe StaffScientists in the lab at Cambridge startup Jounce Therapeutics Inc.

Greater Boston’s biotech firms have developed cutting-edge medicines, medical devices, therapies, and treatment options that have saved countless lives around the world. Danvers-based Abiomed, for example, makes the world’s smallest heart pump, which assists or replaces the life-sustaining pumping function of a human heart.

The life sciences have thrived in the region’s unique ecosystem that brings together elite universities, leading hospitals, growing companies (from start-ups to brand names), venture capitalists, and a culture of innovation that dates back centuries.

The economic data tells the story: The biotech sector has created 66,000 full-time jobs in Massachusetts, and the average salary for those jobs (about $140,000) is more than double the average state salary (about $66,000), according to the Massachusetts Biotechnology Council. Up in Maine, Jackson Labs, a leader in biomedical research, is directly or indirectly responsible for $575 million in economic impact and more than 3,500 full-time jobs, according to Jackson Lab COO Charles E. Hewett.

Risk versus reward

But with this great opportunity comes great risk. And to manage risk requires a strong risk-management approach—being proactive, rather than reactive.

“Risk management is a fluid, ever-changing process,” says Elizabeth Tarricone, senior vice president of risk management at Cross Insurance, an independent insurance broker representing clients in the health insurance marketplace across New England. “Constant monitoring is required as the operations change and evolve.”

What’s the upside of effective risk management? “Compliance with the law, protection from potential liability, good stewardship of resources, and a reputation for being responsible, which will attract stakeholders, from employees to regulators, investors, and customers,” says Marchant.

And the price of ineffective risk management? “It can bring down the entire company,” Marchant says, “based on one mistake or bad product.”

Marchant and others see four major risks facing the region’s booming life sciences industry, and have suggestions for how can they be appropriately managed.

Managing the risks of biotech

1. Business risk
   The problems life science companies tackle, such as cancer, diabetes, and heart disease, are extraordinarily complex. When a company invests its valuable time, talent, and money into R&D, those investments can come up empty, not resulting in a product approved by the U.S. Food and Drug Administration.As a general matter, investments in the right people, processes, and systems are needed to reduce the chances of loss. Partnering with external experts to assess the know-how and insurance coverage a life science company might need is a key factor for managing business risk. Insurance, for example, could play a role to preserve employee health or protect a firm’s intellectual property, which can be difficult to place a value on.
2. Product and clinical-trial liability
   When products fail, and cause harm, product liability litigation may result. Life sciences companies face liability both in the clinical trial phase, as well as after a product has been launched. The FDA requires drug companies to report drug side effects as part of the approval process.
   Clinical trials, where the product is unproven and as-yet unregulated, can be another source of potential liability, as trial participants may face the risk of adverse health events or unanticipated negative outcomes in a clinical trial. And that risk is complicated when a biotech firm runs clinical trials in multiple countries.
   To manage these risks, life science firms should follow standard processes for conducting drug and device investigations. Having trained people following the appropriate processes, and supported by the right systems, reduces risk. That said, having adequate insurance coverage in place is another step in managing risks related to clinical trials and product liability.
3. Equipment and facilities
   Lab equipment and cutting-edge research facilities are massive investments for any life sciences company. These expensive “physical assets” face risks related to fire, theft, and other forms of loss. Moreover, some equipment used in R&D can be so specialized that it’s difficult, or even impossible, to replace, meaning its loss could disrupt business continuity.
   Risk management for specialized lab equipment might involve training people to use that equipment, regular monitoring and maintenance, and removing hazards around the equipment. An additional step, of course, is to insure the equipment against the possibility of loss, including potential disruption of a firm’s business.
4. Spoilage
   Supplies and inventory in the life sciences can be temperature sensitive and require complex handling procedures, such as refrigeration. For example, a biotech firm that relies on perishable cell cultures, which may represent months of intensive research, can face a spoilage event when a refrigerator unit breaks down or in the event of a widespread power outage. When this happens, it may not be possible to replace the samples, which could constitute a loss that sets the firm back both financially and in lost R&D time.

Risk management supports success

Risk management strategies must change and mature within each biotech firm.

Complex ethical issues in biotech play a role too. “There’s more public concern around biotech companies because they’re working with life itself, so responsible stewardship is even more critical,” says Marchand.

As Greater Boston’s biotech firms drive innovations that save lives and grow the region’s economy, they’ll need to effectively manage their particular risks. Partnering with experts and insurance providers should be part of that evolving risk management process.