Drugs Wholesaler Distributor Insurance Policy Information
Drugs Wholesaler Distributor Insurance. Prescription and over-the-counter drugs are essential for so many people. From treating chronic illnesses to keeping symptoms that are related to common ailments at bay, there are so many types of prescription drugs available that people rely on.
As a drugs distributor or wholesaler, your job is to supply the medications that the general public and facilities - like hospitals, pharmacies, and other institutions - require.
Drug wholesalers receive brand-name and generic pharmaceuticals from foreign or domestic manufacturers, usually by truck, for distribution to clinics, doctors, drug stores, hospitals, and other medical facilities. The wholesaler may also stock over-the-counter medications, vitamins, and other health-related items.
The distribution center may be open 24 hours a day. Generally, the product is delivered to the customer on the distributor's vehicles.
Working with drugs involves a lot of risk; so does running a business, in general. There are several liabilities that you could face, and it's important that you protect yourself from these liabilities so that you can assure the safety of your livelihood, your employees, and the people you serve.
What's the best way to do that? - By making sure that you have the right drugs wholesaler distributor insurance.
Drugs wholesaler distributor insurance protects your business from lawsuits with rates as low as $87/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked drugs wholesaler & distributor insurance questions:
- What Is Drugs Wholesaler Distributor Insurance?
- How Much Does Drugs Wholesaler Distributor Insurance Cost?
- Why Do Drugs Wholesalers And Distributors Need Insurance?
- What Type Of Insurance Do Drugs Wholesalers And Distributors Need?
- What Does Drugs Wholesaler Distributor Insurance Cover & Pay For?
What Is Drugs Wholesaler Distributor Insurance?
Drugs Wholesaler Distributor Insurance is a type of insurance coverage specifically designed for companies that distribute and wholesale prescription and over-the-counter medications to other businesses and individuals.
This insurance provides protection against financial losses related to various risks associated with the drug distribution business, such as theft, damage, spoilage, and other unforeseen circumstances.
It can also include liability coverage for any legal or regulatory compliance issues that may arise, as well as protection against product recalls or other issues related to the quality and safety of the drugs being distributed.
How Much Does Drugs Wholesaler Distributor Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small drugs wholesaler distributor businesses ranges from $87 to $129 per month based on location, size, revenue, claims history and more.
Why Do Drugs Wholesalers And Distributors Need Insurance?
Despite your attempts to ensure the best possible services, the safest work environment, and the safest products, things can - and do - go wrong. A vendor could trip and fall while making a delivery. An employee could sustain an injury while working.
A client could sue you, stating that the products you supplied caused injuries. A pipe could burst in your facility and cause extensive damage. These are just some of the issues that could arise.
The cost of repairs, medical bills, and any legal fees that may be associated with the above-mentioned situations could be exorbitant. Having to cover those expenses yourself could put you in a serious financial predicament.
If you are properly insured, however, instead of having to pay for those expenses yourself, your insurance company would help to cover the expenses. Drugs wholesaler distributor insurance serves as a form of financial protection.
What Type Of Insurance Do Drugs Wholesalers And Distributors Need?
There are several types of drugs wholesaler distributor insurance coverage that should be considered.
Some of the most basic policies, however, include the following:
- Product Liability: If a client files a lawsuit against your company, citing that a medication you provided caused an injury, product liability insurance would help to cover the related legal expenses and damages that you may be liable for.
- General Liability: You'll also need to carry general liability insurance, which covers third-party injury and property damage claims. Should a vendor slip and fall while making a delivery, this insurance will cover the related medical expenses, as well as any legal fees that may arise if the individual files a lawsuit.
- Workers Compensation: This type of coverage will help to cover medical expenses and lost wages should an employee sustain a work-related injury or illness. For example, if a piece of equipment malfunctions and injures a staff member, workers' comp will assist with the related costs.
- Commercial Property: If your warehouse is damaged in a fire or a storm, if a pipe burst, or if a vandal damages your building and steals any inventory, commercial property insurance will help to cover the expenses.
These are just some of the types of drugs wholesaler distributor insurance coverage you should carry. You can carry individual policies, or opt for a commercial package policy that combines several different types of coverage under a single policy.
Drugs Wholesale Distributor's Risks & Exposures
Premises liability exposure is limited due to the lack of public access to the storage facilities. Customers should be confined to specific areas that are kept clean, dry and free of obstacles. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
If customers pick up goods, loading docks must be clearly marked and user-friendly. There should be a disaster plan in place for unexpected emergencies. Contracts with transportation and storage providers may expose the operation to additional liability.
Railroad sidetrack agreements pose additional concerns. If there is a railroad sidetrack or dock, an employee must verify that no one is in the path of an incoming or outgoing train. Railroad tracks and conveyors can be attractive nuisances. The premises should be enclosed by fencing with "No Trespassing" signs posted.
Products liability exposure is very high as any entity within the chain of control of the product can and most likely will be involved in any lawsuit filed. The exposure increases if the wholesaler repackages or relabels the drugs or imports goods from foreign manufacturers.
Bodily injury can result from tampering or poisoning, improper handling, contamination, improper labeling, or combination of ingredients. All products should be dated and stored as required by the manufacturer and marked for easy access in case of a recall.
Environmental impairment exposure is high due to the potential for air, land, or water pollution from the leakage of refrigerants used to keep some pharmaceuticals fresh. All underground tanks and pipes should be routinely tested for leakage.
Spill procedures must be in place to prevent the accidental discharge of contaminants. Improper disposal of pharmaceuticals can contaminate air, ground, or water. Record keeping is critical. Contracts should be in place to dispose of all environmentally dangerous chemicals.
Workers compensation exposure is very high. Lifting injuries such as back pain, hernias, sprains, and strains are common. Workers should be trained in proper lifting techniques and to use conveyances. Shelving must be stable to prevent stored goods from falling onto workers. Forklift operators must be properly trained.
Leaking of refrigerants is a serious health hazard that can lead to lung damage or even death. Protective breathing equipment must be available to all workers in the event of any ammonia leak. Continual standing can result in musculoskeletal disorders of the back, legs, or feet. Floor coverings or coatings may pose slip and fall hazards.
Housekeeping is critical. When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals.
Drivers of delivery vehicles may be confronted by robbers, injured in automobile accidents, or be injured at customers' premises. Training must be provided on dealing with such situations, and any necessary security should be provided.
Property exposure is high due to multiple ignition sources, open construction, the combustibility of packaging materials, and the damageability of the stock. Ignition sources include electrical wiring and equipment, particularly refrigeration equipment, and heating and air conditioning systems.
All wiring must be well maintained and up to code for the occupancy. Pharmaceuticals are particularly vulnerable to loss by fire, smoke, and water. Even a small loss will result in all stock being condemned by the FDA due to possible contamination.
Items requiring temperature controls are subject to spoilage. Coolers and refrigeration units must be well maintained and replaced once they are no longer effective. Maintenance should be done on a regular basis with records retained.
Alarms should be in place to warn of power outage or shutdown. Backup generators should be available. Good housekeeping and fire controls are critical. Smoking should be prohibited. If there is a sprinkler system, heads must be located high enough to avoid accidental contact with forklifts.
Recharging of forklifts and maintenance of vehicles should be done in a separate, ventilated area away from combustibles. Drugs, particularly narcotics, are a target for thieves. Adequate security systems must be in place including alarms, security guards, lighting, and fences as appropriate for the location.
Business income and extra expense exposures are high. Recovering from a loss could require a lengthy time to rebuild the facility and purchase replacement refrigeration equipment. Business income from dependent properties is a concern since many drug distributors work with only one manufacturer.
Equipment breakdown exposures are high as temperatures must remain constant for refrigeration equipment. All equipment must be inspected and maintained on a regular basis. Back-up generators should be available. Additional coverage for spoilage and ammonia contamination should be considered as even a small power interruption could result in a large loss if drug products should spoil.
Inland marine exposure is from accounts receivable if the distributor offers credit to customers, computers for tracking inventory, contractors' equipment, goods in transit, and valuable papers and records for manufacturers' and customers' records. Duplicates must be kept of all data to permit easy replication in the event of a loss.
Contractors' equipment includes forklifts and hand trucks used for moving stored items. While goods may come to the warehouse via contract, common carriers or trains, goods are generally delivered to retailers on trucks owned by the distributor.
Goods in transit may be damaged by a collision or overturn. Due to the potential for theft, vehicles should be unmarked, have alarms, and be attended at all times. Sales representatives may carry sample stock to retailers.
Crime exposure is from employee dishonesty. Background checks, including criminal history, should be performed on all employees handling money. Warehouse operations involve a number of transactions and accounts that can be manipulated if duties are not separated.
There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements. Regular audits, both internal and external, are important in order to prevent employee theft of accounts.
Certain pharmaceuticals, particularly narcotics, are attractive because of their high street value. Good security systems should be in place to discourage employee theft. Physical inventories should be conducted at least annually.
Commercial auto exposure is moderate for the salespersons' fleet and delivery vehicles. There should be written policies on personal and permissive use of any vehicles provided to employees. All drivers must be well trained and have valid licenses for the type of vehicle being driven
MVRs must be run on a regular basis. Random drug and alcohol testing should be conducted. Vehicles must be well maintained, including refrigeration systems, with records kept in a central location.
What Does Drugs Wholesaler Distributor Insurance Cover & Pay For?
Drug wholesalers and distributors can be sued for various reasons, and insurance coverage can help protect them by covering the costs associated with lawsuits. Here are some common reasons for lawsuits and how insurance can help:
Product liability: If a drug causes harm or injury to a consumer due to manufacturing defects, design flaws, or inadequate warnings, the distributor can be held liable. Product liability insurance can help cover legal defense costs, settlements, and judgments related to such claims.
Negligent distribution: If a distributor is found to have acted negligently in the storage, handling, or transportation of drugs, resulting in damage or contamination, they can be sued. General liability insurance can help cover the costs of legal defense, settlements, and judgments related to these claims.
Regulatory violations: Distributors can be sued for violating regulations related to drug safety, licensing, or other compliance issues. Regulatory compliance coverage or professional liability insurance can help cover the costs associated with defending against these claims and paying any fines or penalties.
Breach of contract: If a distributor fails to fulfill the terms of a contract with a manufacturer, retailer, or another party, they can be sued for breach of contract. Commercial general liability insurance can help cover legal defense costs, settlements, and judgments related to these claims.
Intellectual property infringement: Distributors can be sued if they are found to have infringed on a patent, trademark, or copyright related to the drugs they are distributing. Intellectual property insurance can help cover legal defense costs, settlements, and judgments related to these claims.
Employee-related claims: Distributors can be sued for wrongful termination, discrimination, harassment, or other employment-related issues. Employment practices liability insurance (EPLI) can help cover the costs of legal defense, settlements, and judgments related to these claims.
Data breach and cyber liability: If a distributor's computer systems are hacked, and sensitive information is stolen or compromised, they can be sued for not adequately protecting the data. Cyber liability insurance can help cover the costs of legal defense, settlements, and judgments related to these claims, as well as expenses related to notification and credit monitoring for affected individuals.
For each of these examples, insurance can help pay for the costs associated with a lawsuit, including legal defense fees, settlements, and judgments. However, it's essential for distributors to have the appropriate coverage and policy limits in place to ensure adequate protection.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5122 Drugs, Drug Proprietaries, And Druggists' Sundries
- NAICS CODE: 424210 Drugs and Druggists' Sundries Merchant Wholesalers
- Suggested Workers Compensation Code(s): 8047 Store - Drug - Wholesale
Description for 5122: Drugs, Drug Proprietaries, And Druggists' Sundries
Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 512: Drugs, Drug Proprietaries, And Druggists' Sundries
5122 Drugs, Drug Proprietaries, And Druggists' Sundries: Establishments primarily engaged in the wholesale distribution of prescription drugs, proprietary drugs, druggists' sundries, and toiletries. Establishments primarily engaged in the wholesale distribution of surgical, dental, and hospital equipment are classified in Industry 5047.
- Biologicals and allied products-wholesale
- Blood plasma-wholesale
- Drug proprietaries-wholesale
- Druggists' sundries-wholesale
- Hair preparations-wholesale
- Medical rubber goods-wholesale
- Medicinals and botanicals-wholesale
- Medicine cabinet sundries-wholesale
- Patent medicines-wholesale
- Proprietary (patent) medicines-wholesale
- Razor blades-wholesale
- Razors, nonelectric-wholesale
- Toilet articles-wholesale
- Toilet preparations-wholesale
- Toilet soap-wholesale
- Toothbrushes, except electric-wholesale
Drugs Wholesaler Distributor Insurance - The Bottom Line
Drugs wholesaler distributor insurance polices can differ widely in both cost and coverage. If you are shopping for business insurance, or want to see if you have the right fit coverage, speak to an experienced broker to take a look at your business.
In many cases they can save you premium dollars and offer you better policy options than you currently have.
Additional Resources For Wholesale And Distribution Insurance
Read informative articles on wholesale distribution insurance. Distributors and wholesalers face specific risks including fire, flood and weather damage that can destroy products in the distribution center - and every part of the supply chain including late supplier shipments to unpaid invoices - can effect the entire operation.
- Air Conditioning And Heating
- Audio And Video Equipment
- Beer & Ale
- Cameras & Musical Instruments
- CDs, DVDs And Videos
- Dairy Products
- Dry Goods
- Electrical Appliances
- Electrical Equipment
- Electrical Supplies
- Electronic Equipment
- Greeting Cards
- Importer & Exporter
- Liquor Wholesaler
- Manufacturers Representative
- Motion Picture
- Plate Glass
- Plumbing Supplies
- Restaurant Equipment
- Roofing Materials
- Seed Merchants
- Theatrical Supplies
- Wholesale Florist
- Wholesaler Distributor
- Specialty Dealers And Distributors
The wholesale distribution industry plays a crucial role in the supply chain process, connecting manufacturers and retailers to customers. It involves the storage, transportation, and distribution of a wide range of products, including raw materials, finished goods, and equipment.
Wholesale and distribution operations have many of the same physical damage and property coverage concerns as warehouse operations. In both, the value of both real property and stocks of merchandise is very high. Loss control and other techniques appropriate to the types of merchandise involved are needed. For these reasons, adequate and appropriate property insurance coverages are important.
As with any business, the wholesale distribution industry is exposed to a variety of risks that can impact its operations and profitability. These risks can range from property damage and theft to liability claims and employee injuries.
Business insurance helps to protect a wholesale distribution company from these potential losses by providing financial protection in the event of unexpected events. It helps to cover the costs of repairs, replacements, and legal fees, as well as lost income and wages.
For example, if a warehouse fire destroys a large portion of a wholesale distributor's inventory, business insurance can help to cover the cost of replacing the lost goods and repairing the damaged property. Similarly, if a customer is injured on the company's premises, liability insurance can help to cover the cost of legal fees and settlement payments.
In addition to protecting the company's assets and financial stability, commercial insurance also helps to protect the company's reputation. If a company is sued or faces a major loss, it can damage its reputation and credibility in the industry. Business insurance helps to mitigate these risks and maintain a positive reputation.
Overall, the wholesale distribution industry needs business commercial insurance to protect against unexpected risks and losses, maintain financial stability, and protect the company's reputation. Without it, a company may face significant financial losses and potential legal liabilities that could impact its operations and profitability.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Accounts Receivable, Computers, Contractors' Equipment, Goods in Transit, Valuable Papers and Records, Employee Dishonesty, General Liability, Employee Benefits, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Signs, Computer Fraud, Forgery, Money and Securities, Cyberliability, Employment-Related Practices and Stop Gap Liability.