Pharmacy Liability Insurance Policy Information
Pharmacy Liability Insurance. The role of pharmacies continues to expand, including providing consultations and vaccinations. With this expansion comes increased exposure for liability claims.
In a recent claim study, the two most common allegations against pharmacies were wrong drug and wrong dose. Together, these two allegations comprised 75% of all lawsuits against pharmacies.
Drug stores sell prescriptions and over-the-counter medications to customers. Operations can range from the small pharmacy that only fills prescriptions, to retail stores that offer pharmacy services along with the sale of sundries, to huge super or discount drug stores that sell all varieties of general merchandise.
Pharmacy's can be locally owned, attached to and related to physicians' offices, clinics, or hospitals, or part of a regional or national chain or franchise. Medical supplies and equipment rentals may be part of the operations. Lunch counters or cafeterias may be on premises.
Food items or snacks may be sold. Some will offer a variety of services that have little or no relationship to drug sales, such as cosmetic or beauty supplies or even beauty shops, shoe repair, or key duplication.
Alcoholic beverages may be sold for off-premises consumption. Some may offer health care services, including sports physicals and the administration of vaccines.
Most pharmacy liability insurance policies are in the form of a Business Owners Policy (BOP). A BOP typically offers small businesses coverage for property and liability risks in one package.
Pharmacy liability insurance protects your store from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked pharmacy insurance questions:
- What Is Pharmacy Liability Insurance?
- How Much Does Pharmacy Liability Insurance Cost?
- Why Do Pharmacies Need Insurance?
- What Type Of Insurance Do Pharmacies Need?
- What Does Pharmacy Liability Insurance Cover & Pay For?
What Is Pharmacy Liability Insurance?
Pharmacy liability insurance is a type of insurance coverage specifically designed for pharmacists and pharmacy businesses. It provides protection against legal liability for any claims arising from errors, omissions, or other incidents related to the dispensing of medication.
This type of insurance covers the cost of defending against a lawsuit, settlements, or judgments. Pharmacy liability insurance can protect against claims related to dispensing errors, incorrect dosages, adverse reactions to medications, and other issues that may arise in the course of a pharmacist's daily work.
How Much Does Pharmacy Liability Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 Pharmacy Liability Insurance policy for drug stores from $97 to $159 per month based on location, size, payroll, sales and experience.
Why Do Pharmacies Need Insurance?
Here are the reasons why pharmacies need insurance:
Protection against legal liability: Pharmacies face the risk of lawsuits from patients who may have suffered adverse effects from medication prescribed or dispensed by the pharmacy. Insurance provides protection against such legal liabilities.
Coverage for property damage: Pharmacies may also require coverage for property damage caused by natural disasters, fire, or other events. Insurance can help to protect the pharmacy against losses due to such events.
Coverage for product liability: Pharmacies may be held liable for defects in the medications they dispense. Insurance provides coverage for product liability and helps to protect the pharmacy against financial losses in the event of a lawsuit.
Protecting employees: Pharmacies may also require coverage for their employees in the event of on-the-job accidents or illnesses. This helps to protect the financial well-being of employees and can reduce the risk of lawsuits against the pharmacy.
Protection against theft or loss: Pharmacies hold a large amount of valuable medications, equipment, and other materials. Insurance can provide coverage for theft or loss of these items.
In conclusion, having insurance helps protect pharmacies from a variety of risks, including legal liabilities, property damage, product liability, employee accidents, and theft or loss.
What Type Of Insurance Do Pharmacies Need?
The aim of a pharmacy liability insurance policy is to ensure that if a claim is filed against you, you are protected - whether it be in court or at work. Some policies will cover attorney fees and other legal expenses, pay you for lost wages while taking time off work to defend yourself, and even offer reimbursement for licensing board issues.
Commercial General Liability - This coverage offers protection against the risks of running your pharmacy business. This provides protection against claims of bodily injury liability, property damage liability and even personal injury and advertising exposures for which your business may be liable. Slip-and-fall is a common type of claim.
Errors and Omissions Insurance - When running your pharmacy, it is important to consider the implications of other types of errors that can occur. Errors and omissions insurance - also known as professional liability can help provide you with the reassurance that you are covered for mistakes related to improper dosage or incorrect instructions with prescription drugs.
Business Auto - Commercial vehicle insurance is needed for your pharmacy if use any vehicles to run errands, pick up or drop off drugs or other good for sale.
Equipment Breakdown - Most pharmacies rely on computers and other specialized equipment to obtain details about their customers' medications and illnesses. If this equipment breaks down it can be costly in the form of suspended business operations as well as repair or replacement. A pharmacy liability insurance policy can protect you from having to shoulder those costs.
Employee Dishonesty - This protects your business from losses due to embezzlement, fraud and other forms of employee dishonesty. Because of the higher risks of addiction for certain opioid drugs, stolen prescription drugs are not a rare occurrence is pharmacies.
Data Breach - Because health-related businesses like pharmacies and drug stores must store a great deal of confidential patient information in electronic files, your customers could be at risk for identity theft or fraud if your system is ever penetrated by criminals.
This pharmacy liability insurance coverage can reimburse you if you incur charges related to notifying your patients of a breach, offering them credit-monitoring services, recovering your own damaged electronic data and more.
Drug Store's And Pharmacies' Risks & Exposures
Premises liability exposure comes from slips and falls due to public access to the premises. Floor coverings must be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure. Extra care must be taken to provide adequate aisle space and waiting areas as some customers may be sick or have impaired mobility.
The rental of medical equipment can result in additional injuries to customers who already have health problems. Equipment must be inspected and maintained after each use. 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 the business is open after dark, there should be adequate lighting and appropriate security for the area. Personal injury exposure can arise from invasion of customers' privacy should confidential medical information be released to unauthorized sources.
There is also the exposure from apprehending and detaining suspected shoplifters. The use of closed-circuit camera systems prevents such incidents from evolving into a "he said, she said" situation. Employees must be trained to deal with all such delicate situations properly.
Products and professional exposure are tied together. The training, experience, background, and expertise of anyone handling and dispensing of drugs are very high concerns and need thorough review. Most states require that only health care professionals with appropriate credentials be permitted to issue prescriptions. However, recent legislation has opened prescription-writing to druggists in certain states, substantially increasing the exposure to loss in those states.
Some drugstores now offer limited health care services including screenings and the administrating of vaccines. If performed by an employee, proper licensure is required. If performed by a vendor, certificates of insurance showing professional liability are required.
If liquor is sold, employees must be trained to verify that customers are not underage and to recognize signs of intoxication.
Workers compensation exposure is due to lifting which can cause back injury, hernias, sprains, and strains, and from slips and falls. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting. Shelves should be easily accessible for storage. Stepladders should be available.
Housekeeping in storage areas is vital to prevent trips and falls. In any retail business, hold-ups are possible. Employees should be trained to respond in a prescribed manner. Cooking operations can result in cuts, slips, falls, and burns. Delivery drivers may be subject to robbery if they transport high value street drugs.
Property exposure may be low if ignition sources are limited to electrical wiring, heating and cooling equipment. Oxygen tanks can explode and should be kept away from heat sources. If there is food service, cooking equipment must be properly protected with fire extinguishers close at hand. If a fire should occur, the loss could be substantial as the FDA requires most drug and alcohol stocks exposed to fire or smoke to be destroyed due to the possibility of contamination.
Theft is a major exposure due to the amount of narcotics and other popular street drugs kept on hand, liquor and tobacco products. Individual items may be shoplifted. Appropriate security measures must be taken including physical barriers to prevent entrance after hours and an alarm system that reports directly to a central station or the police department.
Business interruption exposure can be high if alternative facilities are not available after a loss.
Crime exposures are from employee dishonesty and theft of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be separation of duties between persons handling deposits and disbursements and handling bank statements. Receipting, inventory monitoring, and regular auditing are important.
Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made regularly to prevent a buildup of cash on the premises. Narcotics should be inaccessible to customers and non-pharmacy employees and under constant surveillance to reduce the possibility of inventory shortage.
Inland marine exposures are from accounts receivable if the store offers credit, computers to transact sales and monitor inventory, and valuable papers and records due to customers' and vendors' records. Backup copies of all records, including computer records, should be made and stored off premises.
Business auto exposure may be limited to hired non-owned for employees running errands. If delivery services are provided, all employees driving vehicles must have valid licenses and acceptable MVRs. Vehicles must be regularly maintained with records kept.
What Does Pharmacy Liability Insurance Cover & Pay For?
Pharmacy liability claims arise when a pharmacy fails to provide safe and accurate medication to a patient, resulting in harm or injury. Here are some examples of pharmacy liability claims and how pharmacy liability insurance can help pay for the lawsuit:
Dispensing the wrong medication: If a pharmacy dispenses the wrong medication to a patient, and the patient suffers harm or injury as a result, the patient may file a lawsuit against the pharmacy. Pharmacy liability insurance can cover the costs of defending the lawsuit, including legal fees, court costs, and settlements or judgments.
Incorrect dosage: If a pharmacy provides medication to a patient with an incorrect dosage, it can result in serious harm or injury. Pharmacy liability insurance can help pay for any resulting lawsuits by covering legal expenses and settlement or judgment costs.
Failure to warn of potential side effects: If a pharmacy fails to warn a patient of potential side effects of medication, and the patient experiences harm or injury as a result, the patient may file a lawsuit against the pharmacy. Pharmacy liability insurance can help pay for any resulting lawsuits by covering legal expenses and settlement or judgment costs.
Product liability claims: If a pharmacy sells a defective product that causes harm or injury to a patient, the patient may file a product liability claim against the pharmacy. Pharmacy liability insurance can help pay for the costs of defending the claim, including legal fees, court costs, and settlements or judgments.
In summary, pharmacy liability insurance can help protect pharmacies from financial losses resulting from lawsuits arising from dispensing errors, incorrect dosages, failure to warn of side effects, and product liability claims. By having the right insurance coverage, pharmacies can protect themselves and their patients from the risks associated with medication errors.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5912 Drug Stores and Proprietary Stores
- NAICS CODE: 446110 Pharmacies and Drug Stores
- Suggested Workers Compensation Code(s): 8045 Store - Drug - Retail
5912: Drug Stores and Proprietary Stores
Division G: Retail Trade | Major Group 59: Miscellaneous Retail | Industry Group 591: Drug Stores And Proprietary Stores
5912 Drug Stores and Proprietary Stores: Establishments engaged in the retail sale of prescription drugs, proprietary drugs, and non-prescription medicines, and which may also carry a number of related lines, such as cosmetics, toiletries, tobacco, and novelty merchandise. These stores are included on the basis of their usual trade designation rather than on the stricter interpretation of commodities handled. This industry includes drug stores which also operate a soda fountain or lunch counter.
- Drug stores-retail
- Proprietary (non-prescription medicines) stores-retail
Pharmacy Liability Insurance - The Bottom Line
It's hard to set a baseline rate for pharmacy insurance because it's based on a variety of factors unique to you and your company. Things like security features, liability issues, and the services that you provide will make a difference in the coverage you need, which ultimately determines your premium. Researching options and collecting quotes is your best bet before you buy.
When purchasing a pharmacy liability insurance policy, people should always buy from an agent who understands and can explain all the details of the policy and is also familiar with the pharmacy business. Another thing to look for is who and what is insured under the policy.
This is important as the pharmacy owner will want to know who exactly is insured under their policy and what they are covered against.
The pharmacy industry is rapidly changing and expanding. With new and challenging practice areas come a proportional increase in exposure to professional liabilities. Pharmacy insurance is designed to safeguard your livelihood, your business, and your peace of mind.
Additional Resources For Retail Insurance
Read valuable small business retail insurance policy information. In a retail business, you need to have the right type of commercial insurance coverage so that your store, employees, and inventory are protected.
- Adult Novelty
- Antique Dealers
- Appliance & Electronics Store
- Army Navy Surplus Stores
- Art Dealers
- Art Gallery
- Arts & Crafts Supply Stores
- Bicycle Shop
- Boat Dealers
- Book Store
- Bridal Shop
- Candy Confectionery Store
- Carpet Store
- Cell Phone Stores
- Clothing Store
- Collectibles Memorabilia Store
- Consignment Stores
- Convenience Store
- Cosmetics Store
- Costume Stores
- Dry Cleaning
- Embroidery Services
- Equipment Rental
- Fabric Stores
- Fish Markets
- Flea Markets
- Funeral Home
- Furniture Store
- Gift Store
- Greeting Card Stores
- Hardware Store
- Harness & Saddle Shops
- Home Improvement Store
- Infant, Baby & Children's Clothing Stores
- Jewelry Store
- Lamp Stores
- Lingerie Store
- Luggage Store
- Meat Market & Butcher Shop
- Men's Clothing Stores
- Music Store
- Office Supply Store
- Paint & Wallpaper Store
- Pawn Shop
- Pet Store
- Pharmacy Liability
- Plumbing Supplies Fixtures Store
- Poultry Dealers
- Rent To Own Stores
- Scrap Metal Dealers
- Sewing Store
- Shoe Store
- Sporting Goods Store
- Stationary Store
- Thrift Store
- Ticket Agency
- Tire Store
- Tobacco Store
- Toy Store
- Travel Agency
- Trophy Stores
- Tuxedo And Formal Wear Rental Store
- Vending Machine Operators
- Wig Store
- Women's Clothing Stores
- Specialty Retail Stores
The retail industry is a vital sector of the economy, providing goods and services to consumers across the globe. It is also a sector that is constantly evolving, with new technologies and trends emerging on a regular basis.
Despite its importance, the retail industry is not without its risks. Retail businesses face a variety of threats, including theft, damage to property, and liability issues. These risks can have significant financial consequences for retail businesses, which is why commercial insurance is so important.
Insurance can provide retailers with protection against financial loss resulting from unforeseen events. For example, if a retail store is damaged by a natural disaster, insurance can help cover the cost of repairs and help the business get back on its feet. Similarly, if a retail employee is injured on the job, insurance can help cover their medical expenses and any lost wages.
In addition to protecting against financial loss, commercial insurance can also help retail businesses protect their reputation. If a retail business is sued or faces other legal challenges, insurance can provide financial support and legal representation. This can help to protect the business's reputation and maintain customer trust.
Overall, insurance is an essential component of a successful retail business. It helps to safeguard against financial loss and protect against potential legal challenges, which can be especially important for smaller businesses that may not have the resources to absorb these types of losses.
By investing in business insurance, retail businesses can ensure that they are well-equipped to handle the many challenges that come with operating in this dynamic industry.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Equipment Breakdown, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Bailees Customers, Goods in Transit, Jewelers Block, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.