Are you a pharmacy? Here is what you must know about insurance

There are numerous challenges involved in running a pharmacy business. Distributing medicines and drugs carries some risk. A minute mistake can result in health issues for the customer. Negligence and mistakes can even prove fatal in the pharmacy business, and such grave errors can result in heavy financial burdens and other legal issues.

As it happens, retail chains dominate the US pharmacy and drug landscape, but there are a host of independent, self-owned and operated pharmaceutical stores serving customers in their markets too. Here are some facts from the industry:

  • The US holds over 45% of the global pharmaceutical market. It is a $446 billion industry
  • Wikipedia says, there are approximately 67,000 pharmacies in the United States. Almost half (33,000) are located within drug stores, grocery stores, hospitals, department stores, medical clinics, universities, nursing homes, prisons, and other such facilities. The rest are said to be independent ot privately owned.

Pharmacy and Insurance

The unique nature of the pharmacy business creates some unique requirements for the insurance cover they need. Generic insurance policies may not be able to provide for all the specific requirements of a pharmacy. Owing to this, insurance companies carved out specialized insurance covers for the pharmaceutical businesses in the 1980s. In fact, the pharmacy and drug industry was the first industry to have a customized insurance cover for its businesses. 

That said, irrespective of the size of the business, every pharmacy needs an insurance cover for unforeseen contingencies.

Usually, the pharmacy insurance provides cover over for several aspects of the business like:

  1. Property Insurance: The basic coverage that every business requires to deal with any loss occurring due to damage to the property.
  2. Liability Insurance: It offers coverage from legal suits from others due to your business activities, products and services or damage caused to their property.
  3. Professional Liability for Business: This cover is specifically meant for the business entity, the owner, and its employees. It provides coverage for any negligence on the part of the business, owner or the employees.
  4. Crime Coverage: As the name suggests, this provides coverage against any criminal activities on the premises like forgery, break-ins, hold-ups, dishonest activities by an employee, and others, depending upon the policy limits.
  5. Boiler and Machinery Insurance: Despite the term, this doesn’t apply only to boilers. Rather this coverage applies to damage, direct or indirect, caused to any machinery and equipment in the pharmacy including IT and climate control systems.

That apart, there may also be coverage available for the materials within the pharmacy, some of which may be perishable without refrigeration and run the risk of becoming unusable after a loss of power following some weather event, for instance.

Types of Pharmacy Insurance Coverage options

Every pharmacy has different needs and seeks to address different requirements from its insurance cover. These are dependent upon the nature and size of the business.

Here are some types of insurance coverage options that you can choose from:

  1. General Liability

General liability cover is the basic insurance cover that provides coverage against claims of any physical injury or property damage along with coverage for products and operations.

  1.   General Liability + Professional Liability

The standard insurance coverage includes all the benefits of the basic insurance, i.e. General Liability, and provides additional coverage under Professional Liability that includes:

  • Professional negligence
  • Druggist Liability
  • Errors on the part of sub-contractors
  • Claims against any previously contracted works
  1. Business Owners Insurance for Pharmacy (BOP) + Workers’ Compensation:

The Business Owners Insurance for a Pharmacy (BOP) offers a customized insurance bundle for pharmacy owners. The BOP combines features from general liability insurance, property insurance and also provides cover against workers’ compensation which includes:

  • Cover against injury caused to workers on the job
  • Compensation for lost wages
  • Medical insurance for the workers
  1. Custom Insurance Cover

As the name suggests, this insurance cover offers flexibility to the business owner to create a customized insurance cover specific to the needs of their business. Under the custom insurance cover, depending on the requirements, you could incorporate various insurance covers such as general liability, BOP, property liability, cyber liability, protection against data or whatever is the need of the business.

Choosing the right insurance option is critically important for a pharmacy. But this can be a tedious task. To make it easier for you to decide the option to go with, talk to an agency. They will first try to understand your needs and the situation of the business. After that assessment, they will help you define the risks that you must protect yourself from. It’s almost like they have the knowledge to diagnose what’s troubling you and the skill to prescribe just the right medicine and dose for you! Perhaps that’s familiar?