5 Major Risks Pharmacies Face and the Insurance That Covers Them
Operating a pharmacy puts you in a unique position: you are a retailer, a healthcare provider, and a custodian of sensitive data all at once. This means your liability exposure is much higher than average. While a retailer might worry about a customer tripping over a rug, you have to worry about that plus the potentially life-altering consequences of a dispensing error.
Because of this heightened responsibility and the regulations that come with it, securing the right insurance for pharmacy businesses is a critical safeguard for your livelihood. To help you navigate the world of liability, we’ve broken down the five most significant risks pharmacies face today and the specific policies designed to protect you against them.
1. Medication Errors and Professional Liability
The core of your business—dispensing medication—is also your biggest source of risk. Even with the most rigorous checks in place, human error is always a possibility. A wrong dosage or an incorrect instruction can lead to severe health complications for a patient.
Insurance Solution: Professional Liability (E&O)
Pharmacists’ Errors & Omissions (E&O) insurance, also known as professional liability insurance, provides coverage for claims of negligence, mistakes, or failure to deliver services as promised. It is important to note that a general liability policy does not cover professional errors, since it is primarily designed to cover physical injuries or damage.
2. Customer Slip-and-Fall Accidents
Despite your specialized services, you still operate a physical location with foot traffic. A customer might slip on a wet floor near the entrance or trip over a display in the aisle. These common accidents can lead to expensive lawsuits and medical bills.
Insurance Solution: General Liability Insurance
General Liability insurance is the bedrock of protection for physical injuries that occur on your premises. It covers the medical expenses of the injured party and your legal fees if they decide to sue.
3. Prescription Data Breaches
Pharmacies possess a treasure trove of sensitive personal and medical information. The healthcare industry consistently incurs the highest average data breach costs of any sector, topping nearly $11 million per incident in recent years. Criminals target pharmacies specifically because patient records are valuable on the black market.
Insurance Solution: Cyber Liability Insurance
Standard business policies rarely cover digital crimes. Cyber liability insurance is essential for pharmacy business owners because it helps cover the costs associated with a breach, including notifying patients, paying for credit monitoring services, and managing the resulting legal fallout.
4. Theft, Robbery, and Inventory Loss
Holding cash and controlled substances makes pharmacies a prime target for both internal theft and external crime. You face the risk of armed robbery, burglary after hours, and even employee dishonesty regarding inventory.
Insurance Solution: Commercial Property and Crime Insurance
Commercial property insurance protects physical assets like your building, inventory, and equipment from fire or break-ins. However, stolen cash or employee theft typically require specific crime insurance. When planning insurance for pharmacy businesses, ensuring you have coverage for employee dishonesty is a smart move to protect your bottom line.
5. Employee Injuries
Your staff spends long hours on their feet, performs repetitive motions like counting pills or typing, and often lifts heavy boxes of stock. These activities create a risk for workplace injuries, from chronic back pain to acute accidents.
Insurance Solution: Workers’ Compensation
Workers’ Compensation insurance is mandatory in most states and pays for the medical treatment and lost wages of employees injured on the job. It often also includes employer’s liability insurance, which protects your business if an employee sues you over their injury.
Other Essential Coverages to Consider
Beyond the top five risks, a solid strategy for insurance for pharmacy businesses should keep other potential gaps in mind:
- Business Interruption Insurance: If a fire or disaster forces you to close temporarily, this replaces lost income so you can pay bills and payroll.
- Commercial Umbrella Insurance: This provides an extra layer of liability protection that kicks in when the limits of your underlying policies are exhausted.
- Employment Practices Liability Insurance (EPLI): This protects you against claims from employees regarding harassment, discrimination, or wrongful termination.
Protect Your Pharmacy with Bethany Insurance
The risks involved in pharmacy management are high, but they are manageable with the right partner. Don’t wait for a claim to find out if you are fully protected.
Our team at Bethany Insurance specializes in identifying the unique exposures of the healthcare retail sector and building custom solutions to match. Get a quote for your pharmacy today, with Bethany Insurance.
