Anything can happen in your community pharmacy. A tornado can blow through and cause a lot of damage. A delivery driver might get in a fender bender. A customer might slip and fall. Or an employee might get injured. How would you pay if any of these happened?
Unplanned expenses like these are rough, which is why it’s vital to protect your valuable business assets with the right type of insurance. Business insurance for pharmaceutical companies is important, because you’ll find most other insurance companies have coverage forms that exclude a lot of what pharmacists do daily. So, make sure you’re getting the right kind of coverage for your pharmacy.
There are numerous ways things can go awry. Here is a list of available coverage options to determine which policies are best suited for your pharmacy:
Pharmacy Business Owners Policy (BOP)
With a business owners insurance policy, general liability coverage is rolled into a larger policy with several different pieces you can tailor to your company’s needs. It adds physical and intangible asset protection based on the size and type of your business and the options you select.
A business owner’s policy shields against:
- Damage to inventory, equipment, and other business property
- Lawsuits over customer injury or property damage on your premises
- Lawsuits related to faulty products
- Lawsuits related to advertising injuries
- Temporary closure
Pharmacy General Liability Insurance
This helps cover claims that your business caused, such as bodily injury or property damage to someone else’s belongings. For example, if one of your customers falls and injures themself inside your pharmacy, then a general liability policy will protect you from having to pay associated damages. This insurance will also protect you from liability over products you sell as well as protect your physical business assets.
Professional Liability Insurance
You have a lot to keep track of day in and day out at your pharmacy, so naturally, mistakes and accidents can happen. However, professional liability insurance, also called errors and omissions protection, will protect you from the expenses caused by professional mistakes.
Property and Casualty Insurance
This insures the building and business property within the building. This includes prescriptions, over-the-counter merchandise, improvements, and office furniture. This is insurance you’ll need if your pharmacy experiences loss due to a natural disaster or theft.
Commercial Property Insurance
This coverage helps protect your owned or rented building and equipment you use to run your pharmacy, including:
- Scales
- Shelves
- Pills and drugs
- Computer systems
Workers’ Compensation
If an employee is injured on the job, workers’ compensation will provide unlimited medical expense coverage and will provide loss of income protection while your employee is recovering. Most states require that businesses with employees carry worker’s compensation coverage.
Commercial Auto Insurance
This will cover any delivery vehicles your pharmacy has. It’ll provide protection in case the vehicle is damaged in an accident. It also protects your pharmacy from lawsuits against damage your driver caused to another party while using the vehicle.
Umbrella Insurance
If you want to increase liability limits on your auto, general liability, and professional insurance policies, this is it. Think of it this way: If your professional liability insurance has a $1 million limit and your umbrella policy has a $1 million limit, that gives you $2 million in coverage.
Cyber Liability Insurance
If your data is compromised, this insurance will protect your pharmacy. Also, if your pharmacy’s private health information is compromised by a hacker, cyber liability insurance will cover the fines and penalties associated with HIPAA and the cost of notifying everyone affected.
Employment Practice Liability Insurance
This insurance will cover your pharmacy if an employee sues for wrongful termination, discrimination, or harassment. While this isn’t usually covered by a general liability insurance policy, it can be built in at a nominal cost.
Business Interruption Insurance
Having to temporarily close your pharmacy can lead to long-term financial issues, especially since you depend on daily transactions. Business interruption insurance can reimburse your pharmacy for lost revenue and other expenses related to closure caused by a covered loss. So, if your pharmacy needs to close for several weeks for renovation after a fire, business interruption insurance would cover your lost profits and normal operating expenses, including payroll.
While you may be happy with your coverage from an agency that has experience with pharmacies, you shouldn’t blindly renew your policies year after year. While the coverage could remain flawless, your insurance company may be passing on unjustified rate increases that are cutting into your pharmacy’s bottom line. If you notice that happening, it’s time to shop around.
More articles from the June 2024 issue:
- The Art of Apologizing
- Adding Services to Your Pharmacy
- Needle-Free Weight Loss
- Big Pharma Companies and the Threat of Expired Patents
- Your In-Store Event
- Taking Charge of Obesity
- Drug-Induced Nutrient Deficiencies
- Protect Your Pharmacy
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and run by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
