Pharmacy businesses play a crucial role in the healthcare industry, providing prescription medications and other health-related products to customers. Like any other business, pharmacies face risks that could lead to financial losses. This article will discuss the importance of having insurance for your pharmacy, the different types of insurance coverage you may need, factors affecting insurance costs, and tips for finding the right insurance policy for your business.
- 6 best pharmacy business insurance companies
- Why do pharmacies need business insurance?
- Types of insurance coverage needed for a pharmacy
- Does a pharmacist working for a pharmacy need to have their own malpractice insurance policy and why?
- How much does pharmacy business insurance cost?
- Tips for finding cheap insurance policy for your pharmacy
6 best pharmacy business insurance companies
Here are the 6 best providers that we recommend for pharmacy business insurance. Each has their own pros and cons and may be best suitable for different segments of pharmacies.
- Simply Business: Best for comparing several quotes of all types of coverage a pharmacy may need
- NEXT: Best for affordable general liability insurance policy and reasonable rates
- The Hartford: Best for comprehensive Business Owners Policy (BOP) policy for independent pharmacies
- Hiscox: Best for a combined policy of general liability insurance and professional liability insurance for pharmacies
- State Farm: If you want to combine your personal insurance with your pharmacy business insurance through the same State Farm agent that you trust
- Smart Financial: Best if you prefer working with a local, independent, and knowledgeable agent
Simply Business: Best for comparing several quotes of all types of coverage a pharmacy may need
Simply Business is an excellent choice for pharmacy owners who want to compare several quotes from top insurance carriers. They offer a user-friendly online platform that makes it easy to find and compare insurance policies tailored to the specific needs of a pharmacy business. By providing access to a range of coverage options, Simply Business can help you find the best policy for your pharmacy at a competitive price.
Pharmacy business insurance coverage:
- General liability insurance
- Professional liability insurance
- Business property insurance
- Business interruption insurance
- Workers’ compensation insurance
Pros:
- Easy-to-use online platform for comparing quotes
- Access to multiple top insurance carriers
- Customizable coverage options to suit your pharmacy’s needs
- Highly rated customer service
Cons:
- Not a direct insurer; acts as a broker
- Some customers may prefer working directly with an insurance carrier
NEXT: Best for affordable general liability insurance policy and reasonable rates
NEXT is a great choice for pharmacy owners looking for affordable general liability insurance coverage. They specialize in providing insurance for small businesses and have a streamlined digital platform that allows you to easily purchase and manage your policy online. With competitive pricing and an efficient online process, NEXT is a solid option for pharmacies seeking budget-friendly general liability insurance.
Pharmacy business insurance coverage:
- General liability insurance
- Professional liability insurance (available through partnership with other carriers)
- Workers’ compensation insurance
Pros:
- Affordable general liability insurance rates
- Easy-to-use digital platform for purchasing and managing policies
- Tailored insurance options for small businesses
- Fast quote process and policy issuance
Cons:
- Limited coverage options compared to some competitors
- Professional liability insurance only available through partnerships
The Hartford: Best for comprehensive Business Owners Policy (BOP) policy for independent pharmacies
The Hartford is an established insurance company known for its comprehensive Business Owners Policy (BOP) that’s designed to meet the unique needs of independent pharmacies. With a strong focus on small business insurance, The Hartford offers a range of coverages and services to protect your pharmacy and help you manage risks.
Pharmacy business insurance coverage:
- Business Owners Policy (BOP) customized for pharmacies
- General liability insurance
- Professional liability insurance
- Business property insurance
- Business income insurance
- Equipment breakdown insurance
- Data breach coverage
Pros:
- Comprehensive BOP tailored for independent pharmacies
- Strong reputation and financial stability
- Wide range of coverage options and endorsements
- Dedicated support and risk management services for small businesses
Cons:
- May not be the cheapest option available
- Some customers may find the application process more time-consuming compared to digital-first insurers
Hiscox: Best for a combined policy of general liability insurance and professional liability insurance policy for pharmacies
Hiscox is a leading insurance provider that specializes in small business insurance, including coverage for pharmacies. They offer both general liability insurance and professional liability insurance policies tailored to the specific needs of your pharmacy. With a reputation for excellent customer service and flexible coverage options, Hiscox is a great choice for pharmacies seeking comprehensive liability protection.
Pharmacy business insurance coverage:
- General liability insurance
- Professional liability insurance
Pros:
- Specializes in small business insurance, including pharmacies
- Offers both general and professional liability insurance policies
- Highly rated customer service
- Flexible coverage options and limits
Cons:
- May not be the most affordable option for some businesses
- BOP coverage may be more limited compared to competitors
State Farm: If you want to combine your personal insurance with your pharmacy business insurance through the same State Farm agent that you trust
State Farm is a well-known insurance company that offers a wide range of personal and commercial insurance products. If you already have a trusted State Farm agent for your personal insurance needs, you can also work with them to secure business insurance for your pharmacy. State Farm’s agents can help you navigate the various coverage options and tailor a policy to fit the unique needs of your pharmacy business.
Pharmacy business insurance coverage:
- General liability insurance
- Professional liability insurance
- Business property insurance
- Business income insurance
- Workers’ compensation insurance
Pros:
- Ability to combine personal and business insurance with a trusted agent
- Local agents provide personalized service
- Wide range of coverage options available
Cons:
- Pricing and coverage options may not be as competitive as specialized business insurers
- Not a specialized pharmacy business insurance provider
Smart Financial: Best if you prefer working with a local, independent, and knowledgeable agent
Smart Financial is an insurance brokerage firm that connects you with local, independent agents who can help you find the right pharmacy business insurance policy. By working with a knowledgeable local agent, you can receive personalized advice and recommendations based on your specific needs. Smart Financial’s agents work with multiple insurance carriers, allowing you to compare quotes and find the best coverage and price for your pharmacy business.
Pharmacy business insurance coverage:
- General liability insurance
- Professional liability insurance
- Business property insurance
- Business interruption insurance
- Workers’ compensation insurance
Pros:
- Access to local, independent agents with specialized knowledge
- Ability to compare quotes from multiple insurance carriers
- Personalized advice and recommendations tailored to your pharmacy’s needs
Cons:
- Not a direct insurer; acts as a broker
- The quality of service may vary depending on the individual agent
Why do pharmacies need business insurance?
In addition to covering various risks and accidents as we are discussing below, pharmacies need business insurance for several other reasons:
- Legal requirements: Some types of insurance, such as workers’ compensation and general liability, may be legally required for pharmacies, depending on the jurisdiction. Meeting these legal obligations is crucial to avoid penalties or business interruptions.
- Contractual obligations: Pharmacies may enter into contracts with suppliers, landlords, or other businesses that require specific insurance coverage. Having adequate insurance in place can help pharmacies fulfill these contractual obligations and avoid potential disputes.
- Business credibility: Having business insurance demonstrates a commitment to responsible business practices, which can enhance a pharmacy’s credibility and reputation among customers, suppliers, and partners.
- Financial stability: Business insurance provides financial protection for a pharmacy in the event of a loss or claim, ensuring that the business can recover and continue operations without facing significant financial setbacks.
- Employee protection: Providing insurance coverage for employees, such as workers’ compensation or health insurance, can help protect their wellbeing and foster a positive work environment. This can lead to increased employee satisfaction, loyalty, and productivity.
- Business growth and expansion: As a pharmacy grows or expands its operations, it may face new risks and liabilities. Having comprehensive business insurance can help address these challenges and support the pharmacy’s growth and development.
Overall, having the right business insurance in place is a crucial aspect of managing a pharmacy’s risks and ensuring its long-term success and sustainability.
Types of insurance coverage needed for a pharmacy
General liability insurance
General liability insurance is essential for any business, including pharmacies. It provides coverage for incidents related to:
Bodily injury
If a customer slips and falls in your pharmacy, general liability insurance can help cover medical expenses and legal costs if the customer decides to sue your business.
Property damage
If your pharmacy accidentally damages a customer’s property, such as by breaking their prescription glasses, general liability insurance can cover the cost of repair or replacement.
Personal and advertising injury
General liability insurance can also protect your pharmacy from claims of libel, slander, or copyright infringement in your advertising materials.
Professional liability insurance (Pharmacists’ Malpractice Insurance)
Pharmacies need professional liability insurance to protect against potential errors and omissions in the course of their work, including:
Dispensing errors
If your pharmacy mistakenly provides a customer with the wrong medication or dosage, professional liability insurance can help cover the costs of medical treatment and legal defense.
Drug interaction issues
Pharmacists are responsible for checking possible drug interactions. If a pharmacist fails to identify a harmful drug interaction, professional liability insurance can cover the resulting damages.
Commercial property insurance
Commercial property insurance is crucial for protecting your pharmacy’s physical assets, such as the building and its contents. It typically includes:
Building coverage
This coverage helps repair or replace your pharmacy’s building in case of damage caused by events like fire, vandalism, or natural disasters.
Contents coverage
Contents coverage protects the items inside your pharmacy, including inventory, equipment, and fixtures, in case of theft or damage.
If you rent a space for your pharmacy, it is likely that your commercial landlord will require you to have commercial property coverage as part of the lease requirements.
Business interruption coverage
If a covered event forces your pharmacy to temporarily close, business interruption coverage can help cover ongoing expenses, such as employee wages and rent, during the closure.
Business Owners Policy (BOP):
BOP insurance is a bundled policy that helps pharmacies save money instead of buying several individual policies:
- Combines general liability and commercial property insurance in one package
- Often includes business interruption coverage, which compensates for lost income and operating expenses in case of a covered event (e.g., fire, theft)
- Can be more cost-effective than purchasing separate policies for each type of coverage
- Can also be customized with additional endorsements to address unique risks
Workers’ compensation insurance
Pharmacies must carry workers’ compensation insurance to cover:
Employee injuries: If an employee sustains an injury while working, workers’ compensation insurance can help cover medical expenses and lost wages.
Occupational illnesses: Workers’ compensation also covers employees who develop work-related illnesses, such as respiratory issues from handling certain medications.
Cyber liability insurance
With pharmacies increasingly relying on electronic systems to store sensitive customer data, cyber liability insurance has become more important than ever. It covers:
Data breaches
If your pharmacy experiences a data breach, cyber liability insurance can help cover the costs of notifying affected customers, providing credit monitoring services, and handling any resulting legal claims.
Cyberattacks
In case of a cyberattack, such as ransomware, cyber liability insurance can cover the costs of recovering your data and systems.
Employment practices liability insurance
Employment practices liability insurance protects your pharmacy from claims related to:
- Discrimination: If an employee or job applicant accuses your pharmacy of discrimination, this coverage can help cover legal costs and any resulting settlements.
- Wrongful termination: In case a former employee sues your pharmacy for wrongful termination, employment practices liability insurance can provide financial protection.
- Harassment: This coverage can also protect your pharmacy from claims of workplace harassment.
Business auto insurance
If your pharmacy owns or operates vehicles for deliveries or other business purposes, you’ll need business auto insurance to cover:
- Vehicle accidents: This coverage helps pay for repair or replacement costs if one of your pharmacy’s vehicles is involved in an accident.
- Liability: Business auto insurance also covers liability claims related to vehicle accidents, such as medical expenses and property damage incurred by third parties.
- Medical payments: In case an employee or passenger is injured in an accident involving a pharmacy-owned vehicle, this coverage can help pay for medical expenses.
- Uninsured/underinsured motorist coverage: If your pharmacy vehicle is involved in an accident with a driver who lacks adequate insurance, uninsured/underinsured motorist coverage can help cover your costs.
Does a pharmacist working for a pharmacy need to have their own malpractice insurance policy and why?
A pharmacist working for a pharmacy should strongly consider having their own pharmacist malpractice insurance policy, also known as professional liability insurance, for several reasons:
- Employer coverage may not be enough: While the pharmacy’s insurance policy might provide some level of professional liability coverage for its employees, it may not be sufficient to cover all potential claims or may have limitations on the coverage. Having an individual policy ensures that the pharmacist has adequate protection tailored to their specific needs.
- Legal defense and peace of mind: In case of a lawsuit or claim against the pharmacist, having an individual malpractice insurance policy provides legal defense and financial protection, giving the pharmacist peace of mind knowing they are covered in the event of an incident.
- Protection in case of employer coverage lapse: If the pharmacy’s insurance policy lapses or is canceled for any reason, the pharmacist could be left without coverage. Having an individual policy ensures continuous protection.
- Portable coverage: If the pharmacist changes jobs or starts working at multiple locations, having an individual malpractice insurance policy allows them to maintain consistent coverage, regardless of their employer or work situation.
- Control over policy limits and coverage: With an individual policy, the pharmacist can choose coverage limits and tailor the policy to their specific needs, ensuring they have the appropriate protection in place.
Overall, having an individual malpractice insurance policy offers pharmacists additional protection and control over their coverage, safeguarding their professional reputation and financial well-being.
When a pharmacist gets sued, are they covered primarily by the pharmacy’s professional liability insurance policy or their own policy?
When a pharmacist gets sued, the primary source of coverage is typically the pharmacy’s professional liability insurance policy, as the pharmacy is likely to be named in the lawsuit along with the pharmacist. The pharmacy’s policy is designed to protect both the business and its employees, including pharmacists, against claims arising from professional services provided.
However, the pharmacy’s policy may have limitations, exclusions, or insufficient coverage limits, which is where the pharmacist’s individual professional liability insurance policy comes into play. The individual policy acts as a secondary source of coverage and can provide additional protection in situations where the pharmacy’s policy is inadequate or exhausted.
In summary, the pharmacy’s professional liability insurance policy is usually the first line of defense when a pharmacist is sued, but the pharmacist’s own policy can provide valuable additional protection if needed. It is essential for pharmacists to understand the coverage provided by their employer and consider obtaining an individual policy to fill any potential gaps in coverage.
How much does pharmacy business insurance cost?
As we know from above, a pharmacy may need several types of insurance coverage. The more policies they have, the more they have to pay. The most popular insurance policy that all pharmacies have is general liability insurance.
The average cost of a general liability insurance policy for pharmacies is $78 per month, or $936 per year. Most pharmacies pay between $52 to $186 for their general liability insurance coverage.
Keep in mind that these are just the average. Your rates will be different. To find the cheapest quote for your pharmacy, be sure to shop around with a few companies or work with a top broker like Simply Business or Smart Financial to compare several quotes.
Factors affecting pharmacy insurance costs
Location
The location of your pharmacy can influence insurance costs, as areas prone to natural disasters or with higher crime rates may result in higher premiums.
Business size and revenue
Larger pharmacies with more employees and higher revenues may face higher insurance costs due to increased risk exposure.
Claims history
Pharmacies with a history of insurance claims may face higher premiums, as insurers view them as higher risk.
Coverage limits and deductibles
Higher coverage limits and lower deductibles can result in higher insurance premiums.
Tips for finding cheap insurance policy for your pharmacy
Assess your risks
Identify the specific risks your pharmacy faces and ensure the insurance policy you choose addresses these risks.
Compare quotes from multiple insurers
Shopping around and comparing quotes from multiple insurance providers can help you find the best coverage at the most competitive price.
Work with an insurance broker
An experienced insurance broker can help you navigate the insurance market, find the right coverage for your pharmacy, and potentially negotiate better rates.
Regularly review and update your coverage
Your pharmacy’s needs and risks may change over time. Regularly review and update your insurance coverage to ensure it remains adequate and relevant.
FAQs for pharmacy business insurance:
What types of insurance coverage do pharmacies typically need?
Pharmacies need various types of insurance coverage to protect against potential risks, including general liability, commercial property, professional liability, workers’ compensation, and business interruption insurance. The specific coverage required depends on factors such as location, size, and services offered by the pharmacy.
How much does pharmacy business insurance cost?
The cost of pharmacy business insurance varies depending on factors such as the size of the pharmacy, location, coverage limits, and deductible amounts. To get an accurate estimate of the cost, it’s best to consult with an insurance agent or broker who can provide customized quotes based on your specific needs and circumstances.
Are pharmacies required by law to have business insurance?
While there may not be a specific law requiring pharmacies to have business insurance, certain types of coverage, such as workers’ compensation, are legally required in most states. Additionally, landlords may require commercial renters insurance as part of lease agreements, and professional organizations may require professional liability coverage for membership.
What factors should I consider when choosing an insurance provider for my pharmacy?
When selecting an insurance provider, consider factors such as the provider’s financial stability, reputation, customer service, and the range of coverage options available. Comparing quotes from multiple providers can help you find the best coverage at the most competitive price for your pharmacy’s needs.
Can I bundle different types of insurance coverage for my pharmacy to save on premiums?
Yes, bundling multiple insurance policies with a single provider can often lead to discounts on premiums. A Business Owners Policy (BOP) is one example of a bundled insurance product that combines general liability, commercial property, and business interruption coverage, potentially offering cost savings and convenience.
How can I minimize the risks my pharmacy faces and potentially lower my insurance costs?
Implementing risk management strategies can help reduce the likelihood of claims and potentially lower your insurance costs. These strategies may include employee training, implementing safety protocols, securing inventory and property, and regularly reviewing and updating your insurance coverage to ensure it remains adequate as your business evolves.
Conclusion
Pharmacy business insurance is essential for protecting your business from a wide range of risks, including liability claims, property damage, and employee injuries. By understanding the various types of coverage available and the factors affecting insurance costs, you can make informed decisions about the right insurance policy for your pharmacy. Don’t hesitate to consult with an insurance broker or agent to ensure you have the most comprehensive and cost-effective coverage for your specific needs.
