Pharmacy Business Insurance
Getting business insurance for your pharmacy is essential.
By providing protection against various risks such as property damage, bodily injury, and financial loss, insurance can help safeguard a business and keep it on track.
For example, a customer may claim you dispensed the wrong medication and take you to court. If ever such a predicament should arise, you’ll have insurance to cover it.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Pharmacy Business
General liability insurance is — generally speaking — one of the most important insurance policies for pharmacies.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Although general liability insurance is designed to cover a wide range of risks, it may not provide coverage for all the risks that your business is exposed to. In such cases, you may need to obtain specialized policies that offer coverage for these specific risks. Some examples of these policies include:
- Commercial property coverage: Such policies cover damage to the physical assets of the pharmacy such as the building, equipment, and inventory due to events such as fire, theft, or natural disasters.
- Errors and omissions insurance: This type of insurance covers claims of negligence, malpractice or mistakes made by the pharmacy or its employees in providing professional services or advice to patients.
- Workers' compensation insurance: This type of insurance provides coverage for employees who are injured or become ill as a result of their job. In the case of a pharmacy, this could include injuries or illnesses caused by handling pharmaceuticals or equipment, slips, trips or falls, or exposure to hazardous materials.
When searching for insurance coverage, it's important to note that there are two main types of providers, namely traditional brick-and-mortar insurers such as The Hartford or Allstate and online insurers like Next or Tivly.
Depending on your specific needs and circumstances, each of these providers has its advantages and disadvantages. However, if you're a small business owner, it's generally advisable to opt for an online-based insurer as they offer affordable and high-quality insurance coverage.
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Cost of General Liability Insurance
The average pharmacy in America spends between $350 - $750 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a pharmacy business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Discover the best coverage at the lowest rate in our cheapest business insurance review.
Common Situations That General Liability Insurance May Cover for a Pharmacy Business
Example 1: One of your pharmacy employees is stocking shelves when she rounds an aisle and runs into a customer. The customer falls and breaks her wrist. She asks that your business pay for her medical care. Your general liability insurance policy would likely cover the cost of her treatment.
Example 2: A pharmacy customer is going through the drive-through. He reaches his hand into the drawer to pick up his prescription and it gets stuck. In his panicked efforts to pull his hand out, he breaks several of his fingers. He decides to sue your business. Your general liability insurance would pay for your legal costs, including the cost of a settlement if necessary.
Example 3: One of the competing pharmacies in town has sent you a letter telling you that they are suing you for libel. While you are not certain why they have determined that you libeled their business, you still need to protect yourself by getting an attorney. Your general liability insurance would pay for your legal defense, including the cost of an attorney and the cost of a settlement if you settle out of court.
Other Types of Coverage Pharmacy Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Workers’ Compensation Insurance
The employees you hire to help you run your pharmacy business need the protection offered by workers’ comp insurance, as does your company. Workers’ comp ensures that you meet the legal requirements for employers in your state and covers the cost of medical care if an employee is injured performing work-related duties. The policy will also pay for lost wages if an injured employee needs to take time off of work to recovery.
Product Liability Insurance
You do your best to help your customers by providing them safe, effective products. But there is always the possibility that one of them could be hurt by a product you sell and then sue your business. Product liability insurance will protect your company by covering your legal fees as well as the cost of paying a settlement if you need to do so.
Commercial Property Insurance
The cost of replacing your commercial property, such as your entire pharmacy inventory, would be considerable if you were to lose it in a fire or other unexpected event. With commercial property insurance, your insurer would help to pay for replacement costs if your property was lost in a covered event. That way you could get new inventory and equipment and get back to serving your customers as soon as possible.
Professional Liability Insurance
As a professional giving advice, it is important that you protect yourself and your business with professional liability insurance. This insurance protects you in the event of errors or other mistakes. For example, if you give advice about a medication and they get hurt or ill and then sue your company, your policy would pay for your legal fees to defend yourself.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your pharmacy business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Pharmacy Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Broadly speaking, the answer is yes– a pharmacy would need business insurance coverage right from the start. Insurance has the potential to safeguard your enterprise against a range of risks such as financial loss, personal injury, and property damage. Additionally, specific categories of insurance may be obligatory to comply with state law.
Not necessarily. Certain exceptions may be written directly into your pharmacy business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.