Does Pharmacy Professional Indemnity Insurance Cover Me for Claims Arising from Previous Years?

A customer approaches you and states that you dispensed the wrong medicine some time ago. Will your pharmacy insurance still cover you?

Yes it does. Your pharmacy insurance policy is written on a “claims made” basis, which means that when a claim is made or reported you contact us and we will deal with the claim.

It is very important to notify your pharmacy insurance as soon as a claim or incident comes to your attention. That way, we can get all the details while the situation is fresh in everybody’s mind.

In this article, we’ll cover questions like:

• What is professional indemnity insurance for pharmacists?
• What does “claims made” mean?
• Does professional indemnity cover legal expenses?

If you run a pharmacy, you should always arrange a professional indemnity policy from the first day you start trading to eliminate any room for error.

What is professional indemnity insurance?

Your professional indemnity policy will take over the defense of the case as well as any compensation awarded to your customer if you accidentally dispense the wrong medication or the wrong dose and a customer takes an action against you.

No standard pharmacy insurance policy will cover professional indemnity as standard. In fact, most retail policies specifically exclude dispensing risk. Having a separate professional indemnity policy plugs up this gap and makes sure you’re operating safely.

If your practice isn’t adequately insured, and a customer takes you to court for a professional mistake, you could lose your business and a lot more.

Professional Indemnity Insurance is probably the most important insurance policy pharmacists can have. You must make sure that your professional indemnity policy provides appropriate cover. This means that the cover needs to fit the nature and extent of the risks involved in your practice so that enough compensation will be paid if a successful claim is made against you.

What does “claims made” mean?

“Claims made” is a form of reinsurance under which the date of the claim report is deemed to be the date of the loss event. Claims reported during the term of the reinsurance agreement are therefore covered, regardless of when they occurred.

A claims made policy will pay out for any valid claim made during the policy period – which is typically 12 months – regardless of when the incident actually occurred. With a professional indemnity policy, this means all your work is covered as far back as the start date of the policy or the retroactive date, if your policy has one.

When buying your professional indemnity policy, you will be asked the date you want the policy to run from. If you have an existing professional indemnity policy in place, you should tell the new insurer the date that existing policy started and this will become the “retroactive date”. The new policy will then start (the “inception date”) and work done before the inception date with the new insurer, all the way back to the retroactive date, will be included.

Does professional indemnity cover legal expenses?

Yes. All legal expenses are covered as part of the professional indemnity section of your policy, as long as the person whom the claim is against is a qualified pharmacist or locum.

Any registered pharmacist who is providing advice owes a duty of reasonable skill and care to their customers as part of their job. However, if another member of staff at your pharmacy dispenses medicine or gives advice – such as a cleaner or security guard – the outcome will not be good. This is because these staff do not have the same legal protections as qualified pharmacists. Therefore, to protect your business, it’s up to you to make sure medicine is only given out by fully qualified professionals.

How you manage your employees is up to you, but the best cure is always prevention. Make sure you stay up to date on current legislation regarding medicines, and ensure staff are properly trained on what they are and aren’t allowed to give out to customers.

If someone makes a claim against your pharmacy accusing you or your locum of misconduct, you could lose your business and face serious legal repercussions.

If you have any questions on pharmacy insurance give our experts a call and we can go through the right cover options for your business.