Has your pharmacy insurance kept pace with your evolving risks?

September 28, 2016

If you operated a neighborhood pharmacy 50 years ago, dispensing prescriptions was what your business was all about. You couldn’t discuss medications with patients and you had to refer questions back to their doctors. In contrast, pharmacists today provide a wide range of services including screening tests, wellness programs, vaccinations, and even on-site educational events. They regularly interact with patients and collaborate with physicians to prevent harmful drug interactions. They take part in community health promotion campaigns and provide valuable information about a range of health-related issues. You’ll find them in schools of pharmacy and medicine teaching future healthcare professionals, holding positions from entry level to senior management in the pharmaceutical industry, and working for the U.S. Food & Drug Administration (FDA).

In short, today’s pharmacists aren’t just about filling prescriptions. They’re a crucial piece of our modern day healthcare puzzle and a trusted source of information about health issues for consumers.

But along with that evolving role come evolving risks, and if you operate a neighborhood pharmacy today, you face a long list of challenges just to keep your doors open:

  • Expanding big chain and mail order pharmacies
  • Decreased reimbursements for prescription medications from health insurance companies
  • Competition from HMOs, hospitals, and mail order firms that get high-volume discounts from drug makers
  • Managed healthcare arrangements that drive down the prices paid for prescription drugs

Along with those risks, technological advancements and new healthcare laws have created new and complex risks related to electronic data transmission, patient counseling, drug utilization review requirements, and protected private health information under laws such as HIPAA and the Affordable Care Act.

There’s no question that as a pharmacist today, you face evolving risks that require evolving financial protection.

But many pharmacists are finding it harder to get affordable business insurance. They’re looking at rising premiums, higher deductibles, and increasingly limited coverage, largely because of the growing number of frivolous claims and big money court settlements.

So how do you protect your pharmacy business?

The first step is an aggressive risk management strategy. That can help level the playing field, make it easier to get coverage, and keep premiums affordable. Start by analyzing every dimension of your operation. Get your lawyer and insurance agent in on this, and between the three of you, go over everything you do such as:

  • Filling prescriptions
  • Compounding drugs
  • Providing professional and educational services
  • Making deliveries
  • Maintaining your building, parking lot, and property
  • Preparing sterile products
  • Using computer systems and networks
  • Handling sensitive patient health information

Identify every risk and vulnerability. Do your physical security measures need updating to deter theft and vandalism? Could your employees use more training on handling private patient information? Maybe your computer systems need upgrading to keep hackers at bay. Whatever the vulnerabilities, make a plan to plug the holes.

Finally, make sure you’re financially protected with the right insurance. In addition to standard GL and property coverage, you may need professional liability, cyber liability, key person, and other coverages to be fully protected. With multiple risks to protect, you may want to consider a Business Owners Policy (BOP), which can be tailored to your needs and include coverage for equipment breakdown, buildings/contents, business income and extra expense, electronic data, employee dishonesty, and other risks.

Bottom line: you don’t want to leave yourself vulnerable with a potentially costly coverage gap.

What’s the best way to make sure you’re covered? Contact the pharmacy insurance professionals at Heffernan Insurance Brokers. We have extensive experience serving independent pharmacy owners, and we have the prescription for a healthier bottom-line.