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Why do pharmacies and drugstores need insurance?
Pharmacies are a common target for criminals, especially when you have late night hours or limited staff. Business insurance is a key part of risk management, and helps you recover quickly from theft, fires, and lawsuits.
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Insureon helps pharmacy owners find insurance that matches their unique risks.
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Which business insurance policies do pharmacies and drugstores need?
These insurance products cover the most common risks faced by pharmacies and drugstores.
Business owner's policy
A business owner's policy, or BOP, is a cost-effective way for pharmacy and drugstore business owners to buy general liability coverage and commercial property insurance together.
BEST FOR
- Slip-and-fall accidents
- Theft of prescription drugs
- Business interruption insurance
General liability insurance
A general liability policy can cover a pharmacy’s legal defense costs if a customer sues over an accidental injury or property damage. Bundle it with commercial property insurance in a BOP.
BEST FOR
- Customer bodily injuries
- Damaged customer property
- Product liability insurance
Workers’ compensation insurance
Most states require workers' comp for pharmacies and drugstores that have employees. It also protects sole proprietors from work-related injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Legal fees from employee injuries
Cyber insurance
Cyber liability insurance helps pay for financial losses from data breaches and cyberattacks. It's recommended for any business that handles credit cards or other sensitive data.
BEST FOR
- Customer notification expenses
- Fraud monitoring services
- Cyber extortion demands
Commercial umbrella insurance
Umbrella insurance (similar to excess liability insurance) boosts coverage on general liability, commercial auto, and employer’s liability insurance once the underlying policy reaches its limit.
BEST FOR
- Bodily injury lawsuits
- Product liability lawsuits
- Auto accident lawsuits
Commercial auto insurance
Most states require commercial auto insurance for business-owned vehicles. This policy covers accidents involving a pharmacy's delivery van or other vehicle.
BEST FOR
- Damage to another vehicle
- Injuries caused to another person
- Vehicle theft and vandalism
Looking for different coverage? See more policies.
How much does insurance cost for retail stores?
A pharmacy with only a few employees will pay less for insurance than a larger business.
Factors that affect your premium include:
- Type of business, such as a retail pharmacy, mail order pharmacy, network pharmacy, or specialty pharmacy
- Products sold, such as prescription medications or vitamins
- Business property and equipment
- Types of insurance purchased
- Deductibles and other coverage options
- Claims history
How do I get pharmacy business insurance?
It's easy to get business insurance for your pharmacy, drugstore, or convenience store if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. providers to find the right insurance coverage for your pharmacy, whether you work independently or hire pharmacists.
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FAQs about pharmacy and drugstore insurance
Review answers to top questions about pharmacy and drugstore insurance.
If I have to temporarily close my pharmacy or drugstore, am I covered by insurance?
Yes. When you purchase commercial property insurance or a business owner's policy, it often comes with business interruption insurance. This policy helps pay for expenses when you suspend pharmacy services due to a fire or other covered property claim.
Pharmacies, drugstores, and other businesses that rely on a storefront and carry valuable inventory should carry this coverage as part of their risk management strategy. It's sometimes called business income insurance.
It will help cover daily operating expenses until your business can reopen, such as:
- Employee wages
- Relocation costs
- Rent payments
- Loan payments
- Taxes
Check your property policy or BOP to make sure this coverage is included and to find out how long it can cover your business. Most policies provide coverage for up to 12 months, which means you can keep paying your employees during a lengthy shutdown from a fire or other damaging event.
Do pharmacies and drugstores need product liability insurance?
Because of the possibility of an adverse reaction or other harm caused by a drug, pharmacies and drugstores need to carry product liability insurance.
This coverage is typically included in your general liability insurance policy or it can be added as a rider. You'll need to check with an insurance agent to make sure your policy doesn't have an exclusion for prescription drug coverage.
Every business in the supply chain should carry this coverage, including retailers, manufacturers, and distributors. Paying for a lawsuit out-of-pocket can be financially devastating for a small business, even if you weren't responsible for the product defect or insufficient warnings that harmed a customer.
Additionally, you should consider buying product recall insurance. The costs associated with recalling a product can add up quickly, from public relations efforts to disposing of the recalled drug or other products.
It's best to avoid a product liability lawsuit in the first place by taking precautions, such as double-checking product labels. Claims are costly and can also make your premium go up.
Are pharmacies and drugstores insured against shoplifting?
Pharmacies and drugstores are prime targets for criminals, which is why you should carry crime insurance. The following policies help you recoup losses from shoplifting and other types of theft:
- Commercial property insurance: This policy covers stolen, damaged, and destroyed property, including your building and your inventory. It's also called business hazard insurance, and you can bundle it with general liability insurance in a business owner's policy to save money.
- Employee dishonesty coverage: Also called a fidelity bond, this coverage provides financial protection against employees who steal from customers or your pharmacy.
In addition to carrying insurance, it's important to take steps to prevent theft. Some insurance companies even offer a discount on your premium if you install an approved security system or take other precautions.
What other insurance policies should pharmacies and drugstores carry?
Depending on your unique risks, such as whether you lease a space, you may need other types of drugstore or pharmacy insurance. For example, you might consider:
- Electronic data processing (EDP) insurance: If a fire or natural disaster destroys your POS system or customer database, this policy can help cover the financial losses caused by the lost data.
- Equipment breakdown coverage: This pharmacy coverage pays for unexpected malfunctions of specialized equipment, such as tablet counting machines, refrigerators, freezers, and compounding equipment.
- Hired and non-owned auto (HNOA) insurance: Pharmacies and drugstores that rely on personal, leased, or rented vehicles should carry this type of auto liability insurance, as personal auto policies won't cover work-related driving.
- Inland marine insurance: Standard property insurance only covers items at your business location, so you may need inland marine insurance to protect items stored off-site or out for home delivery.
- Professional liability insurance: Because pharmacists could face a lawsuit over a medication error or other professional negligence, they should consider this coverage to defend against legal costs. It’s also called malpractice insurance or errors and omissions insurance (E&O).
You can often add these coverages to your general liability policy or BOP. Bundling different kinds of coverage is one of several ways to save money on business insurance.