Essential Pharmacy Insurance Policies

There are a number of insurances that are essential for owners of retail pharmacies. These not only protect the pharmacy building itself, but also its staff, customers and contents. Below is a breakdown of what these insurances cover.

Buildings Insurance

Buildings Insurance covers costs if the building is damaged due to fire, lightning, explosion, riot, malicious damage, subsidence, storms or flooding. Most policies should provide cover on an ‘All Risks’ basis subject to a policy excess.

For an accurate quote, owners will need find out the value of their property. This can be achieved by speaking to a property valuation or mortgage company.

There are additional features that should be considered when arranging building insurance, to provide further peace of mind:

• Accidental damage to underground pipes and cables
• Unoccupancy conditions applied by insurers
• Loss of rental income may be required
• Associated fees and debris removal cost
• Property owners liability up to £2m limit of indemnity, which covers legal liability arising from third party property damage and bodily injury

When buying insurance pharmacy owners should check these extra covers are included and look carefully at the excesses - the amounts that are paid before any claim is made.

Contents Insurance

Buildings insurance only covers the physical pharmacy building itself, so separate insurance cover for stock, machinery and contents within the pharmacy is needed. Contents Insurance protects the contents of your pharmacy against damage, destruction, loss or theft. A policy will pay the cost of repair if any of these possessions are damaged, or pay for replacements if lost, destroyed or stolen.
Pharmacy owners may also consider the following policy extensions:

• Accidental damage including fixed glass
• Theft cover that is not reliant on forcible/violent entry or exit to the premises
• Automatic seasonal stock increase of 30%
• Cover for refrigerated stock
• Property temporarily removed elsewhere
  

Business Interruption Insurance

A property insurance policy only covers the physical damage to the business. However, in the time that the pharmacy is closed because of that damage, revenue is lost. The additional coverage provided by a business interruption policy covers the profits that would have been earned in that time. It is designed to help in situations where a catastrophe, such as a fire, causes the pharmacy to be temporarily unusable.

We recommend that an indemnity period of at least 24 months is considered to leave time to get back to normal trading conditions following a serious incident. This is particularly relevant to pharmacies where it may not be possible to continue to operate from the same premises should the pharmacy be out of operation for several months.

Employers Liability insurance

Employers Liability Insurance is required by law if the business has employees (Employers' Liability Compulsory Insurance Act 1969). This must cover at least £5,000,000 limit of indemnity, however most policies provide £10,000,000 and higher limits can be arranged, if required.

People working for you are employees if:

• they are under a contract of service
• you deduct income tax and National Insurance from their wages
• you manage when, where and how they work
  

Employers liability insurance enables businesses to meet the costs of damages and legal fees for employees who are injured or made ill at work through the fault of the employer.

Public Liability insurance

Public Liability insurance covers any awards of damages given to a member of the public because of an injury or damage to their property caused by you or your business.

It also covers any related:

• legal fees
• costs
• expenses
• hospital treatment including ambulance costs
  

Product Liability

In product liability insurance terms, a product is any physical item that is sold or given away. Pharmacy owners are legally responsible for any damage or injury that a product they supply may cause.

Product Liability may be required for non pharmaceutical related items sold in the pharmacy, such as toiletries or makeup.

It covers pharmacies against damages awarded as a result of damage to property or personal injury caused by the product.