Running a modern-day pharmacy is difficult and ever changing. Most pharmacists today offer a host of services in addition to dispensing drugs, and with advances in technology and healthcare, they’re interacting with patients in ways never imagined before.

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It’s an exciting time but especially risky time to own a pharmacy.

With pharmacies performing a much broader role, the risks are growing exponentially. Some pharmacies are ready for those risks. However, others are not ready, placing them at a significant competitive disadvantage.

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
pharmacy insurance

Most pharmacy liability insurance policies are in the form of a Business Owners Policy (BOP). A BOP typically offers small businesses coverage for property and liability risks in one package.

Pharmacy liability insurance protects your store from lawsuits with rates as low as $95/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked pharmacy insurance questions:

Drugstore Business Insurance Policy Pricing

The average price of a standard $1,000,000/$2,000,000 Pharmacy Liability Insurance policy for drug stores from $95 to $162 per month.

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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What Type Of Insurance Do Pharmacies Need?

The goal of a pharmacy liability insurance policy is to ensure that if a claim is filed against you, you are protected – whether it be in court or at work. Some policies will cover attorney fees and other legal expenses, pay you for lost wages while taking time off work to defend yourself, and even offer reimbursement for licensing board issues.

Commercial General Liability 

This coverage offers protection against the risks of running your pharmacy business. This provides protection against claims of bodily injury liability, property damage liability and even personal injury and advertising exposures for which your business may be liable. Slip-and-fall is a common type of claim.


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 Pharmacies 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 other types of insurance all pharmacies should obtain:

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.

Errors and Omissions Insurance

When running your pharmacy, it is important to consider the implications of other types of errors that can occur. Errors and omissions insurance – also known as professional liability can help provide you with the reassurance that you are covered for mistakes related to improper dosage or incorrect instructions with prescription drugs.

Business Auto 

Commercial vehicle insurance is needed for your pharmacy if use any vehicles to run errands, pick up or drop off drugs or other good for sale.

Insurance for Independent Pharmacies – The Bottom Line

It’s hard to set a baseline rate for the cost of pharmacy insurance because it’s based on many factors unique to you and your company. Things like security features, liability issues, and all the services that you and your business provide will make a difference in the coverage you need, which will determines your monthly premium. Researching options and collecting quotes is your best bet before you buy.

When purchasing a pharmacy liability insurance policy, people should always buy from an agent who understands and can explain all the details of the policy and is also familiar with the pharmacy business. Another thing to look for is who and what is insured under the policy.

This is important as the pharmacy owner will want to know who exactly is insured under their policy and what they are covered against.

The pharmacy industry is rapidly changing and expanding. With new and challenging practice areas come a proportional increase in exposure to professional liabilities. Pharmacy insurance is designed to safeguard your business and give you peace of mind.

If you’re looking for a single source insurance package designed for the modern day pharmacy operation, we can help . By working with our independent pharmacy insurance experts you can rest assured your business will be well covered.  We’ll give you peace of mind so you can concentrate on running your business and taking care of your patients and employees.

Pharmacy and Drug Store Industry Facts From IBISWorld

  • There are approximately 26,000 pharmacy and drug store businesses operating in the U.S.
  • These businesses employ more than 723,000 people.
  • The pharmacy and drug store industry generates about $263 billion in revenue each year.

Regulating Agency and References

Insurance Information Institute (III)
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