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The benefits of professional liability insurance for pharmacists
Tom English

The benefits of professional liability insurance for pharmacists

Pharmacists are an integral part of the health care supply chain, dispensing medicines, compounding formulas, providing vaccinations, and providing critical patient consultations. Like any health care professional with a significant hand in patient care delivery (and subsequent outcomes), pharmacists should be aware of potential professional liability risks and take steps to mitigate them. Individual professional liability insurance policies for pharmacists may provide valuable coverage beyond what your employer’s liability policy may provide.

The expanding role of the pharmacist: More responsibility, more risk

The COVID-19 vaccine initiative brought new focus to the important role of pharmacists in the health care supply chain. Pharmacies played a significant role in helping Americans get important coronavirus vaccines. On the one hand, this is excellent news for some pharmacists, who can play an even more active role in providing critical patient care. On the other hand, increased responsibility means increased risk. Therefore, the purchase of individual professional liability insurance for pharmacists becomes more critical than ever.

With that said, legal claims against pharmacists are not a new phenomenon. The most common allegations encountered by pharmacists include providing incorrect medication or incorrect dosage, as these two types of claims together comprise 63% of lawsuits filed against pharmacists.

Here are some examples of the types of claims pharmacists may face, based on past HPSO case studies:

•    Failure to counsel or refer a patient: A pharmacist assessed a patient with a spider bite, and recommended and dispensed two topical ointments for treatment. One of the ointments worsened the condition. The patient went to the hospital and remained hospitalized for 28 days in order to receive extensive treatments, including intravenous antibiotics, surgeries, and skin grafts. This claim resulted in a total incurred amount of $280,000, including indemnity and legal expenses.
•    Dosage error: A pharmacist filled a prescription for a 100-milligram dosage of Phenergan, although the patient’s physician had called to cancel the prescription due to a dosage error. The patient experienced lingering physical effects, notably ongoing tinnitus. The dispensing error resulted in a $1.4 million verdict.
•    Pharmacist negligence in compounding medication: A compounding error resulted in a patient’s medicine having three times the dosage of the active drug (clonidine) prescribed. The patient was a child receiving treatment for hyperactivity and anxiety. The patient had a seizure after taking the medication (and survived). A subsequent lawsuit was settled for $240,000.

These examples represent some of the risks in pharmacy practice and do not address all the various risks that pharmacists encounter. While these scenarios may seem extreme, errors can occur as nobody is immune to human error.

It is entirely possible—and, of course, preferable—that in your career as a pharmacist, you will never experience such a claim. However, if issues arise, individual professional liability insurance for pharmacists can be beneficial. 
The benefits

While your employer may have insurance, this is designed to provide coverage as a business and will not necessarily offer you sufficient individual coverage in the event that claims are brought forth against you.

Here are some of the types of insurance that an individual professional liability policy may offer.
1. Professional liability coverage

Professional liability coverage can help cover the cost of damages if you are found legally liable for a claim related to a covered medical incident. The examples above give you an idea of what types of claims may be brought against you, as well as the substantial damages that may result. Professional liability coverage may include reimbursement for medical expenses to others injured, up to the applicable liability limits.
2. License protection

Pharmacists must be licensed to practice by their state. If a complaint is filed with your state licensing board, you may be required to defend your license and your right to practice your profession. Your individual insurance policy can help reimburse you for the legal fees associated with defending yourself against disciplinary charges.
3. Defense costs

Your individual professional liability coverage pays defense costs for covered claims, irrespective of whether a favorable result is achieved. This includes the cost of investigating claims. Defense costs are provided in addition to your liability limits.
4. Defendant expense benefit

You can further benefit from defendant expense coverage, which will reimburse you for travel, food lodging or lost wages due to the time spent at trial, hearings, or proceedings as a result of a covered claim.
5. Deposition representation

If you are subpoenaed to be deposed for a case that arises out of professional services for which you may have knowledge, (although you are not a named defendant), your insurance policy may help pay for an attorney to represent you through the process.
6. Information privacy coverage (HIPAA)

HIPAA strictly regulates the handling of patient data, known as “protected health information,” emphasizing the protection of the patient’s right to privacy. Information privacy violations can be expensive, resulting in HIPAA fines and penalties. Your insurance may help to cover civil monetary penalties that you become obligated to pay as a result of a covered proceeding.
7. Additional possible types of coverage

The above represents just some examples of the types of coverage that may be available, and does not represent a comprehensive list. Professional liability coverage can also help to insure you in the event of allegations of damage to property of others, personal injury caused in the course of your professional duties, or first aid payments.

Get protected with HPSO

With more than 30 years of experience and providing coverage for more than 400,000 health care professionals, HPSO and its insurer partner, CNA, have the experience and expertise to assist policyholders manage their professional liability claims. APhA sponsors this individual professional liability program.

Get a quote for professional liability insurance today.

Further, the HPSO coverage for pharmacists is portable, so you can take it with you when you change locations. The possibility for ongoing coverage will depend on your new location and your licensure in that new location. In addition, coverage applies only to covered claims brought within the U.S. or its territories. Whether you have a second job, volunteer, move, or change jobs, your policy is there to help insure you. Make sure you have the coverage that may help you serve your community as a pharmacist.

This publication is intended to inform Affinity Insurance Services, Inc., customers of potential liability in their practice. This information is provided for general informational purposes only and is not intended to provide individualized guidance. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy. Any references to non-Aon, AIS, NSO, HPSO websites are provided solely for convenience, and Aon, AIS, NSO and HPSO disclaims any responsibility with respect to such websites. This information is not intended to offer legal advice or to establish appropriate or acceptable standards of professional conduct. Readers should consult with a lawyer if they have specific concerns. Neither Affinity Insurance Services, Inc., HPSO, nor CNA assumes any liability for how this information is applied in practice or for the accuracy of this information.

Healthcare Providers Service Organization is a registered trade name of Affinity Insurance Services, Inc., a licensed producer in all states (TX 13695); (AR 100106022); in CA, MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services, Inc.; in CA, Aon Affinity Insurance Services, Inc., (CA 0G94493), Aon Direct Insurance Administrators and Berkely Insurance Agency and in NY, AIS Affinity Insurance Agency.

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