Rx & The Law

Do Employed Pharmacists Need An Individual Pharmacists Porfessional Liability Policy?

by Don McGuire, R.Ph., J.D.
Professional Liability Claims Attorney
Pharmacists Mutual Insurance Company

Most employed pharmacists believe that their employer’s insurance policy protects them in the event of a professional liability claim. This is usually correct. The fact that it is not always correct is reason enough for pharmacists to consider buying their own individual professional liability policy. There are 3 factors, which when considered together, show the need for a pharmacist to obtain their own coverage.

Control – The employed pharmacist has no control over the coverage purchased by their employer. During my years as an employed pharmacist, I never saw my employer’s policy. I worked on their word that I was covered. I did not know what the coverage limits were, what services the policy covered or even if employed pharmacists were an insured under the policy. If limits are too low or if the policy doesn’t cover immunizations or MTM, the employed pharmacist is potentially left exposed. If this lack of control weren’t enough, the employee doesn’t know if/when the policy lapses or if the employer fails to pay the premium. The worst time to find out these things is when a claim is staring you in the face. While the typical individual professional liability policy is secondary or excess, it can drop down to provide primary coverage for the pharmacist when the employer’s policy is missing or inapplicable.

Coverage - The typical employer’s policy only provides the pharmacist with professional liability coverage for “for acts within the scope of their employment.” In other words, the pharmacist is only covered while they are at work. For a pharmacist who volunteers at a senior center or a church, provides advice to friends and neighbors, or occasionally moonlights, their primary employer’s policy won’t cover them in these situations. An individual policy, on the other hand, covers the pharmacist 24 hours a day. This additional protection allows the pharmacist to give back without worrying about their personal exposure.

Target - There is one additional concern often expressed by risk managers and employers. That is that the existence of an individual professional liability policy makes the employed pharmacist a target for the plaintiff’s attorney. Our experience has shown this not to be true. The trend is that plaintiffs’ attorneys are naming the individual pharmacists as defendants many more times today than they were 20 years ago. A good plaintiff’s attorney will bring all potentially liable persons into the suit. Most often, this happens even before the existence of the individual policy is known. We have even had cases where the individual policy was not discussed until 2 or 3 years into the litigation process. While I believe this target idea is a myth, even if it is true, it is outweighed by the other considerations above.

The ease of application and low cost of individual professional liability coverage make this choice even easier for the employed pharmacist. It provides an extra measure of protection over and above that carried by their employer. Individual pharmacist professional liability policies are secondary in nature. However, if there is a problem with the employer’s coverage for the employed pharmacist, the pharmacist’s individual coverage can provide the missing, and much needed, protection. This is especially important when it comes to the cost of defending lawsuits. Even winning a lawsuit can be expensive. Every pharmacist should take steps to protect their own career and reputation. Some things are not better left to others.

This article discusses general principles of law and risk management. It is not intended as legal advice. Pharmacists should consult their own attorneys and insurance companies for specific advice. Pharmacists should be familiar with the policies and procedures of their employers and insurance companies, and act accordingly.