Running a drug store is a rewarding, but certainly complicated, business. Every day you help your customers get the right medication and medical supplies that they need for their personal health while also managing your staff and inventory. Due to the nature of the pharmaceutical business, you need to have protection against things like a customer getting injured, a pharmacist overprescribing medication, store vandalism, and more. The key to protecting yourself is having the right comprehensive insurance policy in place, and an independent insurance agent is perfect for the job.
When it comes to understanding the somewhat complex world of commercial insurance, working with an independent insurance agent is a smart decision. Independent insurance agents have the expertise and resources available to make sure you can make the right choices when it comes to getting the coverage your drug store needs.
What Types of Insurance Coverages Do I Need for a Drug Store?
A drug store needs insurance coverage for every aspect of the business. Sold under a business owners policy (BOP), your drug store can get the coverage that prevents significant financial liabilities should a covered event occur. Most BOPs provide the following:
- Commercial property coverage
- General liability insurance
- Workers' compensation
- Commercial automobile insurance
|Type of Coverage||Description of Coverage||Examples|
|Commercial Property Coverage||Your drug store needs property insurance in situations where the business needs to be reimbursed following property damage or lost property. This policy covers the cost of replacing your business equipment or other property when lost/damaged by fire, theft, vandalism, or natural disasters. Property coverage may include equipment, inventory, offices/premises, supplies, tools.||Smoke damage from an electrical fire ruined your inventory and interrupted your ability to handle customers until your showroom was rebuilt. A burglar broke into your premises and stole your computer equipment.|
|General Liability Insurance||General liability insurance covers your drug store from some of the most common liabilities. This coverage is particularly useful when you need to compensate third-party lawsuits from third-party non-employees, such as customers or contractors. General liability covers legal bills and settlements resulting from personal injury, damaged property, advertising injury, or reputational damage. Because your drug store may hire installers to work on other people's property, this type of insurance coverage may prove useful when damage or physical injury is caused to third parties.||A customer hurts themselves or damages their property while in your drug store and files a claim against you for medical bills. A competitor accuses your company of slander or libel and takes your drug store to court.|
|Workers' Compensation||Workers' compensation insurance is mandatory in most states for any non-owner employees. It is a broad form of coverage that protects your drug store from any number of costs arising from the workplace. This coverage is important for claims, as lawsuits are generally avoided if injured workers file a claim through workers' compensation. Workers' compensation can pay for lawsuits, funeral costs, medical bills, ongoing wages for injured or sick employees, and support payment for any dependents.||If your employee is exposed to cleaning products in the pharmacy that have spilled and gets an allergic reaction, they will need to go to the hospital and possibly have additional medical tests and care done. A worker tears a ligament while climbing a ladder in your stock room. Your cashier has to take time off for developing carpal tunnel syndrome (CTS) symptoms.|
|Commercial Automobile Insurance||A commercial automobile insurance policy can protect your drug store from losses that arise when vehicle accidents happen.||Your delivery driver accidentally runs over a customer’s parked motorcycle.|
Insurance is customizable for a drug store depending on its needs. Most insurers offer umbrella insurance which increases the liability of existing insurance policies by paying a single premium. This coverage can include:
- General liability insurance
- Professional liability
- Commercial auto insurance
The value of an umbrella is that it pays for any lawsuits that exceed the current limits of your coverage, typically in increments of $1 million for covered events. This can be useful if, for example, you are being sued by multiple parties after a fire occurred and injured employees at your drug store.
Another form of insurance the drug stores may want to carry is crime insurance. Due in large part to the opioid epidemic, drug stores and pharmacies are at a higher risk for theft of money and prescription drugs. Therefore, having protection reduces the significant financial burden that even one robbery can lead to.
What is the Cost of Insuring My Drug Store?
Insuring a drugstore can be costly and above average for premiums. With the average premium rate being $1,200 per year for most commercial entities, you can expect to insure a drug store for more. This is because drug stores are often targets for theft and carry expensive medications that can be stolen easily in addition to all of the other risk factors that come along with running a business.
The following are also some common risk factors to consider for drug stores:
|Risk factors for higher insurance premiums||Size of premises, condition of the property, business hazards, payroll size, claims history, employment status of employees, number of employees, and severity potential|
|Risk factors for higher commercial auto insurance premiums||Driver demographics, how and where You drive, type of driving, and vehicle driving record|
NAICS Code for Insurance Costs
Insurance companies use classifications of businesses to determine how much coverage should be underwritten and ultimately your drug store’s premium rates. The government uses an industry-identifying code called a North American Industry Classification System (NAICS) code to designate your business operation.
The NAICS code for drug stores and pharmacies is 446110, which stands for Drug Stores and Pharmacies.
If you don’t know which NAICS codes apply to your business, speaking with an independent insurance agent can help you determine which NAICS code your store is best classified under.
Reducing the Cost of Insurance
There are a number of ways to reduce your insurance premiums which any cost-conscious drug store owner should be aware of:
- Bundling coverage
- Reducing risks
- Providing adequate oversight and intensive training
- Investigating any discount options offered by an insurer
One of the primary benefits of working with an independent insurance agent is that they can recommend ways to reduce your cost of coverage. While they can help you find discounts at your current insurer, independent insurance agents can also recommend competing companies that may offer better rates, greater coverage, and so forth — something that a company representative may not be willing to do.
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Additional Forms of Insurance for Drug Stores
Before we conclude this article, you should know that insurance policies are available for any aspect of your business.The following is a list of some other coverages that you should discuss with an independent insurance agent:
- Errors and omissions (E&O) insurance
- Spoilage insurance
- Food contamination insurance
- Business interruption insurance
- Equipment breakdown insurance
- Cyber liability insurance
- Employee dishonesty coverage
- Earthquake insurance
- Flood insurance
- Product liability insurance
How to Find the Best Insurance for Your Drug Store
Insurance policies can be complex, and searching through options can be confusing, time-consuming, and frustrating. An independent insurance agent's role is to simplify the process.
When it comes time to purchase insurance, they’ll break down all the jargon and explain the nitty-gritty so you understand exactly what you're getting.
And should you need to file a claim, you’re not alone. Your agent will be right there to help guide you through every last step and get your business back to where it all was. How great is that?
Why Online Quotes Aren’t Always the Best Way to Shop
Getting your insurance quotes online can be tempting. Sure, it’s fast and easy, but are the quotes you are getting actually accurate? And are you getting quotes for all the different types of coverage your business needs?
Online quotes cannot give you the whole picture. They often omit important coverage, which may result in you being unable to get compensation if something disastrous happens. And they can leave out cost-saving opportunities such as discounts and bundling opportunities that an independent agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent near you, and schedule a one-on-one consultation to discuss your options for the best coverage for your drug store.
The Benefits of an Independent Insurance Agent
Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. Find an independent insurance agent in your community here.
TrustedChoice.com Article | Reviewed by Paul Martin
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