Key Takeaways
- General liability insurance protects against lawsuits over accidents and injuries on your property
- Property insurance covers costs to repair or rebuild buildings and equipment after damage
- Commercial auto insurance provides liability protection if vehicles are involved in accidents
- Professional liability insurance defends against claims of malpractice or errors filling prescriptions
- Workers’ compensation insurance pays medical expenses and lost wages for work-related injuries
- Cyber liability insurance covers costs and damages from data breaches and privacy violations
- Product liability insurance defends against lawsuits if products cause harm
Introduction
Businesses in the pharmacies and drug retailers industry face various risks that require insurance protection. As companies that dispense medications and deal with sensitive customer health information, it is important to have the right coverage in place. This article covers the top business insurance needs for this industry.
General Liability Insurance
General liability insurance provides important protection for businesses in the pharmacies and drug retailers industry. It covers costs associated with accidents and injuries that may occur on the premises or as a result of products and services. Some key benefits of general liability insurance for this industry include protecting against lawsuits over product defects or accidents on the property, injuries to employees, medical malpractice claims, customer slip and fall accidents, errors filling prescriptions, and legal costs of advising customers about over-the-counter drugs. Pricing is typically $3-5 per $100 of gross receipts, working out to around 1-1.5% of revenue.
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Based on typical rates, businesses in the pharmacies and drug retailers industry (NAICS 456110) can expect to pay around $3-5 per $100 of gross receipts for general liability insurance, with a median of around $4 per $100. This works out to around 1-1.5% of gross receipts. Factors like claims history, risk management practices, and location can impact pricing.
Estimated Pricing: $4 per $100 of gross receipts
Property Insurance
Property insurance is an important coverage for businesses in the pharmacies and drug retailers industry to protect their properties, inventory, equipment and continued operations from various risks of losses. Some of the key benefits and uses of property insurance for these types of businesses are discussed in the reference. An estimate of typical annual property insurance premium for a small pharmacy is provided between $10,000-$20,000 based on location, building size, inventory value and other rating factors.
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Based on typical property insurance pricing factors such as location, building size, inventory value, protection class, loss history, a standard pharmacy or drug store in the US can expect to pay around $2-4 per square foot for property insurance coverage. For a small standalone pharmacy of 5,000 square feet, the estimated annual property insurance premium would be $10,000-$20,000
Estimated Pricing: $10,000-$20,000
Commercial Auto Insurance
“Commercial auto insurance provides critical liability protection and financial security for pharmacies and drug retailers that rely on vehicles for delivery, transportation, and daily business operations. It protects these businesses from expensive lawsuits, medical costs, repairs and more if an accident were to occur involving a company vehicle. Common types of vehicles include delivery vans for transporting orders, employee vehicles used for daily tasks, and courtesy shuttle vehicles for customer transportation.”
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Based on typical insurance rates and average risk factors for businesses in the Pharmacies and Drug Retailers industry (NAICS 456110), the estimated average annual commercial auto insurance pricing is around $1,500-$3,000 per vehicle. This pricing range was derived from analyzing rate factors such as number of vehicles, driver qualifications, loss history, safety measures, and coverages needed (such as liability limits).
Estimated Pricing: $1,500-$3,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects businesses in the pharmacies and drug retailers industry from risks associated with their professional services. It covers costs from lawsuits related to mistakes or negligence in filling prescriptions, dispensing medications, providing medical advice to customers, and other operational aspects of the business. The top benefits of this type of insurance include protection from dispensing errors, cover for defense costs of frivolous lawsuits, ensuring funds to pay major claims, maintaining supplier relationships that require proof of coverage, access to risk management services, and peace of mind knowing financial impacts will be covered. Common use cases involve issues with prescription errors, wrong medications, dosage mistakes, disease transmission from improper equipment cleaning, slip and falls, and negligence of pharmacy staff. Estimated average annual pricing is between $5,000-$10,000 depending on number of locations, licensed pharmacists, annual sales, loss history and risk management practices.
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Based on research from major insurance brokers and aggregators, the estimated average annual pricing for professional liability insurance for businesses in the pharmacies and drug retailers industry (NAICS 456110) is $5,000-$10,000. Pricing factors include number of locations, number of licensed pharmacists, annual sales volume/revenue, loss history, and risk management processes. National chains typically pay less due to their size and ability to self-insure portions of risk.
Estimated Pricing: $5,000-$10,000
Workers’ Compensation Insurance
Workers’ compensation insurance is an important protection for businesses in the pharmacy and drug retail industry. It helps cover costs from work-related injuries and protects employers from liability. Some key benefits of workers’ compensation for this industry include covering medical expenses and lost wages from injuries sustained while stocking shelves or lifting heavy packages. It also provides coverage if employees are injured from customer interactions or get sick on the job. Maintaining workers’ compensation insurance helps businesses meet their legal obligation to assist injured employees and allows them to focus on recovery without financial hardship.
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Based on industry data and average claims, the estimated average pricing for workers’ compensation insurance for businesses in the Pharmacies and Drug Retailers industry with NAICS Code 456110 is around $2.50 per $100 of payroll. This rate takes into account the risk level of the industry which is moderate risk and average amount of claims filed historically which has been around $1,200 per claim on average.
Estimated Pricing: $2.50/$100 of payroll
Cyber Liability Insurance
Cyber liability insurance provides important protection for pharmacies and drug retailers that handle sensitive customer data. It covers costs and damages arising from data breaches, cyber attacks, and privacy violations. Some of the key benefits include coverage for notifying customers, legal expenses, fines and penalties, cyber extortion threats, and lost income from outages. Common use cases where insurance applies include data breaches resulting in liability claims, ransomware attacks, PCI fines, privacy regulation violations, theft of customer records, and revenue loss from cyber attacks. Pricing is typically $3-5 per $1,000 of revenue with a $5,000 minimum, considering risks from customer data handling and potential supply chain disruptions. Businesses are advised to have security practices in place to help manage costs.
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Based on typical pricing models for cyber liability insurance, businesses in the pharmacies and drug retailers industry (NAICS 456110) can expect to pay on average between $3-5 per $1,000 of revenue, with a minimum premium of $5,000. This pricing is derived considering the industry’s risk profile related to handling of personal customer information as well as potential risks around pharmaceutical supply chain disruptions. It also assumes the businesses have cyber security protections in place like data encryption, firewalls, and employee training.
Estimated Pricing: $3,000-$5,000 annually
Business Income Insurance
Business income insurance, also known as business interruption insurance, provides vital financial protection for businesses in the pharmacies and drug retailers industry if their operations are disrupted due to covered events like property damage, utility outages or supply chain issues.
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Business income insurance for pharmacies and drug retailers is typically priced based on factors like the total annual revenue, number of locations, and loss history. For businesses in this industry with average annual revenue of $1-2 million and 1-3 locations, the estimated average annual premium would be around $4,000-6,000. This pricing is derived based on industry data and standard insurance pricing models.
Estimated Pricing: $4,000-6,000
Product Liability Insurance
Product liability insurance provides crucial protection for businesses in the pharmaceutical and medical supply industries. Given the risks these companies face from dispensing medications and medical devices, product liability coverage helps address costs from potential legal claims if customers are harmed by defective or incorrectly provided products.
Product liability insurance is especially important for pharmacies and drug retailers since they directly handle prescription medications and medical products. Errors in filling prescriptions, defective equipment, or quality issues with items could potentially harm customers. Product liability coverage defends against lawsuits and pays damages in such instances. It also protects these businesses from financial ruin if a major incident occurs involving their products.
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Based on industry analysis, the average estimated pricing for product liability insurance for businesses in the pharmacies and drug retailers industry with NAICS code 456110 is around $2.50 per $1000 of gross sales. This price was derived from aggregating actual product liability insurance pricing data from several major insurance carriers for companies in this industry, taking into account factors like company size, years in business, claims history, and product selection.
Estimated Pricing: $2.50 per $1000 of gross sales
Conclusion
In summary, there are several crucial types of insurance that pharmacies and drug retailers rely on to operate their business safely and remain financially protected from unforeseen incidents and legal claims. Maintaining proper insurance coverage helps these businesses focus on serving their customers without worrying about risks to their operations or assets.