Identifying and managing risks in pharmacies
Owning a pharmacy business can be rewarding — you play a critical role in the health of your community every day. But like any business, it comes with its share of risks.
Whether you run one (or more) community, retail, or hospital (compounding) pharmacies, managing risk is crucial to protecting your patients and business. Here are common risks pharmacy owners face, how insurance can help, and actions you can take in the business to reduce those risks.
Dispensing or medication errors
Even with careful processes, mistakes happen. One of the most fundamental risks in any pharmacy is a dispensing error – providing the wrong drug entirely, or dispensing with the wrong dosage instructions. Dispensing errors can have serious legal, trust, and reputational consequences, as well as severe health outcomes for your patients. Lawsuits, even criminal charges are possible.
Since 2023, PBS reforms have allowed patients with chronic illness to receive 60 days’ worth of medicines in a single script. While great for patient convenience, this has increased the volume and complexity of each dispensing task, raising the risk of errors.
How Marsh can help
Marsh can arrange professional indemnity insurance tailored to pharmacies, which can protect you in the event of a negligence claim stemming from a dispensing error. This cover can help with legal expenses and compensation costs —giving you peace of mind, while you focus on patient care.
What you can do
- Follow established dispensing protocols.
- Implement a barcode scanning system to ensure that the correct drug and dosage are being dispensed.
- Use double-check procedures, where at least two pharmacists or technicians verify prescriptions before dispensing.
- Maintain a clear error response plan and train staff to follow it.
Inaccurate advice
As pharmacists are increasingly the health professional patients most often see, you are in situations where you’re giving professional advice on everything from minor ailments to medication management. But offering inaccurate or incomplete advice, even with the best intentions, can result in serious reputational and financial consequences.
How Marsh can help
Marsh’s professional indemnity insurance solution we can arrange is ideal for pharmacists. It provides protection against the financial impacts of incorrect or misinterpreted advice — covering legal defence costs and potential compensation payouts, helping you safeguard your pharmacy, and your credibility.
What you can do
- Keep up with continuing professional development (CPD).
- Refer complex cases to a GP or specialist if you are in doubt.
- Maintain written records of any advice you give.
- Ensure your professional indemnity insurance is up to date and adequate.
Cybersecurity and data privacy
Pharmacies handle large volumes of sensitive data. Centralised digital health records, access to health department databases, e-prescriptions, online ordering and digital payment systems are now the norm, and pharmacies are vulnerable to threats such as data breaches and cyber-attacks. These can compromise sensitive patient information, disrupt operations and if your system is breached, the loss of patient trust can be catastrophic.
How Marsh can help
With Marsh’s Cyber Insurance solution, you can cover costs related to data breaches, ransomware attacks, system restoration or legal fees. Handling an actual or suspected cyber-attack incident can quickly become overwhelming, with Marsh you have access to incident response services. We help take the load off and manage, negotiate and settle claims with insurers on your behalf.
What you can do
- Use secure passwords and multi-factor authentication.
- Train staff in phishing and scam awareness.
- Keep antivirus software updated and back up your systems regularly.
Workplace health and safety (WHS)
A cluttered or poorly designed pharmacy workspace isn’t just inconvenient—it can take a toll on your team and potentially harm your customers.
For staff, awkward movements or constant bending and reaching increases the risk of errors and injuries. It can even slow things down, affecting productivity.
But it’s not just about staff safety. If your customer trips over a box, or a poorly secured mat at the door and injures themselves, this could lead a costly public liability claim.
How Marsh can help
While Workers’ Compensation is compulsory to cover your staff, good public liability insurance gives you coverage in the event of injuries to customers. Marsh risk consultants can help you conduct WHS assessments and suggest proactive measures to create a safer environment.
What you can do
- Carry out a WHS audit every three months to identify potential hazards.
- Keep walkways clear, fix uneven flooring, and improve lighting.
- Design workspaces that support good posture and reduce repetitive strain.
- Train staff in safe lifting techniques, especially when it comes to handling bulky stock.
- Maintain first aid kits, emergency exits, and clear safety signage.
Theft, security and property damage
Shoplifting accounts for significant stock loss in Australian pharmacies, (some reports say up to 5%), and internal theft can also be a problem. Pharmacies are also at risk of break-ins and armed robbery, particularly as they stock items such as nicotine vapes or controlled medicines.
Then there’s the risk of equipment malfunction or damage that can result in significant loss for you, such as the failure of a dispensing fridge stocked with refrigerated medicines, or the glass shop frontage getting rammed or smashed.
How Marsh can help
Marsh can arrange property (including theft) insurance that protects your stock, equipment, and building premises from both external and internal theft, including losses due to employee dishonesty.
We can also arrange business interruption insurance, if the operation of the business is severely interrupted through loss of equipment, machinery breakdown, flooding or fire, for example.
What you can do
- Install CCTV, alarms, bollards, and secure cabinets for high-value items.
- Vary banking routines and clear cash from tills regularly.
- Run background checks on new staff and clearly define purchase policies.
- Have a maintenance schedule for key equipment and check this regularly.
- Establish safety-focused, loss-minimising procedures in the event of a natural disaster.
New services, new risks
Many pharmacies are expanding their offering, adding health services such as vaccinations, sleep apnoea testing, and other clinical services. While they may offer excellent revenue opportunities, these services may not be automatically covered under your existing insurance.
How Marsh can help
Marsh can tailor a solution to include these additional services, ensuring your expanding business is fully protected. Speak with a Marsh broker and organise a solution to help you avoid any dangerous coverage gaps as your business evolves.
What you can do
- Review your insurance coverage before launching new services.
- Ensure staff are fully trained and credentialled in any new service.
Business management
As your business expands, risks increase. Operating multiple pharmacies, for instance, raises the likelihood of employment disputes with staff or junior partners, or that a regulatory breach occurs. Resolving wrongful dismissal or breach of duty claims can be costly, so it's wise to protect yourself.
How Marsh can help
Our management insurance solution can help cover legal and compensation costs should a dispute or claim arise, or the business is subject to a regulatory investigation.
What you can do
- Make sure standard operating procedures for all your pharmacy operations are in writing and agreed to and acknowledged by staff and partners.
- Clearly communicate or train staff for all regulatory requirements.
- Ensure staff are fully trained and credentialled.
