Is Professional Liability Insurance Really Necessary for Pharmacists?

This question has been posed to me many times. The answer is: it depends.

Pharmacists who are self-employed or perform contract work through agencies should definitely carry liability insurance because they have 100% legal liability. If you work for a hospital, retail store, or other institution, however, you may not need professional liability insurance because your employer most likely carries liability insurance for each pharmacist to provide coverage against medical malpractice.

In the latter format, you’d receive legal assistance through the insurance company, but the attorney works for your employer, not you. You may be discharged as a result of the suit, but your actions would be covered under your employer’s insurance policy.

If a patient wants to file a medical malpractice against a pharmacist with a pharmacy employer, the patient’s attorney would probably advise filing suit against the pharmacy employer. The pharmacy employer directly has the “right, ability, or duty to control” the activities of its pharmacists while they’re working on the employer’s behalf. This is also called Respondeat Superior, meaning the employer has strict liability for the acts of its subordinates. The pharmacist and other staff may be named in the suit, but the ultimate target would be on the pharmacy employer.

I’ve seen cases where the patient didn’t sue the pharmacist for a monetary award, but instead filed a complaint through the pharmacy board, which led to the loss of his pharmacy license. Because the pharmacist didn’t have protection from the board case through his hospital employer, he still had to retain his personal counsel for representation.

If the pharmacist is under the influence of an illegal substance, note that the insurance company won’t pay any claims that arise from any insured’s “intentional, willful, or deliberate noncompliance with any statute, regulation, ordinance, administrative complaint, or notice of violation, notice letter, executive order, or instruction of any governmental agency or body; or any claim arising from an illegal, dishonest, fraudulent, criminal, or malicious act actually or allegedly committed by any insured.” Therefore, it’s in an employer’s best interest to ensure its staff stays drug-free in order to reduce liability risks.

It’s important to keep in mind that there are times when you can have professional liability insurance and may still need to hire an attorney to represent your interests and not your employers’.