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Letters to the Editor
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Public liability insurance
Questions have arisen in my mind
From R. S. Boorman, MRPharmS
I have been involved in community pharmacy and UK and international
commerce for a long time and have learnt to identify risks and take steps
to avoid as many as possible using any sensible and legal method. Recently,
arising from the introduction of the new pharmacy contract and written
standard operating procedures (SOPs), certain questions have arisen in
my mind that seem insoluble.
I am an employed pharmacist and have taken issue with my employer over
the need, in the particular environment in which I am employed, to accept
certain procedures. These exclusions have been accepted by a regional
executive but, on submission to the superintendent pharmacist’s
office, some of these exclusions from SOPs were rejected on the grounds
of company policy. This is a concept without any real meaning or justification
unless one is given and proven.
We are all living in a more litigious society. Under these circumstances
I asked myself what night happen if I made a mistake when a prescription
was dispensed and a person suffered harm. The injured person could make
a claim against the employer who would be protected, if proven liable,
from the effects of a damages claim by their public liability insurance
(PLI). Alternatively the injured party, because they felt vindictive
or malicious, might only attempt an action against the employee. If the
employee had his or her own PLI, that protection would be brought into
place to protect the employee. In addition, in any such action, such
an employee could seek to involve the employer as co-defendant. This
would also bring in the protection of the employer’s PLI and in
the event of a successful claim the damages would be met in all likelihood
with a contribution from both insurers. But what could happen if the
employee did not have his or her own PLI?
The employee would, of course, rely on the protection of the employer’s
PLI and in the event of a successful action damages may well be met from
the insurer and there the matter should rest. I thought that to be the
case until recently.
The number of bodies providing PLI for pharmacists is limited. Thus in
most cases the insurer of the party sued could well be aware of PLI held
by an employee. In any event the employee would be asked to disclose
any PLI he or she held in their own name. Thus in a case where an employer
is successfully sued for damages by an injured party, then the insurer
or the employer is highly likely to start an action against the employee
and make a recovery against the insurer of the employee. That may well
suit the situation but what is there to prevent an employer, against
whom a successful action under their PLI has been brought, from taking
an action against an employee who has no PLI? The answer to that is nothing.
This means in effect that the entire estate of any employee pharmacist
is at risk in the employed work situation. I have requested from my employer
a statement in writing that the company’s PLI affords that protection
to me as an employee without recourse. To date this has not materialised.
I have spoken to two providers of PLI for either locum or employed pharmacists
and both have confirmed the situation that I have described. It is unknown
to me whether any employer has taken an action against an employee to
recover costs and damages awarded against an employer without the employee
having PLI cover. What is certain is that it is only a matter of time
before it happens.
I have written this letter to indicate a warning to employed pharmacists
in particular but similar situations could arise outside community pharmacy.
I have been unable to find written confirmation from any tax authority
that the cost of any premium incurred for PLI by an employed pharmacist
is allowable as a deduction from gross income before arriving at taxable
income and I would be pleased to see any such written confirmation. Perhaps
it could be made law that all employees in all situations are covered
under an employer’s PLI without recourse and then we would all
know where we stood.
I wonder, is that expecting too much?
R. S. Boorman
Abingdon, Oxfordshire
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JOHN D’ARCY, chief executive, National Pharmaceutical Association,
comments:
In practice, it is extremely unlikely that an individual harmed
by the negligent act of an employee (for example, as a result of a
dispensing error) will sue that employee directly, particularly if it
is known
that the employee does not carry a separate professional indemnity/public
liability
(PI/PL) policy of insurance. The aim in any personal injury/medical
negligence claim is to recover damages and the claimant will direct
his or her attention
to the organisation or firm that is perceived as having the ability
to pay. This is why having PI/PL cover is so important.
Those working for, or engaged by, NPA members will be reassured that
NPA members are fully indemnified (up to £10 million) against
liability to pay damages and costs for breach of statutory duty and/or
negligence claims. This indemnity
extends to their employees and, uniquely, those who are engaged by them, so
will cover self-employed locum pharmacists. Therefore, if someone engaged
by an NPA
member was sued as an individual and the claim arose while the person engaged
was acting in the course of his employment or engagement with the member, the
NPA would deal with the claim on behalf of the person engaged.
The NPA would like to make it quite clear that it has never sought to recover
any losses from an uninsured employee or a locum where it has settled a claim
and it has no intention of doing so. It is recognised that many pharmacists
choose to avail themselves of individual PI/PL policies and, consequently,
it is only
right that where separate insurance exists and the fault lies with the insured
pharmacist, that his/her insurer should deal with the claim. From the NPA’s
perspective, indemnity and/or contribution against having to pay damages and
costs will only be sought against an employee or locum pharmacist, if that
pharmacist has a PI/PL policy.
I would encourage anyone wanting further advice on this issue to contact
the NPA’s legal department. |
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The
Pharmaceutical Journal