Are you insured to provide extra services?

The Government’s recent White Paper, entitled “Pharmacy in England: building on strengths — delivering the future”, describes pharmacists as an underused resource.

It advocates a continuing shift in emphasis for pharmacists from the realms of dispensing prescriptions to delivering clinical services, such as treating minor ailments, managing long term conditions, prescribing and helping to reduce hospital admissions.

However, it also raises several practical and administrative issues that need to be addressed, particularly with regards to insurance, public liability and personal indemnity.

The expansion of pharmacy activities will be scrutinised by insurers, particularly as proposals outlined in the White Paper filter down to the high street.

Paul Coleman, director of insurance for the National Pharmacy Association says: “It is a good time for pharmacists and a good time for the industry as a whole — the future is bright with opportunities.

“But it is important that pharmacists make sure they are suitably protected.”

Increased litigation risk

With the public becoming more litigious and having higher expectations of the amount of money they can receive if they sue and win, there is pressure on insurers to strike a balance between adequate cover and competitive premiums.

Mr Coleman notes a rise in claims against pharmacists and believes that for many years, British people have been influenced by the American litigious culture and “pharmacists are one of many who are in the firing line.”

“Pharmacy is a naturally risky business and mistakes do happen,” says Tony Dean, an independent pharmacist from Norfolk. “In the past, with an apology, common sense would prevail.” His concern is that, now, litigation has become more likely.

Increasing premiums

With significant changes to practice coinciding with an increased threat of legal action, Mr Coleman believes that insurance premiums for pharmacists are likely to go up. There is already evidence of increased premiums, particularly for primary care pharmacists and prescribing pharmacists.

Factors impacting on insurance premiums include the responsibility for patient care that a pharmacist has, and the structure that is in place to support him or her in everyday practice.

Prescribing John Murphy, director of the Pharmacists’ Defence Association, acknowledges that during recent years, pharmacy liability has grown, particularly for prescribing pharmacists. The PDA has conducted some research on prescribing pharmacists’ liability. One of the outcomes of this research was that risk assessors believe prescribing activities to be “three times as risky” as dispensing activities, says Mr Murphy.

Support structures Hospital pharmacists tend to have more structured support from colleagues than, for example, locum community pharmacists. “The more you move away from support structures and the more you take on, the greater your liabilities will be,” said Mr Murphy. “Where there is greater risk of causing harm to the patient if you are negligent, or make mistakes, then inevitably premiums are going to go up.”

Examine your policy

Insurers, inevitably, are urging pharmacists to examine their current policies, consider the extent of their cover and read the small print carefully. “The expectation is that pharmacists are going to have to extend their cover,” says Mr Coleman.

He advises that pharmacists who intend to deliver a new service should read their policy carefully, particularly the sections on exclusions and conditions, and contact their insurance provider.

The Royal Pharmaceutical Society reiterates this advice. Priya Sejpal, head of professional ethics at the Society, says: “Pharmacists must ensure that all their professional activities are covered by appropriate professional indemnity arrangements. If pharmacists are expanding their role or responsibilities, for example prescribing, they must ensure their indemnity insurance covers them.”

Contact with the insurance provider could be made by phone, however sending an e-mail will ensure there is an audit trail, says Mr Dean.

Obtain personal cover

It is not surprising that insurers advocate every pharmacist having their own individual cover, but Mr Murphy believes this gives an individual greater protection.

He says: “The traditional belief that employee pharmacists could always rely on their employment status and the fact that their employer would be held responsible for the actions of his staff, has now been substantially overtaken by events.”

He refers to the “peppermint water case” (in which a newly qualified pharmacist and a pre-registration trainee faced manslaughter proceedings after the death of a baby). “This showed clearly why it has now become so important, for employees to have insurance that is totally independent of their employer.”

He adds that having independent insurance will become even more important when the “responsible pharmacist” regulations are introduced, since this will increase the likelihood that pharmacists will face potential conflict situations with their employer if things go wrong.

Mr Dean, who has personal indemnity insurance, says “historically, locum pharmacists had not always bothered to carry their own insurance — if they worked in a pharmacy they would have been covered by the policy for where they were working.”

Now, he believes that an individual cannot be sure of the extent to which he or she is covered, without taking out personal cover and having sight of the policy.

The NPA offers a policy to its members who are pharmacy owners with £10m indemnity and legal advice cover. Mr Coleman warns that while this may sound “astronomical”, there have been instances where a lower level of cover (eg, £2–5m) has been exceeded, after consideration of legal costs.

Mr Murphy recommends personal indemnity of at least £5m for an individual pharmacist, citing the case launched by US citizen Cathy Horton against her doctor and Lloydspharmacy after being misprescribed treatment for a minor ailment. She claimed more than £5m in damages, although in March 2007, a High Court judge capped the compensation at £1.43m (The Pharmaceutical Journal 2006;277:595). However, Mr Murphy adds that the PDA endeavours to resolve all issues before they reach court.

Insurers suggest now is the time for pharmacists to review their insurance cover and ensure that they not leave themselves vulnerable to litigation as a result of an expanded service portfolio.