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Explained: The professional indemnity requirements for pharmacy workers

Reena Popat and Hammad Naveed from Carter Bond solicitors give a refresher on the professional indemnity requirements in the pharmacy industry

Professional indemnity is designed to protect pharmacists and pharmacy owners from any lawsuits, investigations, proceedings that have been filed by patients as well as other third parties who allege harm or loss as a consequence of an improper service, product, or counsel you have provided them with.

Simply put, it covers claims regarding their conduct, such as a dispensing error.

Read more: Community Pharmacy Scotland launches insurance service

Professional indemnity is still applicable for any products or advice you provide for customers, clients, or others, even if this is provided for free, as you could still be liable for claims for incorrect advice.


How is this relevant to the pharmacy industry and what are the existing types of arrangements?


Professional indemnity protects those who work in any area of pharmacy, be it a pharmacist, pharmacy technician, dispensing assistant, or anyone providing services as a locum against any potential liabilities for products or advice given.

Under Article 32 of the Pharmacy Order 2010, a professional indemnity agreement can be covered by:

  • an existing insurance policy
  • an arrangement made by your employer on your behalf to indemnify you, if you are employed
  • a professional indemnity agreement arranged through a trade union, defence organisation, or other professional body that wishes to indemnify you
  • any combination of the above.

The more mainstream or recognisable providers include the National Pharmacy Association and Pharmacist’s Defence Association.

It is important to consider the basis on which the insurance cover is being provided, for example whether it is on a ‘claims occurring’ basis or a ‘claims made’ basis.

A ‘claims occurring’ basis would cover an error or issue that occurred during the period of the policy, even if the claim itself was made after the pharmacist might have retired or, if an owner, has sold their business.

A ‘claims made’ policy indicates that the insurer would only help with the incident if the claim occurred in the same year that the error occurred.

For example, with this kind of policy, if a dispensing error occurred in 2019 but the patient made a claim in 2022, the insurer under a ‘claims made’ policy would not be required to deal with the claim as the claim did not arise in 2019.

Read more: RPS mulls offering personal professional indemnity insurance to members

There are options to obtain ‘retroactive cover’ to help cover the gap between the date of an incident and the date on which a claim is made.

The regulator for professional indemnity for pharmacists and related roles in the UK is the General Pharmaceutical Council (GPhC).

The GPhC holds an up-to-date registry of all pharmacies, registered pharmacists and pharmaceutical technicians.


What does the professional indemnity have to cover?


Professional indemnity covers employers as well as their employees against any malpractice, wrongdoing, harm, products, services, or advice that was given where a patient or customer has been harmed or has incurred loss of any kind in relation to any of the services or dealings.
Depending on the insurance provider, the cover can also include a combination of professional or legal advice, confidential 24-hour helplines, representation in relation to any claims, training resources, and up-to-date industry news.

Read more: DH: ‘No plans’ to grant state indemnity to community pharmacy teams 

The type of cover is very similar for both employed and self-employed persons in the pharmacy industry.
Professional indemnity cover is required throughout the UK. However the requirements and type of cover available may vary slightly depending on who the insurance provider or underwriter is, the size of the pharmacy, or the experience of the pharmacists (for example if there are any trainee pharmacists).


Are the same arrangements in place for those who are employed or self-employed?


Although the type of policy should be substantially the same between employed and self-employed pharmacists and pharmacy technicians, while employed persons are covered under their employer’s policy, self-employed or locum pharmacists need to obtain their own policy as they often work in multiple locations and are in business for themselves.
Therefore, where you are self-employed, you must hold valid professional indemnity cover from an appropriate professional body or defence union.
This is a legal requirement under the Pharmacy Order 2010 to practice in the UK. This must be held on your own account and there are no exceptions to not having professional indemnity cover.

Read more: Can pharmacy professionals be sued for COVID vax negligence?

It is illegal to practice without a professional indemnity insurance policy and it is crucial that you fully understand the terms of your policy.

Therefore, you should make sure to review the policy schedule to see exactly what is covered and for how much, whether there is an excess and a copy of your policy wording to understand what circumstances/incidents might be excluded or void the policy.

For those who are employed, the employer will usually hold a professional indemnity agreement with an appropriate professional body to cover anyone working under the company against any liabilities.

You should be provided with full cover against any relevant risks related to your role. If you are unsure of this, it is best to check with your employer or, if self-employed, then with your insurance provider.


Are the same arrangements in place for those who are patient facing and non-patient facing?


The level of cover will usually vary between the type of role you are in. Where you are formally employed, your employer will usually decide on an appropriate level of professional indemnity cover, which will cover any aspects of your role that could leave you or your employer liable to any claims.

Read more: Is pharmacists’ indemnity insurance reflecting their expanded roles? 

If you are self-employed, it is best to consult with your insurer or solicitor to determine the best level of cover that will be appropriate for your role.


What does an individual who is employed but also self-employed have to do?


If you are formally employed, you will be covered under your employer’s professional indemnity agreement for the duties that you perform as part of your employment alongside their subsequent risks.

This covers both you and your employer against any potential claims or lawsuits for your actions, advice, or products that are provided under the name of your employer.

You will require separate professional indemnity cover for the duties you perform as part of being self-employed as you will only be liable for yourself.

Just because you are covered under your employer does not mean you are covered to operate as self-employed as well, unless specified by your employer and their cover.


Are the existing arrangements fit for purpose?


There is little to suggest that the existing insurance arrangements are not fit for purpose, but there is no one-size fits all policy and it is important to speak to your indemnity insurance provider to be sure that the policy you are seeking is fit for purpose for your specific circumstances.
However, there is always room for improvement and it is important to be able to adapt to change.
For example although perhaps slightly unrelated, during the onset of COVID-19, many pharmacy owners sought to update their insurance policies to cover business interruption that they might have suffered specifically because of COVID-19, whether that be because of a lockdown, but more appropriately, where staff or locums might have been off ill.

Read more: Health minister ‘looking into’ pharmacists’ indemnity insurance issues 

The GPhC is consistently updating its guidance, standards and legislation, meaning that occasionally professional indemnity coverage may also need to be updated in order to comply with the legislation and standards changes.
If you want to ensure that your professional indemnity coverage is up to date, it is best to check with your employer or coverage provider, who will be able to give you a full breakdown of what your coverage includes.
Finally, there is no such thing as a ‘daft question’ – particularly in this climate. If you are not sure, just ask.


Reena Popat is managing partner corporate commercial and Hammad Naveed is senior associate corporate commercial at Carter Bond solicitors.

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