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?

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

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

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?

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

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?

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

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