Professional liability insurance: It matters more than you think!

This article first appeared in Communication Journal, a publication of Pharmacists Manitoba. 

Every October and November when they renew their practicing licenses, Manitoba pharmacists declare to the College of Pharmacists of Manitoba that they have met their obligation to secure adequate professional liability insurance coverage, as per section 123 of The Pharmaceutical Regulation. A failure to have sufficient insurance coverage is, in and of itself, an act of professional misconduct for which a pharmacist can face discipline.

What many pharmacists don’t know, however, is that many insurance policies that comply with the minimum requirements under the Regulation do not provide coverage for legal fees incurred when responding to regulatory complaints or charges of professional misconduct lodged against pharmacists. Without this coverage, some pharmacists may be unable to obtain the advice and the representation that they need in such circumstances.

Professional liability insurance requirements and applicability

Like other healthcare professionals, pharmacists owe a duty of care to their patients to carry out their services with reasonable skill, care and diligence. They are not required to be perfect or error-free. Rather, they are expected to practice at the standard of care expected of a normal, prudent pharmacist of the same experience and circumstances. The standard of care in a given case will be determined with reference to regulatory standards of practice and to expert evidence regarding the usual practices of other pharmacists, among other things.

If a pharmacist exercises their clinical judgment to the standard of care expected of them, they will not be found to have been negligent, even if they committed an error or even if their practice could have been “better.”

Unless a pharmacist is registered with the College in an emergency situation under section 14 of The Pharmaceutical Act, every pharmacist registered in Manitoba must be covered by professional liability insurance that provides a minimum of $2,000,000 per claim or per occurrence and a minimum $4,000,000 annual aggregate.

These minimum requirements are geared towards a pharmacist’s civil liability to patients or others if the pharmacist is alleged to have made a professional error or omission and is sued for damages. In such a case, the requisite professional liability insurance policy should be triggered and provide coverage both for the costs of defending the lawsuit and for any damages for which the pharmacist is found liable (subject to any applicable exclusions or exceptions, to the limits of the insurance and to the specific terms of the policy).

Coverage for responding to professional regulatory matters

Although it is important for professional liability insurance policies to provide coverage for civil actions against a pharmacist, it is much more likely that a pharmacist will need to turn to insurance for coverage when responding to a regulatory complaint. As discussed in a previous Insight, pharmacists can work with a lawyer to develop an honest, fact-driven, reasonable and unemotional response to a complaint. This response is a pharmacist’s first chance to provide important context and information to the complaints committee in the hope that the committee finds that there is either little or no basis for the complaint. When a proactive approach is taken early on in the complaints process, the chances are significantly improved for a complaint to be either dismissed or dealt with more promptly and with less serious consequences.

However, in some cases, the complaints committee may censure the pharmacist, require that the pharmacist enter into a practice undertaking or refer the matter to the discipline committee, among other things. In these scenarios, legal counsel may become involved in providing strategic advice in the background, negotiating the terms of an undertaking or providing full defence services in responding to the charge(s) of professional conduct being considered by the discipline committee.

Even where all efforts are taken to keep legal costs down, legal costs in such a scenario can be significant. As such, and in order to avoid circumstances where pharmacists must pay for their own lawyer out-of-pocket or go without representation, it is essential that pharmacists take a look at their insurance policies and work with their insurance brokers or agents to ensure that they have their desired level and type of coverage in place – as always, it is a case of “you get what you pay for.” Once a pharmacist is fully informed about the options for coverage, they can then make an informed decision about what is right for them, considering the premiums associated with the different insurance coverage options.

Note that, where a given professional liability policy does contain coverage for regulatory matters, it will generally provide coverage for legal fees up to a certain limit (commonly up to $50,000). However, these policies will usually not provide coverage for any fines or requirements to pay costs imposed on the pharmacist after a finding of professional misconduct is made out.

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