Compounding Pharmacy Insurance Coverage Checklist
The coverages a compounding pharmacy business may carry — core, prevalent, and situational — why each matters, and the gap most often missed.
Pull out your current policy and check the box next to any coverage you can confirm is already in place — anything unchecked is worth a quick conversation with your advisor. Coverage checklist for 503A compounding pharmacies and 503B outsourcing facilities. Priorities reflect typical exposure for this class; confirm against your actual products and customers.
Tick each coverage you can confirm you carry — anything left unticked is a good question for your next policy review.
| Have it? | Coverage | Why this business needs it | Priority |
|---|---|---|---|
| Pharmacist Professional Liability | Covers dispensing and compounding errors by pharmacists and technicians. | Core | |
| Products Liability (Compounded Drugs) | Covers injuries from contaminated or mis-strength products — confirm compounding is not excluded. | Core | |
| Product Recall | Covers notification, retrieval, and destruction costs after a recall. | Core | |
| General Liability | Covers premises injuries. | Core | |
| Workers' Compensation / Employer's Liability | Covers staff, including hazardous drug exposure. | Core | |
| Regulatory / Billing Errors (E&O) | Covers defense of payer audits and False Claims Act investigations. | Prevalent | |
| Cyber / Privacy Liability | Covers patient records and prescription data. | Prevalent | |
| Property / Spoilage | Covers equipment, inventory, and refrigerated product loss. | Prevalent | |
| Directors & Officers | Covers owners in regulator and investor actions. | Situational | |
| Umbrella / Excess Liability | Adds limits for multi-patient contamination events. | Prevalent |
The coverage gap most often missed
The gap most often missed by compounders is the batch. One contaminated lot can injure many patients at once — the 2012 New England Compounding Center outbreak killed at least 64 people and led to a $200 million settlement. Many pharmacy policies exclude or sublimit compounding, sterile products, or out-of-state shipping. Confirm products liability names compounding without a low sublimit, add recall coverage, and keep USP 797 testing current.
Send us the checklist and we'll review your compounding pharmacy coverage line by line, then market it across multiple carriers that compete for your account.
Related: Compounding Pharmacy Insurance · Compounding Pharmacy Supplemental (apply) · All coverage checklists
Frequently asked questions
What insurance does a compounding pharmacy business need?
The core coverages for a compounding pharmacy business are Pharmacist Professional Liability, Products Liability (Compounded Drugs), Product Recall, General Liability, Workers' Compensation / Employer's Liability. This checklist also lists the prevalent and situational coverages worth considering, with a plain-English note on why each matters.
Is this checklist insurance advice?
No. It is a free educational tool to help you have a more informed conversation with a licensed professional. It affords no coverage and is not insurance, legal, or financial advice — only your actual policy language governs what is and isn't covered.
Can Cory Washington & Co. review my compounding pharmacy coverage?
Yes. Share your checklist and we'll review your program line by line, market your account across multiple carriers, and explain the trade-offs in plain English. Cory Washington & Co. LLC is licensed in all 50 states.
This checklist is a free educational tool from Cory Washington & Co. to help you review your own coverage and have a more informed conversation with a licensed insurance professional. It is general information only — not insurance, legal, or financial advice, and not a recommendation to buy, change, or cancel any policy. Coverage terms, availability, limits, and requirements vary by policy, carrier, and state, and only the language in your actual policy governs what is and isn’t covered. Checking or leaving blank any item above does not indicate that you are adequately insured or under-insured. Using this checklist does not create a client, agency, or fiduciary relationship. Always consult a licensed professional about your specific situation.