Pharmacy medication

Recent storm damage highlights the need for adequate cold chain stock insurance cover

The devastating storms that hit Victoria’s Dandenong Ranges a few weeks ago, saw 56,000 homes without power and many residents are still without power today. The power outages have also affected pharmacies in these areas with customers unable to get to them due to road closures and no internet making electronic prescriptions and payments hard to process and stock ordering.

With no power, many pharmacies couldn’t keep cold chain prescriptions and products cold and unfortunately were unable to use the stock. This has meant many pharmacies have needed to put a claim for stock spoilage against their insurance cover which have been covered under their insurance policy as the loss is due to a storm.

Pharmacy Insurance specialist, Carollo Horton and Associates CEO, Giuseppe Carollo, have found with the recent storm claims and with the cost and number of cold chain prescriptions and products on the increase, many stores had underinsured their fridge stock, should the loss have not been due to an insurable event.  Some claims on stock values were in excess of $20,000.

“Pharmacies need to regularly review all levels of insurance cover, including increasing areas such as fridge stock values. It’s not uncommon to have a pharmacy with $20,000 of fridge stock now stored in a $8,000 full height fridge,” Carollo said.

Carollo noted many of these cold chain prescriptions and products are critical medications in the communities they work in. Also, if pharmacies are choosing to join the delivery of Australia’s COVID-19 vaccine rollout this will put more pressure on fridge storage and stock values.

“In some instances, with power outages your local energy provider may provide compensation for repairs to your fridge but not for consequential loss to the stock inside the fridge. It’s important for pharmacies to check with their energy provider as this can vary between states and energy providers.” 

Carollo encouraged pharmacy owners and managers to contact their insurance broker to ensure adequate coverage for fridge stock.

He also suggested to minimise loss during a power outage is to have a fridge temperature sensor alarm connected to a mobile alert system so if the fridge temperature goes out of range or the power goes out it will send a notification.

Contact Carollo Horton today to make sure you have adequate insurance cover for your fridge stock.