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Why is Insurance Higher for Medical Supply Stores?

Insurance for medical supply stores can indeed be more expensive and this is attributed to the number of risks and possible liabilities these businesses face.

As the owner and operator of a medical supply store, you provide doctor’s offices, hospitals, and various other medical facilities the tools their patients need.

You may also sell items to the general public, such as oxygen tanks, walkers, wheelchairs, needles, and syringes. Without a doubt, this service or task is crucial, as the products you distribute could be potentially life-saving.

However, since this equipment and supplies you provide directly impact lives, if anything goes wrong, there is a chance that you and your store could end up being hit with serious legal and financial issues.

Medical supply stores are known to provide a variety of dental, medical, and surgical instruments and supplies. Some also offer equipment rentals, such as breathing apparatus, crutches, portable oxygen tanks, or wheelchairs. They may also offer sterilization of equipment services to dentists, physicians, or surgeons.

Medical supply stores face many of the same risks business owners in any industry face. For instance, third parties, such as vendors or customers, could trip, fall, and suffer an injury at your store, or a work-related accident could injure an employee.

Also, note that you may face risks that are unique to your specific industry. For example, equipment that you provide could malfunction and potentially harm a customer or not deliver the therapy that it is intended to, or a mix-up could occur and you could supply the wrong product.

Although you do your best to make sure that everything runs smoothly, sometimes problems can’t be avoided. Therefore, it is important to expect the unexpected by being properly insured and this is why insurance companies will charge you more.

In addition to the financial protection that insurance provides, being properly covered ensures that you are compliant with the law. In order to distribute medical equipment and supplies, certain types of coverage are compulsory. If you fail to carry the necessary commercial insurance, you could end up having to deal with legal issues.

Risks and Exposure Faced By Medical Supply Stores That Increases Cost of Insurance

The core reason for the rise in health insurance costs are rising healthcare, lack of insurer competition, and lack of transparency to help consumers make informed decisions. Nonetheless, there are risks and exposures that influence the high cost of medical supply store insurance.

  1. Premises Liability Exposure

This risk or exposure is quite moderate owing to the limited number of visitors to the store. To prevent slips and falls, there should be good lighting and adequate aisle space. All goods should be kept on easily reached shelves so customers do not pull items down on themselves.

Also, ensure that flooring is in good condition with no frayed or worn spots on the carpet and any cracks or holes in flooring.

Steps and uneven floor surfaces will have to be prominently marked. Sufficient exits are expected to be provided and be well marked with backup lighting systems in case of power failure.

Waiting areas should be provided as some customers may be sick or have impaired mobility. Parking lots and sidewalks will also need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.

If the business is open after dark, there should be adequate lighting and appropriate security for the area. There should be a disaster plan in place for unexpected emergencies.

  1. Personal Injury Exposure

Note that this risk can come from allegations of discrimination, invasion of customers’ privacy, and from apprehending and detaining suspected shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises. Employees are expected to be trained to deal with such delicate situations properly.

  1. Property Exposures

Have it in mind that is exposures are low if ignition sources are limited to electrical wiring, heating, and cooling equipment.

Oxygen tanks can explode and should be kept away from heat sources. Should a fire occur; substantial fire and water damage may result due to the sterile condition required of the supplies, which may have to be disposed of due to contamination.

  1. Products Liability Exposure

This risk is normally low if no rental or sterilization operations are involved. If either is done, exposure increases massively as customers may be injured by improperly sterilized or maintained equipment.

Foreign-made items should come from a domestic-based wholesaler. Any direct importer should be considered as a product manufacturer.

  1. Workers Compensation Exposures

This risk can also be moderate due to employees standing for long hours, the use of computers, and restocking which requires lifting and placing items on shelves.

Have it in mind that steady standing can result in musculoskeletal disorders of the back, legs, or feet. Trips, slips, and falls are common.

Meanwhile, when work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome.

Lifting can incite back injury, hernia, sprains, and strains. Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting.

Also, note that shelves should be easily accessible for storage. Stepladders should be made available. Housekeeping in storage areas is necessary to prevent trips and falls. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals.

In almost every retail business, hold-ups are possible. Employees should be trained to respond in a prescribed manner. With repair and rental reconditioning there may be exposure to machinery and welding which can result in cuts and bruises.

Delivery of oxygen tanks and other equipment can result in injuries from overturn and collision. Sterilization operations can result in employees being exposed to contaminants.

  1. Inland Marine Exposures

These risks and exposures are primarily from accounts receivable if the store offers credit, computers to transact sales, and valuable papers and records for customers’ and vendors’ information.

Backup copies of all records, including computer files, should be made and stored off premises. If items are delivered to customers or between stores, goods in transit coverage will be needed.

  1. Business Auto Exposure

Note that this may be limited to hired non-owned liability due to employees running errands. If delivery services are offered, all employees driving vehicles are expected to have valid licenses and acceptable MVRs.

Vehicles will also be regularly maintained with records kept. The transportation of oxygen tanks requires special loading and unloading. Tanks must be properly secured during transport to avoid an explosion.

  1. Crime Exposures

These are from employee dishonesty and theft of money and securities either from holdup or safe burglary. Background checks are expected to be conducted on all employees handling money.

Also, there must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.

Receipting, inventory monitoring, and regular auditing are important. Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises. Bank drops should be made regularly to prevent a build-up of cash on the premises.


The specific type of medical, surgical, and hospital supply store insurance coverage you will need depends on numerous factors; for instance, the size of your operation, the type of products you supply, and the size and location of your company.

To understand the type of medical, surgical, and hospital store insurance coverage you will need for your operation, speak with an experienced broker who specializes in business insurance.