Wholesalers and distributors supplying medicines to healthcare businesses, pharmacies or other customers.

Where the sector’s exposures differ

Storage, traceability, picking errors, product returns and subcontracted transport can all feature in allegations against a distributor. A distributor may hold stock for another party or act as importer or brand owner, changing its exposures. Product and revenue information should identify those additional roles.

Insurance covers to assess

Consider public and products liability, recall where available, liability for customers’ goods, stock and transit, and errors and omissions for specified activities. Check temperature-related exclusions and whether replacement of damaged medicines or a customer’s financial loss is covered.

Policy features to discuss

We can discuss the insured activities, insured entities, territorial limits, defence costs, excesses and aggregate limits offered by insurers. If a customer requests particular insurance, let us know so we can consider the available cover. Legal interpretation, drafting and negotiation of contracts should be handled by your legal adviser.

An illustrative exposure

A customer alleges that medicines were supplied after an incorrect storage event. Stock damage and alleged patient injury need different assessment.

This is a hypothetical example to explain cover questions, not a Mercantile client case or a paid claim. The proposed policy must be assessed before assuming any response.

Information needed for a quotation

Medicine types; temperature requirements; title to stock; warehouses and transport arrangements; traceability; returns procedures; contractual limits and exports.

Also provide turnover, wages, subcontractor and labour-hire costs, the legal entities to insure, existing schedules and wordings, claims or known circumstances, and planned changes. A clear activity breakdown helps us approach suitable markets and compare the terms offered.

Common questions

Does a supplier’s certificate of insurance protect the distributor?

Not by itself. Check the insured entities and activities described in the policy. We can discuss the distributor’s own insurance options; legal questions about supply agreements or indemnities should be referred to a legal adviser.

Can Mercantile review existing insurance?

Yes. Send the schedule and wording together with a description of your activities and key contracts. We can examine significant gaps and approach suitable insurers, subject to their appetite and acceptance. We assist Australian businesses from our Norwest NSW office.

Related insurance sectors

Our service focuses on insurance placement and policy cover. Product classification, approvals and regulatory compliance are matters for your regulatory adviser or the relevant authority.

Return to pharmaceutical insurance or explore all Life Science insurance sectors.

• Pharmaceutical Manufacturer and Importer Insurance
• Pharmaceutical Licence Holder and Sponsor Insurance
• Pharmaceutical Contract Manufacturer Insurance

Prepared by Mercantile Insurance Brokers. Updated 30 September 2026. General information for Australian businesses. Availability and cover depend on insurer acceptance, policy terms, exclusions, limits and deductibles.