If you own or operate a marijuana dispensary, you are probably already aware of the various risks involved. Without the right insurance policies under your belt, your business could be left vulnerable to a wide range of risks and liabilities. Product liability insurance is one such policy you should maintain to ensure that your marijuana dispensary stays protected against claims of property damage or personal injury caused by products that you have sold or supplied.
What Exactly Is Product Liability Insurance?
If you have a business that manufacturers goods, product liability insurance is a must. As the owner of a marijuana dispensary, you are responsible for every product that you produce and sell. If any of your products result in damage to someone’s property, causes injury, or makes someone ill, you are ultimately liable for any damages following the sale. Product liability-related lawsuits do not come cheap either. In fact, an article published by Insurance Journal stated that product liability claims cost an average of $35,000. If you do not have product liability insurance, this expense could come out of your own pocket.
One of the most common concerns associated with the marijuana dispensary business is the possibility of adverse reactions to the products sold. Marijuana is considered a psychoactive drug and has the ability to alter mood and affect nearly every organ in the body. If one of your customers experience an adverse reaction or has found your product to be defective in any way, that person has the option to file a lawsuit against your business. To prevent financial ruin, it is important to keep your business protected by having a safeguard like product liability insurance.
What Does Product Liability Insurance Cover?
Understanding what your product liability insurance policy covers can help ensure that you are prepared in the event of an incident. While a majority of product liability claims arise from design defects, other types of products are also to blame for product-related lawsuits, such as manufacturing, warning, or use defects. Design defects refers to product issues that were present before the product was ever made. Claims relating to manufacturing defects refer to problems that may have occurred when the product was being created or assembled. If the seller failed to provide adequate warnings or labels on proper use and risks, a warning or use defect claim may be made.
In some instances, a product liability claim may fall under strict liability. This type of claim is generally based on the absence of negligence in which the property damage or personal injury resulted from improper use of the product. While you cannot always prevent product-related lawsuits from coming your way, you can ensure that you are not left financially responsible for any losses that incur. Having a solid product liability insurance policy not only protects you against damage caused by defective products, or even wrongful death cases, but also provides peace of mind.
Benefits Of Product Liability Insurance For Dispensaries
Many business owners overlook the importance of product liability insurance until it is too late. Unlike many other types of businesses, a marijuana dispensary’s products make up the bulk of their services, meaning any issues that arise are likely due to problems with these goods. There is a misconception that any liability from marijuana products fall to the manufacturer or grower. This is not always true. A dispensary may also be found responsible for any damages. For example, if a dispensary sells a product that has been contaminated by handling, or has been affected by mold, bacteria, or fungus due to poor storage, a product liability policy may cover any resulting lawsuits.
Most established growers test their products for herbicides, insecticides, bacteria, and similar substances that could cause harm if ingested. However, not all growers provide the same level of quality control. If you are not aware of these practices and continue to sell products that may contain these substances, your business could be found liable if the product causes harm to someone. A product liability insurance policy can help defend your dispensary against liability claims from a customer who has been harmed.
Learn More About Product Liability Insurance
Whether your marijuana dispensary manufacturers or simply sells products to consumers, it is important to be aware of the various product-related risks your business faces on a day-to-day basis. While product liability insurance is not legally required in all states, it can be a highly valuable policy to have. As the marijuana industry continues to evolve and expand, you will want to stay ahead of the competition by operating a business that can deal with any situation that arises. For more information about the benefits of product liability insurance or to acquire a policy for your marijuana dispensary, contact the cannabis insurance brokers today at MFE Insurance.