The cannabis industry is still relatively new, and there has been a recent trend of utilizing new ways to reach customers. One such new trend is offering delivery service, which, while offering potential benefits, has also opened the dispensary up to new risks. Many dispensaries that are considering or currently offering delivery services wonder whether they need to acquire delivery driver insurance.
According to a survey conducted by the U.S. Census Bureau, the on-demand food/grocery delivery industry has attracted more than 5.5 million monthly customers with $4.6 billion being spent annually. There seems to be an obvious financial benefit to dispensaries offering delivery services, as it increases revenue while also not requiring added overhead to operations. However, without proper insurance coverage, your business may be vulnerable to the increased risk of theft, litigation, or other events that could cause a financial impact.
Coronavirus Forces Shops to Deliver
Recently, a dispensary chain in Colorado received the state’s first delivery license. Colorado legalized the medical use of marijuana back in 2000, and it’s recreational use was made legal in 2013. Between 2013 and 2020, delivery services were not offered. However, the coronavirus pandemic has prompted quick change.
Dispensaries, like many retailers, have been forced to close in areas where they are not considered an essential business. In the areas that have not been closed, steps have been implemented to protect workers and customers from the spread of disease. Many dispensaries have turned to curbside service to minimize human contact.
Delivery is another viable option to allow dispensaries to reach their customers at their door. In states — such as California — that have had legalized dispensary delivery for some time, they are seeing an influx of orders.
Business Liability for Vehicles and Passengers
Whether you own or rent a company vehicle or your employee uses their personal vehicle to make deliveries, your company shoulders the liability for anything that happens. This includes damage to a company vehicle, damage to any other cars that were involved in an accident, and possibly medical expenses for any injuries.
As long as the employee is doing something that is within the scope of his or her job, you are liable for any injuries or damage. For example, if an employee has gone to pick up food for the rest of the staff and then gets involved in an accident, the business may be liable for any damages or injuries. Without auto insurance, your dispensary could be found responsible for paying the expenses of both parties out-of-pocket.
Vehicles Not Owned By Business
Your business can still be held liable for damages, even if an accident doesn’t involve a company-owned vehicle. For delivery service where the driver must use their personal vehicle, you may require that they carry insurance.
Keep in mind that your employee will generally be carrying a personal auto policy. That doesn’t usually include using their vehicles for business purposes. They might have a policy which allows them to use their personal vehicles for incidental business use. For example, to run an errand, go to the bank, or other similar activities. For any type of transport of passengers or packages, however, a personal auto policy will usually not cover it. Regardless of whether you have delivery driver insurance, it’s your business that will end up covering an accident if your employee’s insurance does not cover the damage.
What Business Automobile Insurance Covers
Not having an auto policy for your business can expose you to the possibility of legal fees and out-of-pocket expenses. Getting coverage is the best way to protect your business interests and your employees.
Business automobile insurance can be written to cover vehicles that are owned by your employees or owned/rented/borrowed by your business. It can offer protection for your most routine business affairs as well as for your cannabis delivery service.
Business auto insurance has two components that make up the vehicle coverage: Liability and Physical Damage. Bodily injuries and property damage that is caused by others make up the auto liability component. Physical damage, which may include collision and comprehensive, is what covers vehicle damage and theft.
Reach Out to MFE to Cover Your Drivers
MFE is dedicated to serving the needs of dispensaries and full-service grow operations. They provide a variety of cannabis insurance policies to cover the needs of your business. This includes general liability insurance, commercial automobile insurance, umbrella insurance, and many other types.
MFE has locations in New York, Detroit, and Los Angeles. To get their customers the most competitive prices, they quote and place insurance through multiple carriers. Call MFE at 213-266-7990 or visit us online to learn more about starting a delivery service or to get a free quote.