Legal cannabis is currently one of the fastest growing industries in the country, with Grand View Research estimating that it will reach $146.4 billion by the year 2025. As this industry continues its ascent, marijuana businesses are facing a variety of challenges and risks that must be mitigated.
Cannabis businesses are at risk of lawsuits related to everything from pesticide residues in products to inadequate warning labels and unsafe handling during manufacturing, and this comes on top of the typical risks that all types of retail businesses face. Therefore, it is important for medical marijuana dispensaries to obtain proper insurance.
Outlined here are some of the most frequently asked questions about medical marijuana dispensary insurance.
Is Insurance Really Necessary For All Medical Marijuana Dispensaries?
Many businesses are looking to reduce expenses, but insurance is not an area where taking a shortcut is recommended. If something happens to your dispensary or your marijuana, like theft or a fire, would you be able to start all over again without suffering any financial stress?
Very few businesses are in a position to answer affirmatively, and even those that do have the cash flow to rebound can recognize that it does not make good financial sense to leave it up to chance. Legal marijuana dispensary insurance protects you and your business from losing money should something unexpected occur.
What Is The Most Important Type Of Insurance Coverage For Medical Marijuana Dispensaries To Buy?
Although it is wise to obtain a variety of policies that cover different aspects of your business, product liability insurance is one of the most crucial policies to have in place as this will cover you for a loss related to your product. One of the most important features of this type of coverage is its ability to cover defense costs outside the policy limit for legal fees stemming from lawsuits brought against you.
For example, it can cover your expenses if a patient decides to sue on the grounds that a certain medical marijuana product you offer had a negative impact on their health or created serious side effects. Even if their claim is false, you could still lose in court and end up having to pay a big settlement.
Is There A Specific Type Of Coverage For Medicine?
Medicine coverage gives cannabis dispensaries inventory coverage against risks like theft and fire. It is also possible to obtain insurance coverage for the time when the product is being transported from its cultivation facility to the dispensary.
Can I Get Coverage For Equipment Breakdowns?
Any essential equipment and machinery that you need to run your business can be covered with an equipment breakdown insurance policy. This may cover items such as heating lamps, hydroponic watering systems, security systems and industrial fans. However, it does not cover equipment that breaks down due to poor maintenance or age.
Is Crop Coverage Available?
Many insurance companies offer insurance policies that cover marijuana crops for specific peril coverages. This typically only applies to indoor growing, such as growing in lockable greenhouses.
Any cannabis company that grows crops or keeps an inventory of finished crops needs cannabis crop insurance, from growers and processors to dispensaries. This covers the living plant during and after growth and extends to after it has been processed and prepped for purchase. It can be useful if, for example, your plants are damaged during production or fail to grow significantly due to employee error or natural disaster.
Do Dispensaries Need Cyber Liability Coverage?
Any business that uses computers for any reason can benefit from cyber liability insurance, which protects against data theft and information mismanagement. This can prove useful in data breaches that involve customer records, credit card and social security numbers, and employee health records.
How Can I Protect My Dispensary’s Delivery Vehicles And Drivers?
Commercial auto insurance policies for dispensaries cover all owned, borrowed and non-owned vehicles used for business purposes. It includes auto liability to cover for bodily injury and property damage inflicted on others, while comprehensive and collision components cover theft and damage to the vehicle.
Is My Dispensary Required To Get Workers’ Compensation Insurance?
Most states require businesses of all types to get workers’ compensation insurance, which covers payments to employees who are disabled or injured in connection with their work. The specific aspects it covers vary by state, but it generally covers medical costs related to illness or injury, compensation for permanent injuries, benefits to survivors of any workers who are killed at the business, retraining costs and replacement income.
What If I Have More Questions?
If you have more questions about the type of insurance available to dispensaries and the coverage you need, get in touch with MFE Insurance online today. Our team can explain the different policies on offer and help you ensure you get the right coverage for your needs at a competitive rate.