Dispensaries are becoming a more common business venture than ever before. With this rise in popularity has come a simultaneous increase in crime targeting dispensaries; some major cities have seen events such as dispensary robberies at record highs each successive year for the last three to five years.
Unfortunately, many cannabis businesses discover too late that, if they had insurance at all, it likely doesn’t cover the damage that they sustained as a result of a crime. This could be due to exceptions in their policy or even the wrong type of policy for their needs. Marijuana dispensaries can benefit from crime insurance offered by an agency that focuses on this market niche.
How Does Crime Insurance Work
Crime insurance is a type of coverage that protects a business from losses related to criminal activity. The exact types of coverage (and exclusions) will depend on the policy that the business selects, which agency they are working with, and even where the business is located. If a crime is committed at the business, crime insurance policies will pay for the monetary value of the damage or loss.
However, it’s up to the business to fix things; for example, the insurance policy will not make sure that a broken window is repaired, only that the business is reimbursed for the cost of the window.
The Top Coverages Crime Insurance Provides
Crime insurance can vary in which protections it offers, it is important to check regarding dispensary policies with the insurance company. However, in general, the most common types of coverage that you can enjoy with a robust crime insurance policy generally can include the following:
Few businesses are robbed as often as dispensaries due to the recent legal inclusion in some states. Denver reports that 10% of its total robberies for the entire year happened at marijuana businesses. It’s likely that the reason for this unusually high incidence is that burglars believe that dispensaries keep large amounts of cash on hand. Depending on the details of your policy, you could be reimbursed for both cash stolen and products or property taken.
When it comes to rates of fraud and forgery, these behaviors tend to be more common in sectors where participation could affect someone’s reputation. Marijuana is no exception, and dispensaries may have to deal with fraudulent checks or fake money as part of their business dealings. If the facility doesn’t realize until later that the money is fraudulent, crime insurance can make sure they still get paid.
Because dispensaries tend to operate on a cash basis more than other types of businesses, they are also more prone to employee behavior issues due to the nature of the industry. These include, for example, theft by workers, who may pocket a dollar or two from transactions or steal company property. While it’s smart for dispensaries to install security cameras and other theft prevention strategies, crime insurance can reimburse a business for the value of what employees stole.
Qualifying for Crime Insurance as a Dispensary
One of the biggest hurdles when acquiring crime insurance as a dispensary isn’t haggling over what’s included in the policy—it’s qualifying at all. Dispensaries are often excluded from insurance policies, typically for reasons ranging from their distribution of potentially mind-altering substances to their sale of items that could be considered to pose a health risk. Insurance companies may even directly exclude any business that works in the marijuana industry as part of the verbiage in their insurance contracts.
To qualify for crime insurance as a cannabis dispensary, businesses will need to work with an agency that focuses on the marijuana industry. These companies not only avoid the common cannabis and vape exclusions in insurance policies but can also offer coverage that is more tailored to the unique needs of dispensaries. Crime insurance that directly targets the most common dispensary challenges is just one example.
Dispensaries can also benefit from other types of coverage that are fine-tuned to their needs, such as workers’ compensation, property coverage, employment practices liability, general liability, and even product recall insurance. A professional can help you to understand which blend of coverages is ideal for your specific dispensary’s needs.
Get Insurance for Dispensary Risks with a Dedicated Team
Whether you’re just considering marijuana dispensary insurance for the first time or you’ve been faced with a crime and discovered that your existing protection isn’t enough, be sure to work with an insurance agency that focuses on the unique needs of the cannabis industry.
MFE Insurance ensures that all of its clients receive the personalized help they need to create a perfect mix of coverage to minimize their risks. Reach out to learn more or to schedule an appointment to discuss your options or call to get a direct quote at 213-266-7990.