Cannabis Insurance

When it comes to cannabis insurance, there can be a lot of misconceptions and myths around the topic. From small to large operations, our Cannabis Insurance policies and services are designed to meet the needs of any type of establishment. Whether it’s a small dispensary or a full-service grow operation, our team of Cannabis Insurance brokers specializes in determining the needs of your company and drafting the best policy for your company.

Types Of Cannabis Insurance Coverage

Cannabis insurance comes in many forms and has several coverage options. While not all lines of coverage are required for your policy, there are some extended coverage options that protect from the unique risks that cannabis organizations often inherit. Without ample coverage, your cannabis operation may find itself facing liability for a situation that is not covered under base policies. Outlined below are the fourteen cannabis insurance options that your organization should consider when purchasing cannabis insurance.

General Liability Insurance

MFE General Liability Insurance policies protect you and your company from claims of bodily injury and property damage that may occur at your establishment. General Liability Insurance for dispensaries and grow operations cover third-party lawsuits that may occur during a claim. A “third-party” can be anyone other than the insured’s employees and workers (e.g., a cannabis cultivator working at a grow house). With our General Liability Insurance, your company can focus on selling or cultivating cannabis with the peace of mind that your dispensary or grow operations is protected from a wide range of potential liability issues with MFE’s Cannabis Insurance.

What Does General Liability Insurance Cover?

Adding a General Liability Insurance policy for your company covers accidents involving those who are not employed by your company. If they make a claim against your company, your policy will step in to pay for attorney fees, settlements, and any other costs relating to the lawsuit. It may even cover the injured party’s immediate medical expenses and the cost of repairing or replacing their damaged property.

For example: A customer walking into your dispensary trips and falls through the door entrance. If they sustain any bodily injuries while visiting your dispensary, it is within their right to sue you for medical expenses and damages. The accrued amount of damages can be very expensive, depending on the severity of their injuries and legal fees. Say the customer entering your dispensary breaks their wrist after tripping over the door entrance, which affects their quality of work, your company could be subjected to a large number of fees. In the event that this happens, you or your company can make a claim on your General Liability policy to cover litigation costs.

Product Liability Insurance

Product Liability Insurance protects you and your company against liabilities causing injury or damage from the use of your product. These claims can be brought against you and your company by an individual or a group of individuals that may have experienced similar injuries. Because the cannabis industry is a relatively new industry, this also means there are many consumers in this industry who are new to the product being served. Having said that, the potential for adverse effects and negative reactions to the product is higher than any other industry on the market. This leaves cannabis cultivators and sellers susceptible to claims that their product caused the consumer harm. This should be of great concern to companies who manufacture and/or sell cannabis, as loss of filed claims could result in the liquidation of their business and/or loss of their cannabis growing and selling licenses. The Product Liability Insurance policy at MFE Insurance provides your company with the protection it needs.

How Does Product Liability Insurance Apply To My Business?

As a grower, distributor, or dispensary, you automatically carry a product liability exposure as a result of selling an actual product. Let’s say someone claims they inhaled your product and it causes an injury resulting in bodily injury, your company could be found responsible. Studies show that claims have been brought against growers as a result of pesticides being present in their product, be sure to protect your company and its assets with a Product Liability Insurance policy with MFE’s Cannabis Insurance.

Crop & Inventory / Finished Stock Insurance

Any cannabis professional who grows crops or keeps an inventory of finished products should have cannabis crop insurance. Whether you are a grower, processor or dispensary owner, you can use crop and inventory/finished stock insurance to protect yourself from monetary and asset loss. MFE Insurance covers the actual living cannabis plant during and after growth, as well as after it has been trimmed, processed and prepared for consumer purchase.

How Does Cannabis Crop Insurance Apply To My Business?

For example: Your cannabis plants suffer insufficient growth or are damaged during growth and/or production. This could be the result of a natural disaster or an employee error. MFE Insurance’s Cannabis Crop & Inventory/Finished Stock Insurance will cover your operation/business for any loss in potential revenue that would have otherwise been generated by the product.

Cargo Insurance

Cannabis cargo that is deemed “irreplaceable,” such as harvested crops, can be covered through a cannabis cargo insurance policy. Cargo insurance protects cannabis organizations from financial loss in the event their irreplaceable cargo is lost, stolen, damaged and/or destroyed while being transported. This coverage also safeguards cannabis that is being loaded and unloaded from the vehicle, meaning the coverage always applies while the product is in motion.

How Does Cannabis Cargo Insurance Apply To My Business?

For example: A semi-truck that is carrying a supply of your organization’s cannabis is struck by another vehicle and the cannabis inside the truck is burnt and/or scattered on the ground. Whatever the case may be, you would be covered financially for the loss of cargo that is deemed irreplaceable. Cannabis cargo insurance will cover the cannabis in transit, regardless of fault.

Commercial Automobile Insurance

Commercial Auto Insurance covers owned, hired, borrowed, and or non-owned vehicles while used in your business. There are two main components to auto coverage, liability and physical damage. Auto liability is included to cover you against bodily injury and property damage done to others while physical damage (comprehensive & collision) covers you against theft and damage to the vehicle.

How Does Commercial Auto Insurance Apply To My Business?

If a cultivator or employee working for your company uses their own vehicle or a rented vehicle, you and your company are responsible for the vehicle and the people in the vehicle. You and your company are also responsible for any vehicles that are involved in an accident.

For example: An employee decides to take their personal vehicle to pick up lunch. During the car ride, your employee gets into an accident and causes damage to another person’s body and car. The MFE Commercial Auto Insurance policy covers the damages caused to both parties.

Workers Compensation Insurance

Workers Compensation Insurance is a program mandated by the state, which consists of payments (required by law) to be made to an employee who is injured or disabled in connection to their work. Cannabis industry rules and regulations will be explained by MFE Insurance consultants to give you and your company a better understanding of Cannabis Insurance policies. Our goal at MFE Insurance is to provide your company with the proper amount of coverage needed while offering competitive rates.

What Does Workers Compensation Insurance Cover?

The coverage for the Workers Compensation Insurance program varies on a state by state basis, so it is best to speak with an MFE Cannabis Insurance broker for information about your states specific coverage. Regardless of the state, Workers Compensation Insurance will cover the medical costs from the injury or illness, replacement income, costs to retrain, compensation for any permanent injuries, and benefits to survivors of workers who are killed at your business.

For example: An employee falls and hits their head on the counter at your dispensary. The MFE Workers Compensation Insurance policy will cover the medical expenses and the wages the employee would have received from their scheduled shifts.

Umbrella / Excess Liability Insurance

By adding an Excess Liability Insurance policy (Umbrella Liability Insurance) with Cannabis Insurance, you are providing your company with protection for claims that exceed the limits of your primary liability policy. The Excess Liability Insurance does not respond until the limits of your primary liability policy has been met. This policy is ideal for growing companies that run the risk of a potentially large loss, with coverage limits starting at $1,000,000.

What Does Umbrella / Excess Liability Insurance Cover?

For example: The building the dispensary you own collapses with customers inside, resulting in multiple injuries that exceed $3 million in medical payments. Your General Liability Insurance will cover the first $2 million, the Excess Liability will cover the remaining $1 million.

Equipment Breakdown Insurance

The Equipment Breakdown Insurance policy through MFE’s Cannabis Insurance covers essential machinery and equipment required to run and or operate your business. By obtaining an Equipment Breakdown Insurance policy, your business will continue to run smoothly following a breakdown incident. Once the incident has been covered, it may assist your business with either repairing the broken equipment or a full replacement. Equipment Breakdown Insurance policies come with a coverage limit, therefore once your limit has been met, any additional expenses turn into out-of-pocket costs for you and your business.

What Does Equipment Breakdown Insurance Cover?

At MFE, our Equipment Breakdown Insurance will cover essential machinery and equipment needed to operate your dispensary or grow operation such as heating lamps, industrial fans, hydroponic watering systems, computers, security systems, just to name a few. It is important to note that Equipment Breakdown Insurance does not cover machinery or equipment that has broken down due to age or improper maintenance.

Cyber Liability Insurance

Cyber Liability Insurance at MFE Insurance protects your company from data theft or information mismanagement. Cyber Liability Insurance covers your company’s liability in the event there is a data breach that involves social security numbers, credit card information, customer records, employee health records, etc.

How Does Cyber Insurance Apply To My Cannabis Business?

When data is stolen or lost, it’s nearly impossible to repair or replace this information, and the lost information could affect multiple clients or customers and create a whirlwind of legal issues. Adding Cyber Liability Insurance policy to your Cannabis Insurance at MFE Insurance will cover issues such as Legal Fees for defense in court, Judgments or Settlements, Customer Notifications (letters, etc.), Credit Monitoring Services, and Public Relation damage control services.

Loss of Income Insurance

Cannabis Loss of Income insurance protects your dispensary or grow operation against loss of income due to a covered loss over an extended period of time. Coverage limits are written based on a percentage of sales or the actual loss sustained. Obtaining Loss of Income Insurance has the potential to cover net losses your business may accrue and may cover relocation fees in the event you move to a new location.

How Does Loss of Income Insurance Apply To My Business?

By adding a Loss of Income Insurance policy, payroll, taxes, advertisements, mortgage payments, and similar needs are covered in the event a natural disaster occurs; leaving your dispensary or grow operation temporarily inoperable. The Loss of Income policy will also cover the fees required to reinstate your dispensary or grow operation at a temporary site, while the original location is being repaired.

Employee Benefits Insurance

With the MFE Employee Benefits Liability Insurance policy, any errors or omissions in the activation or application of your company’s employee benefits program is covered. MFE Employee Benefits Liability Insurance covers health and life insurance, retirement plans, and any other benefits offered by your company through the employee benefits program.

What Does Employee Benefits Insurance Cover?

Say a new employee signs up for your company’s health insurance plan, and has somehow been forgotten to be added to your company’s plan. The new employee files a medical claim and is denied coverage by the health insurance provider because the health insurance plan does not exist. With Employee Benefits Liability Insurance policy at MFE Insurance, the coverage that would have normally been covered if the health insurance plan was activated, would be paid for.

Crime Insurance For The Cannabis Industry

The Crime Insurance policy coverage includes several different types of coverage, including employee dishonesty coverage (theft by an employee), forgery or alteration coverage, computer fraud coverage, funds transfer fraud coverage; kidnap, money and securities coverage; and money orders and counterfeit money coverage.

How Does Crime Insurance Apply To My Business?

In the event that you have an employee who has been unlawfully transferring funds from your dispensary into another bank account and leaves before the issue has been noticed. An MFE Crime Insurance policy will provide protection for your company and the lost revenue.

Property Insurance

A cannabis Property Insurance policy covers business-related property damage that has occurred at your dispensary or grow operation. The Property Insurance policies at MFE will assist your dispensary or grow operation in repairing or replacing the covered damaged property. Common types of property include the building or structure, contents, fixtures, improvements and betterment’s, inventory, computers, and related hardware. Other beneficial property coverages include loss of income and extra expense, water backup of sewer or drain, and other beneficial enhancements.

How Does Property Insurance Apply To My Cannabis Business?

There are many examples where property insurance could come in use. In the event cultivator working in your grow operation accidentally breaks a pipe on the hydroponic system used to water all of the plants. As a part of our Cannabis Insurance products, the Property Insurance policy will assist in the repair or replacement of the system.

EPL Insurance

The Employment Practices Liability Insurance (EPLI) policy at MFE Insurance is designed to protect the employer against employee discrimination claims. Common discrimination claims against employers include age, sex, race, and disability. EPL Insurance also protects employers from claims such as wrongful termination, sexual or non-sexual harassment, glass ceilings, and other employment-related discrepancies. EPL policies can also include wage and hour coverage, which pays the defense costs for allegations relating to failure to pay overtime.

What Does EPLI Cover?

Say an employee at your dispensary files a discrimination claim against you because he or she thinks they did not receive a raise they believed they deserved due to their age. Although EPL Insurance cannot guarantee coverage for all claims against employers, your company is much more prepared with an EPLI policy in place. The Cannabis Insurance brokers at MFE Insurance can provide you and your company with important employment law education, to better prepare you and your company, in the event of a claim.

Product Recall Insurance

Product recalls are a risk any business that sells consumable products may face at any moment. Recalls normally happen after the products have been shipped and stocked on shelves. Often times most businesses are not prepared to face this type of financial burden and can potentially damage the reputation of their brand.

How does product recall insurance apply to my cannabis business?

Recalls happen almost every day, they are inevitable. However, you can protect your business from potential losses. Product recall insurance can help with the associated costs involved in retrieving the recalled products. These costs include but are not limited to:

• Shipment costs
• Disposal costs
• Restocking costs
• Warehouse costs
• Contamination of other products
• Loss of profits
• Extortion costs

Additionally, product safety standards and protocols are constantly changing. Manufacturers and distributors of consumable products need to be aware of the constant changes and protect themselves with the proper insurance. Protect your business with product recall insurance from MFE Insurance, your business will get reimbursed for its losses.

Speak With MFE Insurance To Get Started

If your cannabis operation needs proper insurance to keep up with the unique risks and liabilities often faced in the industry, do not hesitate to contact us. Our team will ensure you receive the best possible cannabis insurance policy to protect your organization while ensuring you are not paying for any coverage options you do not require. Reach out to MFE Insurance at 213.266.7990 or apply through our online application form using the button below.

Apply For Cannabis Insurance