The cannabis industry faces mounting challenges and risks, making it crucial for businesses in this niche to create a tailored risk management plan that includes insurance coverage. California state law mandates that all cannabis business owners have insurance. California only recently started providing property insurance to cannabis businesses.
Numerous insurance companies and brokers offer insurance plans tailored specifically for the cannabis industry. It is certainly getting easier to find insurance for your cannabis business, whether it is a dispensary, testing laboratory, hydroponic shop, delivery service, etc. However, this makes it all the more important to understand the insurance coverages available to you and most suitable to your needs.
Top 5 Best and Most Needed California Cannabis Insurance Policies
It’s your responsibility to ensure that your insurance complies with all applicable local, state, and federal laws. Robust coverage can help your business survive the evolving legal climate and general risks.
Here is a quick look at federal, state, and municipal insurance coverage options as a cannabis business owner in California:
1. General Liability Insurance
When applying for a cannabis license in California, cannabis firms must have a minimum of $2 million worth of general liability coverage of at least $1 million per loss. The state also requires a $5,000 security bond.
Most business applications that are not approved are due to not carrying the necessary insurance. Similarly, you need to take the necessary actions to inform the state if the cannabis business policies or insurance expires by contacting the BCC or Bureau of Cannabis Control within the first ten days.
2. Product Liability Insurance
Numerous cannabis businesses in California deal with allegations that their products damaged property or inflicted bodily harm. Regardless of how legitimate the claims might be, the asserted allegations, the associated attorney expenses, and legal fees could severely harm your company and result in considerable losses. MFE Insurance ensures that your specified financial obligations are taken care of.
3. Crop and Property Insurance
Growing marijuana and hemp demands a significant infrastructure improvement. This covers tools, security, seeds, lighting, and the harvest itself, which can be a high vulnerability point for the company or business. Cultivators must deal with risks and hazards when conducting their business, including vandalism, fires, equipment failure, and theft.
Thankfully, the appropriate cannabis insurance plan can safeguard your investment.
Among the most crucial insurance options for farmers are property and crop insurance. Crop insurance policies are more easily accessible for crops in controlled surroundings like greenhouses or storage facilities. Insurers are presently shifting toward accepting the idea of external crops due to the growth in hemp growers and the acceptance of the Farm Bill in 2018.
4. Professional Liability Insurance
For the marijuana ecosystem to be healthy, testing facilities are essential. The correct cannabis insurance package can assist you in navigating the labyrinth of potential litigation created by changing federal and state legislation and protecting you against any mistakes or errors that might occur during your marijuana-growing operations.
For laboratories to report to the authorities on data sets that affect public safety, professional liability, often known as omissions & errors, is essential. The equipment needed to run a high-volume marijuana lab makes property coverage necessary.
5. Commercial Auto-Insurance Policy
Among the cannabis industry’s most interesting elements is the part of making deliveries. You may encounter a complex set of dangers in this sector regardless of whether your business is a distribution enterprise or a delivery-only facility. An employee’s auto insurance would not offer coverage in case of a robbery or accident because this policy typically prohibits business use.
As a result, your company may be held responsible for property damage to automobiles, injury claims, and medical expenses. Your approach to risk management in the cannabis business is better by utilizing hired, non-owned, and owned policies. A recommended method is to use freight insurance for your commodities when they depart from your location.
Get Cannabis Business Insurance That Will Secure Your Business Now With MFE Insurance
Legal cannabis businesses face a distinctive set of dangers and need specialized cannabis insurance knowledge, which is challenging to acquire in the present market, mainly when dealing with brokers.
The situation is gradually improving, though, and partnering with the right insurance company that is aware of the particular requirements of your marijuana business will make it simpler than ever before to develop an efficient risk management strategy.
Contact the knowledgeable brokers at MFE Insurance for a comprehensive, no-obligation consultation if you prefer to ensure that your marijuana firm has the precise coverage it requires without any risky and expensive shortfalls.