The cannabis sector has seen substantial expansion in recent years, thanks to the legalization of marijuana for medical and recreational use in a majority of states. Every day, new cannabis dispensaries open their doors for business.
First-time business owners may not be aware of all the hazards involved in starting a company. Furthermore, cannabis dispensary operations have specific dangers apart from standard business hazards. That’s why insuring cannabis businesses is becoming a huge concern for business owners.
Most businesses understand the need for liability insurance that covers them in case of an accident on the premises. Learn more about how cannabis insurance works and some key insurance policies your dispensary needs.
Cannabis Insurance Policy- How Does It Work?
While there is no such thing as cannabis insurance, businesses can look into adequate coverage for their operations. An example of this could be general liability insurance. This fundamental policy is crucial for most companies because it covers customer injuries and property damage.
What To Keep In Mind While Picking A Policy
Like any other business, cannabis businesses and dispensaries face many risks as well as the additional unique industry risks of running a marijuana company—transporting expensive goods, and growing and selling a consumable product.
It is important to be extra vigilant while sifting through the numerous insurance policies to employ. Here are the two main strategies to help you secure your business and its assets.
Using Excess Insurance Coverage To Minimize The Cost Of Uncertainty
Unlike many others, the medicinal and recreational cannabis industry is relatively new. This means as a business owner. You are vulnerable to unprecedented claims that your clients can file. It also becomes difficult to calculate how much those claims might cost. It is often better to look into multiple insurance policies for different operations to be safe.
Industries that have been around for longer have it much easier—professionals have years of data on which to base predictions. This data could be about premiums, claims, and the different types of risks.
Quantify What You Can
Perhaps the highest cost for your cannabis business is that of machinery, and you also have to pay for the equipment’s regular upkeep. Still, as industry standards increase, you’ll have to keep upgrading your machines. Because of this, you need to stay up to date on the costs of all your capital.
Types Of Cannabis Insurance Policies
There are many different forms of cannabis insurance, and you’ll typically have a more extensive selection of coverage options to choose from. Without an insurance policy, you may be exposed to liability for a situation that is not covered under base policies.
These are some key cannabis insurance policies offered by MFE Insurance:
General Liability Insurance
As mentioned previously, general liability insurance covers accidents involving third parties. In some cases, the insurance also covers any immediate medical benefits incurred by the third party and any damage to the equipment on the property. If a claim is made against your company, the general liability insurance policy steps in to pay for attorney fees, settlements, and other legal fees.
Product Liability Insurance
As the name suggests, a product liability insurance policy is geared toward protecting you and your firm from any injuries or damage that result from the use of your product.
Since the cannabis industry is relatively young, it’s important to remember that many of its clients are new to the product being served. This essentially means that it carries the risk of having a higher potential for adverse effects than any other industry. To protect themselves from claims that their products caused negative reactions, many cannabis businesses invest in product liability insurance.
Cargo insurance covers cannabis cargo deemed “irreplaceable,” such as harvested crops. Essentially, cargo insurance insures cannabis organizations if this irreplaceable cargo is lost or stolen. In addition to this, our comprehensive cargo insurance policy covers cannabis that is being loaded and unloaded from trucks.
Crop/ Finished Stock Insurance
Any cannabis business that grows its own crops needs to invest in a finished stock insurance policy. This policy comes in handy even if you process stock in your dispensary. Finished stock insurance policies cover the living cannabis plant during and after growth, as well as covering plants as they get trimmed, processed, and prepared for the consumer.
Get Comprehensive Cannabis Insurance Policies From MFE Insurance
If your marijuana operations need proper insurance to safeguard against industry risks, do not hesitate to contact our experts at MFE Insurance. Our brokers and industry specialists offer comprehensive cannabis insurance and risk consulting solutions customized to your business’s needs. Let’s find out how we can help you maximize growth and profit.