As the benefits of medical marijuana gain greater public attention and legalization makes access easier than ever, cannabis-related businesses are enjoying unprecedented opportunity.
Many Massachusetts companies have been producing and selling marijuana legally, but it is still important to protect your business against risk.
Some insurance companies are now offering dedicated cannabis insurance policies to protect such businesses from the unique risks they face in this new and growing market sector.
What Is Massachusetts Cannabis Insurance?
Massachusetts cannabis insurance is a type of commercial insurance policy created to address the risks associated with cannabis-related businesses in the state, such as medical marijuana dispensaries.
These are typically package policies that include several types of relevant and useful coverage to ensure all the bases are covered.
These offerings vary depending on the provider, so not all of them will offer the same protection. Outlined below are some of the protections that are usually offered by this type of policy in Massachusetts.
Commercial Property Coverage
This is an essential type of policy for any business. Although it can be bought on its own, it is usually bundled into a wider program.
In the case of a dispensary, commercial property coverage would cover the building owned by the dispensary and most of the contents found within it.
General Liability Coverage
Another common type of policy, this covers accidents that occur on the premises of a cannabis-related business.
Workers’ Compensation Insurance
Workers’ compensation is required by the state of Massachusetts for every business owner. This is part of a system that aims to ensure every worker is protected if they suffer a job-related illness or injury in the workplace.
Professional Liability Coverage
Professional liability, also known as errors & omissions coverage, is useful in covering erroneous advice that an employee of a cannabis business gives to a customer that results in some type of harm.
Cannabis professionals who are asked for expert advice or recommendations that cause a negative outcome could be held liable for faulty guidance or professional negligence, and this type of overage can offer protection from such exposure. Cannabis testing labs also need professional liability courage.
This is a type of insurance that can specifically cover the medical marijuana that a dispensary or similar business has in stock.
Product Liability Coverage
Like other consumer products such as food and wine, cannabis and hemp pose a risk as they could make someone sick or cause an adverse reaction.
Product liability coverage covers any illnesses or injuries that are caused by the products sold by a dispensary or other cannabis-related business.
Businesses that manufacture or process cannabis products could face product liability and recalls and must follow strict regulations for consumer-based products.
Cyber Liability Coverage
This coverage is useful for online attacks and data breaches. Cyber liability covers product data as well as sensitive employee and client data. This is particularly important for those cannabis businesses that have access to their clients’ medical records.
Business Interruption And Business Income Coverage
Business interruption insurance covers expenses caused by a temporary shutdown in response to certain types of natural disasters, while business income insurance covers lost earnings should the business be forced to close its doors on account of a covered disaster.
Commercial Auto Insurance
A commercial auto insurance policy covers losses that involve vehicles being operated as part of the course of doing business.
Massachusetts, like many states, requires that businesses that have dedicated vehicles as well as those who use their own vehicles for business duties have this type of protection in place.
Cannabis Crop Insurance
Any cannabis professional who grows crops needs crop insurance to protect their assets. It could be useful for losses in potential revenue stemming from employee errors or natural disasters that adversely impact the growth of crops.
Which Businesses In Massachusetts Need Marijuana Dispensary Insurance?
Most marijuana dispensaries in the state need a marijuana dispensary insurance policy, along with businesses that are not dispensaries but do participate in producing or selling medical marijuana. Failing to get this type of protection can expose a business to significant risks that could be financially devastating.
All businesses must have general liability, product liability and workers’ compensation insurance. The other types of insurance mentioned above are strongly recommended for these types of businesses.
Although most of the businesses that seek cannabis insurance are dispensaries, businesses that sell marijuana wholesale; process the stalks, leaves or flowers of cannabis; or cultivate hemp will also find this type of insurance useful.
If your business is segmented, be sure to mention this to your insurance agent. Many medical marijuana businesses in Massachusetts have segmented themselves into a few distinct entities for tax or legal purposes.
This can lead to a complex insurance situation, so it is important to discuss this status with an agent who has experience in the field.
Reach Out To The Cannabis Insurance Professionals
Whether you are a dispensary, grower or distributor, it is vital to ensure you have the proper coverage in place. Reach out to the cannabis insurance team at MFE Insurance Brokerage to learn more about your options.
Our experienced cannabis insurance brokers can discuss the right cannabis insurance package to ensure your business is fully protected.