Obtaining a state license to operate a medical marijuana provisioning center is one of the biggest hurdles for Michigan business owners. The legalization of marijuana took effect on December 6, 2018, which means it’s still a new industry for the state. From a state and local regulatory perspective, there have been more black and white rules and regulations that have been established.
Insurance Policies That Provisioning Centers Need
That has been helpful in creating more certainties in how a provisioning center can run their operations. The Medical Marihuana Facilities Licensing Act (MMFLA) established insurance requirements that set requirements licensees must meet to obtain and maintain their license. To meet the requirements of MMFLA, an owner should obtain the right insurance policies to cover them and protect their business from financial loss. Cannabis insurance policies hold many different areas of coverage, and should be acquired for all cannabis business owners.
Protect Yourself From Product Liability
Carrying products containing cannabis can pose a risk because the effects of cannabis aren’t always predictable. There are many new consumers who are being introduced to the product for the first time. The adverse effects of these products are higher than those of other industries.
It doesn’t matter if it’s not a product that is cultivated by your business. Everyone involved in the production chain from the cannabis cultivator to the seller can be charged with legal claims of consumer harm caused by the product.
Under MMFLA, section 408(1), it is stated that “Before the board grants or renews any license under this act, the licensee or applicant shall file with the department proof of financial responsibility for liability for bodily injury to lawful users resulting from the manufacture, distribution, transportation, or sale of adulterated marijuana or adulterated marijuana-infused product in an amount not less than $100,000.00. The proof of financial responsibility may be in the form of cash, unencumbered securities, a liability insurance policy, or a constant value bond executed by a surety company authorized to do business in this state…”
Product liability is a must-have for a Michigan provisioning center. It protects you and your business from these liabilities claims of a product that has caused damage or injury to consumers. This protection includes claims by individuals or groups of individuals who had similar experiences.
Ensure Safety Of Employees And Customers On Premises
Every retail business should have a policy that includes General Liability insurance. This type of policy is intended to protect a business owner from claims of bodily injury and property damage that occurs at your location.
General liability insurance covers third-party claims against your business. For example, a customer who enters your dispensary falls while in your store could make a claim against your business. A General Liability insurance policy will protect your business from the financial obligations of paying the attorney fees, settlements and other lawsuit-related costs.
This policy does not cover your employees so you must also limit your risk exposure there. A provisioning center holds large amounts of cash on hand and valuable products. Additionally, the location must have an appropriate ventilation system due to the potential impairment that employees are exposed to because of the product. It can contribute to an accident or even long-term health issues.
Worker’s Compensation Insurance covers an employee who becomes injured or disabled as a result of their work. It is mandated by many states, including Michigan.
Losses From Mechanical Breakdowns
Machinery or equipment that is necessary to run or operate your business is essential. When an incident occurs, it prevents the operation from running smoothly while the equipment is being repaired or replaced.
If this is an out-of-pocket cost for your business, it is typically expensive to cover. A breakdown may even slow down your ability to get back up and running as you obtain funds for its repair or replacement.
Instead of taking the risk, it is best to get a policy for Equipment Breakdown Insurance. This will protect the machinery and equipment so that if a breakdown occurs, you will get assistance for repairing or replacing the broken equipment. Equipment that’s covered includes computers, security systems, industrial fans, and hydrophobic watering systems.
Preserve Your Property from Damage
Covering your business’s property is very important to ensure your business can go back to business as usual after it suffers from property damage. Fixtures, improvements, inventory, and the building or structure itself are among the common covered properties in a policy.
Let’s say that overnight your business was damaged by vandalism and theft. A property insurance policy will provide the necessary security of knowing that your damages and losses are covered. You can rest assured that your business will be covered so the focus can be on running your business.
Contact the Cannabis Insurance Firm
MFE Insurance offers comprehensive insurance plans to provisioning centers across Michigan. We understand the risks involved in your business and can develop the right plan to protect your business interests. Contact us today to get your business protected adequately. Reach out today by phone at (213) 266-7990 to get started.