Cannabis legalization has made great strides in recent years. In fact, marijuana is now legal for recreational use in ten states and Washington, DC, as well as legal for medical purposes in 33 states. Moreover, as of May 2019, a total of 15 states have decriminalized marijuana. With the demand for cannabis increasing at a rapid rate, more and more businesses are opening dispensaries to the public. While running a cannabis dispensary can be highly profitable, it also comes with certain risks. Having cannabis insurance can help protect your dispensary from potential liability issues and lawsuits.
What Is Cannabis Insurance?
With a cannabis insurance policy, you can manage the unique risks associated with the operation of medical and recreational marijuana retail facilities. Businesses involved in the cannabis industry can face risks that could result in serious lawsuits. With a cannabis insurance policy, these businesses can stay protected from liabilities relating to property damage, equipment breakdown, product recalls, and similar issues. Whether you are already providing medical and/or recreational marijuana to customers, or you are interested in opening a new dispensary in your area, it is crucial to take the necessary steps to protect your personal and business interests.
What Type of Coverage Does Cannabis Insurance Provide?
It is important to understand that the legal sale of marijuana requires insurance that is beyond your typical insurance policy. This means that in most cases, a general liability policy on its own is not going to cut it. Instead, you need to create a policy that includes a wide range of coverage options designed to cover all of the unique risks that your business faces on a day-to-day basis.
A comprehensive cannabis insurance policy typically includes:
- General Liability Insurance. A general liability insurance policy provides your business with protection from claims of bodily injury and property damage to third parties that may occur in your facility or on your property. This type of insurance is often required if you lease a property or if you have a contract with partners.
- Product Liability Insurance. Product liability insurance acts as an extension of general liability insurance. This insurance provides coverage in the event that you are found liable for causing bodily injury or any type of damage to a third party due to a defective product.
- Commercial Auto Insurance. Cannabis businesses often have vehicles used for deliveries and other travel tasks. With commercial automobile insurance, you can stay protected against personal injury and property damage in the event of a work-related car accident.
- Workers Compensation Insurance. This type of insurance is designed to protect your employees from certain work-related illnesses, accidents, and even death. Workers compensation insurance will generally cover lost wages and medical costs for workers who become ill or injured on the job.
- Excess Liability Insurance. Excess liability insurance provides business owners with insurance limits that are above their primary liability policies.
- Equipment Breakdown Insurance. Equipment breakdown insurance provides coverage for loss due to electrical or mechanical breakdown of nearly any type of equipment.
- Cyber Liability Insurance. With cyber liability insurance, your business can stay protected from certain liabilities relating to a data breach that results in the release of personal information, such as credit card numbers.
- Loss of Income Insurance. Having loss of income insurance can be invaluable as it helps pay for specific continuing expenses for your business, such as taxes, payroll, and mortgage payments.
- Employee Benefits Insurance. Employee benefits insurance protects your business against lawsuits and claims that may arise relating to the management of employee benefits.
- Crime Insurance. Crime insurance provides coverage for loss of certain assets, money, and some types of fraud by third parties.
- Property Insurance. With property insurance, your business can stay protected against risks like theft, fire, and weather damage.
- EPL Insurance. Employment practices liability (EPL) insurance provides coverage to employers against legal claims made by employees that allege harassment, wrongful termination, discrimination, or other employment-related issues.
Why Is Cannabis Insurance Important?
Even if your cannabis dispensary follows all legal rules and regulations to a T, cannabis dispensaries still face certain risks. Having a comprehensive cannabis insurance policy in place can help keep your business protected against lawsuits that could put your finances and reputation at risk.
While marijuana dispensaries are becoming mainstream, many mainstream insurance carriers will not insure your business due to certain industry risks. Fortunately, the specialty insurance providers at MFE Insurance provide all of the aforementioned cannabis insurance policies, and have extensive experience in the cannabis insurance industry. Whether you’re operating a small dispensary or a full service grow operation, know that our team of cannabis insurance brokers are here to help safeguard your company from uncertain risk. For more information about cannabis insurance or to obtain a cannabis insurance policy, contact the brokers at MFE Insurance today!