Marijuana has become big business in recent years and marijuana cultivators play a critical role in the process. Cannabis requires certain conditions to thrive, including sufficient nutrients, a strict pH balance, warmth, light, water, and ideal levels of humidity. From germination to flowering, each phase of the process must be stringently overlooked to ensure a healthy harvest. As marijuana cultivators typically do not work directly with the public, you may think your risks are minimal. Unfortunately, cultivators face various liabilities that could have a significant effect on their ability to grow and produce product. Take the time to understand the risks you face and how cannabis insurance can protect you.
Even the best designed marijuana facilities face a high risk of fire or explosion. The presence of compressed gas contained in highly-pressurized cylinders puts marijuana cultivators at serious risk due to the possibility of rupture. If excessive pressure builds up or a valve breaks or leaks, these cylinders can be extremely dangerous. There is also a risk of fire or explosion if the cylinders are exposed to extreme heat. Fires can also occur due to exploding grow lights and similar issues that put the entire facility in harm’s way.
As the cannabis industry continues to grow at a rapid pace, theft has become more commonplace. Theft can occur in a number of ways. In some instances, a theft is connected to an employee who may be taking the product to sell for profit. Theft can also occur from outside the business, such as product that is stolen during delivery. As marijuana is not yet legal in all states, the threat of theft is common.
Equipment breakdown is a common problem that can have serious repercussions for marijuana cultivators. When an important piece of equipment simply breaks down or requires repairs before it can be used, production slows down which affects output and in turn, profit. Purchasing new equipment does not necessarily keep you protected against equipment breakdown. A power surge could suddenly occur, causing your ventilation to shut down. Without proper ventilation, air movement is stalled, increasing the likelihood of mold growth and pest infestations. An equipment breakdown policy covers all sorts of equipment, ranging from security systems to fire detectors.
Workplace accidents can cause damage to marijuana facilities, often resulting in tens of thousands of dollars in damages. Property damage can range from minor to severe, but no matter how big or small the problem, you do not want the repair costs coming out of your own pocket. Weather-related damage from events like hail or wind storms can cause damage to your property in just minutes. Vandalism, water damage from cooling systems, and plumbing accidents are also major concerns for those who work in marijuana facilities. Having specific coverage for these types of events can ensure that you are properly covered if property damage should occur.
In the marijuana industry, product is transported from business to business until it ends up in the hands of consumers. Along the way, there is a risk that a vehicle accident could occur, causing these products to become damaged and possibly unusable. Having a cargo insurance policy can help protect your business in the event that your cannabis product is damaged, lost, or stolen while it is being loaded, transported, or unloaded. For example, if a delivery driver is traveling with the product and he or she is involved in a vehicle accident, you could be held liable for any damages. However, the right insurance policy would provide coverage for these losses.
Product liability claims are a major concern among many professionals in the marijuana industry. Due to the nature of the product, there is a serious risk that a consumer could experience an illness or unwanted side effects from the use or consumption of the product. Having product liability insurance to protect against these risks is not just a good idea, but essential for anyone involved in the production or retail of risky products. A standard liability insurance policy helps protect against all types of claims, such as those associated with misrepresented or mislabeled products that are deemed harmful.
Learn More About Cannabis Insurance
If you are a marijuana cultivator or are involved in the cannabis industry in some other way, ask yourself a simple question: How confident do you feel about your liability risk? If it’s significant (or adequate), you may want to consider acquiring cannabis insurance. Cannabis insurance is made up of a number of essential policies designed to provide broad coverage to those involved in the high-risk cannabis industry. For more information about why marijuana cultivators need to acquire cannabis insurance or to see how you can apply for a policy, contact the cannabis insurance brokers at MFE Insurance today.