There is little data on how frequently growers and dispensaries are victims of crimes—and even less on how commonly the perpetrators turn out to be the employees. But there is little doubt that the high-value, easy-to-sell commodity is prone to theft. To make matters worse, standard risk mitigation techniques such as insurance may not provide adequate protection.
According to a 2019 Financial Markets, Institutions, and Instruments analysis, while cannabis producers face several risks in their operations, including employee theft, insurance providers can limit coverage for losses resulting from criminal conduct and unlawful activities. According to the article, in at least one example, a federal district judge deemed insurance coverage unenforceable since cannabis is still prohibited.
What Is Employee Theft Protection?
Employee theft coverage, often known as employee dishonesty coverage, protects businesses from employee theft. Employee theft coverage pays for losses or damages to money, securities, and other property caused directly by theft perpetrated by an employee, whether identifiable or not, acting alone or in conjunction with others.
Employee theft coverage addresses the void created by standard business insurance. Employee theft coverage is a fundamental aspect of a regular business crime policy, and it can be acquired separately or in conjunction with other crime plans. While a conventional commercial property policy may give some limited coverage for third-party criminal damages, it often excludes property losses related to employee theft.
Why Is Employee Theft Coverage Important?
You expose your company to several hazards if you do not have comprehensive commercial and criminal insurance coverage. If an unanticipated catastrophe occurs, you may be left with no financial options. This forces you to pay your losses on your own, which may pose substantial challenges to the long-term viability of your business.
As a result, most firms, including those in the cannabis industry, opt for commercial criminal insurance to ensure a well-rounded coverage package. With specialist techniques and solutions, you can protect your company from various continuous operational threats at all times.
Almost 75% of employees have admitted that they have stolen something from their employer. That number is increasing every year. Especially in the cannabis industry, it is much higher. Therefore employee theft coverage is a must for every dispensary.
6 Tips That Can Help You From Employee Theft In Cannabis Business
According to research, employee theft accounts for up to 90% of losses recorded by cannabis firms. This is why you must be proactive in preventing internal theft.
Monitoring, Monitoring, Monitoring
Video monitoring is mandated by state legislation throughout a cannabis operation. Davidson refers to cameras as “overt preventative measures” since workers know they are under surveillance, reducing their motive to steal money or produce.
Safeguard Your Intellectual Property
Cannabis business owners are concerned about intellectual property theft because of the time and effort spent developing exceptional genetics and resurrecting old breeds. All workers must sign non-disclosure and non-compete agreements as their onboarding documentation.
During transportation, both cash and cannabis are susceptible. Employees are less likely to do something wrong if they can see the cameras and know they are watched.
Take Care of Inventory Checks
Have a straightforward procedure in place for how staff will handle cannabis items and cash. Because product moves in and out of your retail cannabis business daily, frequent inventory checks are critical for preventing loss. Your employees should count money at least twice daily, once before opening and once after closing. These counts should ideally occur after every shift change so that you can determine who was working at the time of the loss.
Develop a Loyal and Faithful Team
The cannabis sector is notorious for its low pay and reliance on temporary, part-time employees to staff retail shops. However, when a dispensary pays a decent salary, recruits full-time employees with insurance, and even provides small profit-sharing plans, it goes a long way toward developing loyalty. Even if you have a cannabis retail A-team, assigning a manager or supervisor to each shift is a good idea. A well-cared-for employee is less likely to bite the hand that feeds them.
Treat Your Employees Well
If you believe in fair pay, good benefits, and treating employees with respect, ensure that the nursery staff feels appreciated. One cannabis owner said, “Theft happens when someone doesn’t feel like they’re treated nicely.” she further explains, “You want to make the task and the surroundings enticing enough that they don’t think about stealing all the time.”
How MFE Insurance Can Help You
There aren’t many insurance carriers that cover cannabis dispensaries. MFE Insurance specializes in offering high-quality insurance to state-licensed marijuana businesses.
MFE offers marijuana businesses a variety of cannabis insurance options depending on their specific needs. For a free quote for your marijuana dispensary company, contact MFE insurance online or call 213-266-7990 now.