If you rely upon the transport of cannabis or cannabis-related products, you may need cannabis cargo insurance. Cannabis businesses that rely upon the transportation of cash and other securities that are essential to the success of the business can also be insured with a cannabis cargo insurance policy. Outlined below are some of the conditions to consider when determining whether or not a cannabis cargo insurance policy is right for your business.
What Is Cannabis Cargo Insurance?
Cannabis cargo insurance is an insurance policy that protects you financially if something were to happen to your cannabis crop or products while in transit. For example, dispensary owners may need to file a cannabis cargo insurance claim if their inventory is stolen while en route to the dispensary. In the same scenario, the dispensary may be at risk of lost profits and having to replace the cost of the stolen inventory.
What Business Types Could Benefit From Cargo Insurance?
Every cannabis business should consider how cannabis cargo insurance can benefit them. Most notably, retailers, dispensaries, manufacturers, wholesalers and marijuana delivery businesses should strongly consider a cargo insurance policy. Some marijuana growers may also benefit from a cargo insurance policy as well.
Retailers And Dispensaries
Dispensaries most often rely upon the delivery of cannabis and cannabis products to their store. If there are disruptions in the delivery process, even if the business does not directly deliver products, they may become liable for lost profits without cannabis cargo insurance. Subsequently, retailers and dispensaries are strongly encouraged to purchase a cannabis cargo insurance policy. This protects deliveries from the warehouse (or point of shipment) to their final destination, as well as every stop in between.
Manufacturers
A manufacturer, or a business they work with, delivers manufactured cannabis goods, they may also need a cannabis cargo insurance. Otherwise, the manufacturer may be liable for lost goods during transport. A cannabis cargo insurance policy ensures that any goods damaged or lost in delivery are replaced at a limited expense to the manufacturing business.
Wholesalers/Distributors
A wholesaler (or distributor) is different from a manufacturer in that they sell goods in larger quantities, typically to retailers and dispensaries. Subsequently, they rely upon the safe and fast delivery of their cannabis and cannabis products to their customers. Cannabis cargo insurance also protects wholesalers who rely upon delivery services.
Marijuana Delivery
Last but certainly not least, any business that offers a marijuana delivery service as their primary or secondary service should purchase cannabis cargo insurance. Not only is this essential for mitigating financial risk if something were to occur to the cannabis or products during delivery, but many businesses are not willing to work with a marijuana delivery service that is not adequately insured with cargo insurance.
The Benefits Of A Cannabis Cargo Insurance Policy
Cannabis cargo insurance is not required for all cannabis businesses. However, it is strongly encouraged for businesses that rely upon successful delivery to and/or from their place of business. The benefits cannabis businesses receive from a cannabis cargo insurance policy include:
- Replacement of lost inventory
- Financial risk mitigation
- Peace of mind
- Successful operations security
As mentioned, many businesses and consumers will only work with companies that are adequately insured as a way to minimize their own financial risk. Obtaining a cannabis cargo insurance policy helps ensure your business is seen as trustworthy within the industry.
The Risks Of Not Having Cannabis Cargo Insurance
Without a cannabis cargo insurance policy, companies risk substantial loss of profits and having to cover the cost of replacement of any lost or damaged cannabis inventory or products. Depending on the size of your business operation, this could add up to tens of thousands of dollars (or more), which can significantly impact the long-term outlook of your company. It can also affect your ability to attract new consumers and clients, especially if you are a business-to-business operation.
How To Choose The Right Cargo Insurance for Your Business
There are many insurance providers that will attempt to secure your business without explaining why you need the policy they are suggesting or charging you for coverages that you do not need. It is important to choose a cannabis cargo insurance provider that understands the cannabis industry and can help you personalize your policy based on your business’ specific cannabis insurance needs and preferences.
Discuss Cannabis Cargo Insurance With MFE Insurance
If your cannabis business relies upon the transport of cannabis crops or products, you can benefit from cannabis cargo insurance coverage. If you would like to discuss your cannabis insurance needs in greater detail and determine if cannabis cargo insurance is right for your policy, contact the cannabis insurance professionals at MFE Insurance today.