The west coast is a popular place, with enjoyable weather for most of the year and a wide range of popular activities and hobbies to enjoy. This also makes it a hotbed for the development of cannabis which explains why so many new strains originate in the area.
With this consistent growth in the marijuana industry centered on the west coast, it naturally follows that interest in the types of insurance coverage for marijuana businesses has also significantly increased.
As a result of the growing interest, dispensaries have seen an increase in insurance options over the years, but it has taken concerted effort and outspoken advocacy to reach this point. That means that many dispensaries may not yet be aware of all of the changes that have happened.
Getting dispensary insurance for the west coast is now more simple than ever through a reputable insurer that focuses on the cannabis industry, but you will still need to carefully consider which types of coverage suit your business.
What Is the Cannabis Insurance Initiative?
The main reason coverage for cannabis-related businesses has increased in the last five years is due to direct effort on the part of the public and, as a consequence, local politicians as well.
For example, the Cannabis and Insurance Initiative through the CDI (California Department of Insurance) has been working to consistently add brokers to its list of insurers who support businesses in the cannabis industry.
Previously, most insurers would not agree to insure a business if it was related to cannabis in any way. Even if the company did not sell marijuana directly, selling supplies such as vapes was often enough to get the business turned down for coverage.
Many policies contain provisions that refuse coverage of products that can cause “harm to health,” and this definition was taken broadly by insurers to include marijuana.
However, initiatives similar to the one in California have encouraged more brokers to create unique types of insurance or packages that cater to the cannabis industry. If your business is on the west coast and needs dispensary insurance, review the following packages for the types of coverage that you will need.
The Types of Insurance to Look For
Dispensaries require more than one type of insurance, but the exact policies that work best will depend on the type of business and products that you offer. In general, most dispensaries find the following policies to be the most helpful:
- General liability – All businesses, regardless of industry, should carry general liability insurance. This provides coverage for instances involving someone being injured on your property, property damage as a result of your business and other general protection .
- Product liability – For dispensaries, this type of coverage is invaluable. It shields companies from financial harm if a person claims that the products sold at that location caused bodily harm. Since your dispensary cannot control how people consume their marijuana or other products, this area can become very difficult to navigate without insurance.
- Crime insurance – Cannabis dispensaries are disproportionately more likely to experience criminal activity, such as theft. This is partially because people want to take the products that they sell, and partially because many dispensaries operate primarily with cash. Crime insurance can protect your business from theft and even internal fraud.
- Product recall insurance – If you do not grow your marijuana yourself but instead acquire it from an outside source, you could be responsible for expenses related to a product being recalled. This type of insurance compensates you for unsellable products in this situation.
- Crop & inventory insurance – Cannabis dispensaries rely heavily on a consistent flow of new stock, usually by growing the crop themselves. If an event negatively impacts your growing site (a fire, vandalism, etc.) such as destroying your crop, this type of insurance can compensate you for the loss in value. An added finished stock policy expands that coverage ensuring the value of your cannabis is protected even after it has been harvested but before it is posted for sale.
- Property insurance – If you are concerned about the physical dispensary, you can purchase property insurance to protect your building as well as some of its contents (including computers or hardware). The exact coverages will depend on the policy; working with your agent will help to include everything that is important to you.
Secure Dispensary Insurance from a West Coast Insurer
Dispensaries have more options than ever to secure proper business insurance coverage. However, it is important to work with an insurer who has experience in this new and expanding field. The experts at MFE Insurance have worked with west coast dispensaries to keep their businesses safe and protected. Reach out to learn more about the insurance we offer or to get started on coverage.