Depending on the type of cannabis business, there are unique coverages that you should acquire to ensure you are properly protected financially. Outlined below are the types of insurance coverages you may need based on your specific cannabis business type.
What Coverages You May Need For Your Cannabis Business
The cannabis industry encompasses many business types. Whether you grow, manufacture or cultivate, you will need to purchase cannabis insurance to mitigate risk and protect yourself from loss of inventory, theft, property damage and much more.
Dispensaries
Dispensaries often take on more risk than other cannabis business types since the point of sale is often held the most liable. Subsequently, it is crucial to have the necessary coverages to protect your dispensary. The primary coverages dispensaries require include:
- General liability
- Workers’ compensation
- Product liability
- Property insurance
- Employee theft
Your dispensary may require additional coverages based on your location and the specific details of your business operation.
Growers
A grower, or cultivator, has risks that are unique and different from those of dispensaries. Growers are the ultimate source of cannabis, and they incur many risks as a result. Common risks include equipment breakdown, loss of crop due to weather conditions or fire, theft, vandalism and more. The most notable insurance policies that growers should consider include:
- General liability
- Product liability
- Loss of crop coverage
- Workers’ compensation
Cannabis growers may also need property insurance. For those who also transport their crops, then they should consider commercial auto coverage as well.
Manufacturers
Any mistakes made during the manufacturing process can lead to significant costs that your company could be liable for without a reliable cannabis insurance policy. Insurance policies that manufacturers should have to protect their business include:
- General liability
- Product liability
- Equipment breakdown
- Workers’ compensation
- Property insurance
Product liability can protect your manufacturing business financially in the event that someone makes a claim that your product made them sick. Equipment breakdown or a worker getting injured without proper coverage could also lead to high out-of-pocket expenses without proper insurance coverage.
Property Owners
Property owners who rent their property to cannabis businesses may be taking on added risk. This includes the risk of property damage from fire or vandalism, but there are other risks to consider as well. In general, the most important coverages for property owners who rent to or operate a cannabis business include:
- General liability
- Loss of income insurance
- Commercial property coverage
Every property owner should assess their own risks, which may vary based on the state that they live in and the track record of the tenant.
Transportation
Businesses that rely conduct transportation of cannabis plants or products also have individualized risks. Specifically, the insurance coverages that transporters of cannabis may need include:
- General liability
- Product liability
- Workers’ compensation
- Commercial auto
- Employee theft
If an accident occurs while transporting cannabis plants or products, the employee’s personal insurance likely will not cover the damage or medical payments. Instead, your company is required to have its own commercial auto policy, along with additional cannabis-specific insurance coverages.
Hydroponic Shops
A hydroponic shop, along with other businesses that may work with cannabis companies but do not directly deal with cannabis, may also need to protect themselves with commercial insurance due to increased risk. A hydroponic shop may require:
- General liability
- Business income coverage
- Commercial property
- Product liability
Every hydroponic shop should assess their specific needs and consult with a cannabis insurance professional to determine which coverage options are most appropriate.
Medical Physicians
Physicians who provide cannabis for medicinal purposes are at risk of lawsuits that claim malpractice or negligence. To mitigate such risks, it is important for medical physicians to protect themselves with a reliable cannabis insurance policy. This ensures they are covered for any legal costs they may incur from lawsuits and settlements.
Laboratories
Laboratories often deal with testing cannabis products and carry many risks. Cannabis insurance coverages that they may need include:
- Workers’ compensation
- Equipment breakdown
- Product liability
- Property insurance
General liability coverage protects against any damage, theft or legal costs that they may face.
Start Your Cannabis Insurance Policy And Protect Your Business
To learn more about insurance for your cannabis business, call the experienced team at MFE Insurance today. We personalize your policy so you pay only for the coverages you need. Our team is happy to answer any questions you have and help you make an informed decision about what coverages you should choose to mitigate the risks of your business.