Just like any business owner, you want to protect what you have worked so hard to build. Insuring your cannabis operation is one of the best things you can do to keep your risks low in a high-risk market. Whether you are a grower, dispensary, or involved in the cannabis business in some other way, you need comprehensive coverage to protect your business against costly lawsuits. Learn more about the importance ofcannabis insurance, the different types available, especially product liability insurance, and the best policy to obtain.
Types of Cannabis Insurance Policies
The most basic type of cannabis insurance is known as general liability. With a general liability policy, you can protect your business against lawsuits pertaining to third-party bodily injury or property damage. In short, general liability can help protect you against claims that may occur as a result of normal business operations. In addition to covering costs associated with physical injury and property damage, general liability policies may also cover defense costs and personal and advertising injury. The cost of general liability insurance is generally based on a business’ specific needs and level of risk.
As a business in the cannabis industry, you may also need property insurance. This fundamental coverage protects against loss from theft, fire, or vandalism. It is also designed to protect your investment in buildings, personal property, inventory, manufacturing equipment, crops, and finished stock. If you own the building that you are using for your business or have costly equipment, supplies, or products, then having the proper coverage is essential. When deciding whether or not property insurance is right for you, ask yourself a simple question. Could you afford to replace everything tomorrow if your business was completely lost to theft or a fire? If you answered no, you need property insurance.
If you have indoor or greenhouse grows, crop coverage is available. This type of cannabis insurance policy protects against the physical perils of theft, fire, wind, or hail. To be deemed eligible for coverage, the losses must be caused by things that are unavoidable or beyond the control of the insured, such as freeze, drought, or disease. Another type of cannabis insurance policy is workers compensation. With workers compensation insurance, injured workers receive medical care and compensation for a portion of the income they have lost while they are unable to work.
Importance of Product Liability Insurance
One of the most important types of cannabis insurance is product liability insurance. If you provide any type of product to your customers, it is essential that you protect your business against claims of injury or damage that may arise from that product. By having product liability insurance for your business, you can help ensure that you are not stuck paying costly legal fees or court costs if your business is sued. Product liability insurance is recommended for any business that supplies products, including cannabis growers and dispensaries.
Consumers can be harmed by the way a product is designed, manufactured, marketed, or misused. Although you may have created a high-quality product, if a consumer uses the product incorrectly you could still be liable for any injuries or damages that occur. As the business who supplied the product, you are responsible for making things right. If you ever face this type of situation, product liability insurance will typically cover all legal and court fees. As well as, any medical costs, business damages, or compensation that must be paid.. How much product liability insurance you need will ultimately depend on your volume of sales and the number of parties involved in your business.
While product liability insurance provides ample coverage for all of those unexpected incidents, there are a few things it does not cover. First, it usually does not cover scenarios in which a business did not use proper quality control measures. It may also not cover lawsuits caused by unreported changes. If you make any manufacturing changes, such as using new ingredients or materials, you must legally report these changes. Another scenario that is not usually covered by product liability insurance is the use of certain ingredients or materials. Selling a product that contains a forbidden ingredient or material could result in coverage denial.
Contact a Cannabis Insurance Broker
The cannabis industry is growing at a rapid pace and many businesses are trying to keep up with the demand. However, as you create and sell more products you put yourself at a higher risk for loss and lawsuits. Fortunately, there are a number of types of cannabis insurance available to safeguard your business against these serious risks, including product liability insurance. To learn more about the different types of cannabis insurance available or to learn how to acquire product liability insurance, contact a professional cannabis insurance broker today.