3 Reasons Why You Need Cannabis Insurance
The cannabis industry is booming now more than ever as more states across the United States legalize cannabis use for medical and recreational use. At the time of this writing, 18 states have legalized recreational marijuana use. Therefore, a wide array of businesses have risen to meet the high demands of this new, lucrative industry. However, with any new commercial industry comes a new set of risks, challenges, and regulations to prepare for.
In addition, many conventional commercial insurance companies either don't have the coverage options or simply will not cover cannabis-related businesses. As a result, finding the right coverage to protect these companies can be difficult. However, there is a solution. Cannabis insurance provides comprehensive coverage designed to meet the unique needs of the cannabis industry and its many entrepreneurs, small businesses, and large cannabis corporations. This article will explain three of the top reasons you need cannabis insurance for your cannabis-related business.
Marijuana dispensaries need the right product liability coverage.
Having comprehensive coverage to help you navigate the ever-changing legal climate, regulations, and general risks is the key to managing a successful dispensary. In addition to the typical general liability insurance and workers' compensation needs of any commercial business, dispensaries need to protect their businesses from loss. For example, the right product liability coverage is crucial as it protects your company from liability should a product result in harm, illness, or unwanted side effects.
Without this coverage, your dispensary may be held liable by the consumer. Unfortunately, many conventional insurance companies don't offer product liability for cannabis products, such as cannabidiol (CBD) products, marijuana buds, and tetrahydrocannabinol (THC) products. Therefore, it's vital to pair with an insurance company that will offer this specialized insurance coverage.
Cannabis cultivators need to protect their investments.
The cannabis cultivation industry faces its own potential risks and perils that require protection, such as fires, equipment breakdowns, theft, vandalism, and more. Marijuana and hemp cultivation requires a massive investment in infrastructure. This investment includes specialized equipment, lighting, cannabis seeds, security, and the crop itself, which are all vulnerable to potential losses.
With this significant investment, as a cannabis cultivator, you need to protect your business to ensure you can keep operating if an emergency occurs. Crop and property insurance are two of the most vital insurance solutions cannabis insurance can provide. As a result, cannabis cultivators can have peace of mind knowing their investments are protected from covered perils.
Landlords need insurance coverage when renting to cannabis-related businesses.
Landlords working in the cannabis industry deal with unique challenges that many others in the real estate industry don't. Many conventional insurance companies refuse to cover claims from owners renting to cannabis-related businesses, especially when it's not discussed upfront. As a result, landlords with tenants running a cannabis-related business, such as a dispensary or vape shop should consider cannabis insurance to mitigate these challenges.
There are various coverage options when it comes to cannabis insurance.
Many cannabis-related businesses are unsure of the coverage options available with this kind of insurance. However, cannabis insurance provides a wide array of insurance coverage to cover most claims. For many companies, these coverages can be available in packages or individual policies customized to fit a specific company's needs based on their state or federal cannabis mandates. Below, you can see an example of some of the most common coverages available with cannabis insurance.
- All risk property coverage
- Crime insurance
- Cyber liability
- Business interruption
- Errors and Omissions employee practice compensation
- Equipment breakdown
- Operations liability
- Product recall
- Professional liability
- Workers' compensation
- Stock and inventory coverage
Many more options are available, depending on your company's individual needs. However, the best way to find out what you need to be covered is to get in touch with a cannabis insurance provider.