What Insurance Coverage is Available for Cannabis Dispensaries?

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In the early days of legal cannabis, many insurance companies were reluctant to provide coverage for businesses selling or distributing cannabis. Even today, some insurers remain hesitant to offer policies to cannabis dispensaries and other businesses related to the industry.

However, as more states legalize cannabis for medical or recreational use, insurance providers are beginning to see the market in a new light. More and more insurers now recognize the potential of this growing market as well as its inherent risks. As a result, we’ve seen an expansion of policy options that can adequately protect businesses operating in the cannabis industry. In this blog post, learn about some of the insurance coverage options available for cannabis dispensaries.

General Liability Insurance

General liability insurance is a type of commercial insurance that covers a business against liability related to accidents that happen on the business’s premises or during its operations. General liability insurance provides coverage for claims arising from bodily injury, property damage, and other losses that may be caused by a business’s employees. Businesses involved in the cannabis industry should consider purchasing a general liability policy.

This type of policy can help protect cannabis dispensaries from any potential claims that may arise from injury or property damage occurring on the dispensary’s premises, such as a customer falling on the stairs at the dispensary and injuring themselves. The injured customer may file a claim against the dispensary for medical expenses and pain and suffering. A general liability policy would protect the dispensary against those claims.

Product Liability Insurance

Product liability insurance is a type of commercial insurance that covers the costs of various claims filed against a business related to the sale of defective or faulty products. This type of insurance is necessary for businesses selling products, especially those that are considered high-risk, such as cannabis dispensaries. If a cannabis dispensary sells a faulty or contaminated product, it could be held liable for any injuries or damages caused by that product. Product liability insurance helps protect a business against these types of claims.

Business Owners (BOP) Insurance

Business owners insurance (BOP) is a commercial insurance policy that covers all of the business owner’s assets such as the building and its furnishings, equipment, and inventory. In the event of a natural disaster or other types of covered events, BOP insurance will pay to repair or replace the business owner’s assets. A cannabis growing operation or dispensary is a business that requires significant investment. Business owners insurance (BOP) helps protect cannabis business owners from financial loss resulting from natural disasters, theft, or vandalism. BOP insurance can help cover the costs of rebuilding a business in the event of a catastrophe.

Cyber Liability Insurance

Cyber liability insurance is a commercial insurance policy that protects businesses from financial loss resulting from cybercrime. More and more industries are being targeted by cyber criminals. The cannabis industry is particularly susceptible given the large amount of sensitive information and transactions that take place on a daily basis. Most cannabis dispensaries use critical computer systems for inventory management, marketing, and financial activities. A cyber attack (such as a ransomware attack) that shuts down or damages these systems could significantly disrupt the daily operations of the dispensary.

Business interruption Insurance

Business interruption insurance is a type of commercial insurance that covers the loss of revenue that results from a covered interruption in operations. Business interruption insurance can help cannabis dispensaries recover some of the lost revenue resulting from unexpected events that interrupt their operations such as a natural disaster or a power outage. Business interruption insurance would provide coverage to a cannabis dispensary in the event that a natural disaster such as a flood or earthquake caused significant damage to the business’s premises, interrupting operations.

Commercial Property Insurance

Commercial property insurance is a type of commercial insurance that covers damage or loss to a business’s property. This type of insurance is essential for any company that owns property, including cannabis growers. Commercial property insurance helps protect cannabis cultivation sites from financial loss resulting from physical damage to the dispensary’s property.

Workers Compensation Insurance

Workers compensation insurance is a type of insurance that helps cover the medical costs and other losses associated with injuries that occur in the workplace. This type of insurance is mandatory in every state except for a few that have specific exceptions for certain types of activities. In most cases, a cannabis business would be required to have workers compensation insurance.

Product Recall Insurance

Product recall insurance is a type of commercial insurance that covers the costs associated with a product recall. A product recall can occur when a company withdraws a product from the market due to safety concerns. While some recalls are voluntary, others are initiated by government agencies such as the U.S. Food and Drug Administration.

Crop Insurance

Crop insurance is a type of commercial insurance that helps protect against loss related to natural disasters or other covered events. Crop insurance is an important policy for any business involved in agriculture. Cannabis growers need crop insurance or they run the risk of suffering significant financial losses if the crop fails due to a natural disaster or some other event. For example, if a cannabis grower’s crops are damaged by a storm, the crop insurance policy would help cover the costs of replacing the lost inventory.

Call to Get a Quote for Cannabis Insurance

As the cannabis industry continues to grow, insurance providers will continue to offer more coverage options for cannabis businesses. In the early days of legal cannabis, many insurance companies were reluctant to provide coverage for businesses selling or distributing cannabis. As more states legalize cannabis for medical or recreational use, insurance providers are beginning to see the market in a new light. More and more insurers now recognize the potential of this growing market as well as its inherent risks. As a result, we’ve seen an expansion of policy options that can adequately protect businesses operating in the cannabis industry.

Millers Insurance Group provides quality business insurance to the cannabis industry. Please reach out to us or fill out our online form to get an insurance quote today.

 

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