What is Outdoor Crop Coverage?


Outdoor crop coverage insurance protects cannabis businesses from losses due to natural disasters. It’s a type of property insurance that covers the cost of replacing damaged crops, as well as expenses related to alternate revenue sources while the farm is unable to produce. The scope of coverage varies by policy and insurer, but most outdoor crop policies will have similar elements.

Cannabis businesses should take the time to understand the different types of insurance available to them. Other types of agricultural businesses benefit from federal government subsidies that are not available to cannabis growers. Here is more about outdoor crop coverage insurance for the cannabis industry and what you need to know.

What Is Crop Insurance?

Crop insurance is a type of insurance policy that protects the policyholder from financial loss due to crop failure. The policyholder pays a premium to the insurance company, and the company makes payments to the policyholder if the specified crops fail to produce as expected.

There are different types of crop insurance policies, including:

  • Stand-alone policies that provide coverage for a specific crop, crop type, or location
  • Endorsements to broad-based policies that extend coverage to additional crops and/or locations
  • Period policies that provide coverage for a single harvest (e.g., one growing season)

The type of crop insurance you need depends on the type of crops you’re growing. Crop insurance policies are designed to protect growers from the financial risk of unexpected challenges, such as weather-related damage, disease, and pests.

Why is Crop Insurance Important for the Cannabis Industry?

Agricultural operations that produce high-value crops are particularly vulnerable to unexpected challenges. Natural disasters and pests can cause significant losses that can easily result in total crop failure. For example, a frost or freeze can completely destroy an entire field of crops in one day. A freeze caused by a lack of appropriate weather control can destroy a cannabis grower’s ability to generate revenue for weeks or even months at a time.

Crop insurance covers the costs of replacing damaged crops and the costs associated with generating alternate revenue sources until the crops are mature enough to harvest. Crop insurance reduces the financial risk associated with growing high-value crops. It can be the difference between a profitable and unprofitable growing season.

Things to Consider When Purchasing Outdoor Crop Insurance

Before purchasing crop insurance, cannabis growers should do their research and find out what types of policies are available to them. They should understand the types of risks associated with their operation and choose policies that appropriately address those risks. Crop insurance isn’t right for everyone. It’s essential to understand the risks associated with a cannabis operation and the coverage provided by available policies before making a decision.

3 Tips to Make Sure You’re Getting the Best Deal on Crop Insurance

Crop insurance is a long-term investment. It’s important to choose the right policy for your operation. Here are three tips to make sure you’re getting the best deal on crop insurance:

Consult With An Insurance Agent

An insurance agent can help you determine the types of policies available to you and assist you with the policy selection process.

Ask About Discounts

Most insurance companies offer discounts for things like previous claims-free years, maintaining certain levels of coverage, and utilizing best management practices.

Understand Your Policy

Make sure you understand what is and isn’t covered under your policy. You don’t want to find out only later that something isn’t covered when you need it.

How is Crop Coverage Different from Other Types of Insurance?

Crop coverage differs from other types of insurance in a few key ways:

  • It is purchased before the risk occurs. Farmers buy crop insurance before they plant their crops to help offset the cost of a potential loss.
  • It may be subsidized by the federal government. The government provides subsidies for growers who take out policies on their crops.
  • It covers more than just a single risk. Crop coverage protects farmers from several risks, such as weather damage, pests, and disease.

When Does a Cannabis Grower Need Outdoor Crop Insurance?

Cannabis growers should consider purchasing crop insurance when the value of their crops exceeds the amount of money they have available to cover losses. It’s important to evaluate the risk of your operation and choose an appropriate level of coverage based on that risk assessment. Crop insurance isn’t meant to protect growers from poor management decisions, such as planting in a region that is prone to significant losses, failing to protect crops from pests, or failing to plant crops in a timely manner.

How Much Does Outdoor Crop Insurance Cost?

There are no fixed rates for crop insurance policies. Rates vary significantly based on multiple factors, such as the type of operation, extent of coverage, and amount of risk associated with the operation. Insurance companies use formulas to determine the appropriate premium for each operation. Crop insurance premiums are calculated based on the expected amount of claims paid out and the expected amount of premiums collected.

Call to Get a Quote for Outdoor Crop Coverage

The cannabis industry faces unique challenges. It may be difficult for some growers to obtain crop insurance due to the nature of their business. Outdoor crop coverage insurance protects cannabis businesses from losses due to natural disasters. It can cover the cost of replacing damaged crops, as well as expenses related to alternate revenue sources while the farm is unable to produce under specific circumstances.

All growers need to understand the different types of insurance available to them. Crop insurance can be a valuable asset for cannabis operations. It is important for growers to choose the right policy and make sure they are getting a good deal on their premiums.

Millers Insurance Group is proud to be one of the few companies that provide outdoor crop coverage to cannabis-related businesses. Please reach out to us or fill out our online form to get an insurance quote today for your company’s outdoor crops.

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