Smaller cannabis growers are uniquely positioned to succeed by focusing their energy on quality over quantity. However, if you’re a small grower, your operation also comes with unique risks and challenges. If your crop is damaged or stolen, the financial hit can be harsh and potentially put you out of business. In order to stay in business long-term and continue growing high-quality cannabis, it’s important that small cannabis growers understand the risks they face and how to best protect themselves. Whether you’re just getting started or looking to scale up your operation, this article will give you an overview of what you need to know about insurance as a small cannabis grower.
What Is Insurance and Why Is It Important?
Cannabis growers have many unique risks that make insurance coverage an important tool for risk management. Without insurance, these losses could put small cannabis growers out of business. Insurance coverage can protect you if there’s an accident at your facility, a natural disaster damages your crops, or your harvest is stolen.
In addition, insurance can protect you if you’re sued. If a customer gets sick after using your product, they might sue your business for damages. If you have insurance, the insurance company will help defend you in court. Without insurance, you would have to pay for your legal defense out of your own pocket.
Even if you’re running a smaller indoor or outdoor cannabis grow, insurance is still an important factor to consider. Every cannabis grow operation is different and it’s important to understand your specific risks and how to best protect yourself against them.
Types of Coverage for Cannabis Growers
There are several types of insurance coverage that can be helpful for cannabis growers. When choosing an insurance policy, it’s important to understand what each type of coverage covers.
Property Insurance
Property insurance covers damage to your property, including your building and equipment. It can also cover liability if someone is injured on your property.
Liability Insurance
Liability insurance covers legal expenses and damages if you’re sued.
Health and Safety Insurance
Health and safety insurance covers damages from workplace accidents.
Crop Insurance
Crop insurance covers losses due to natural disasters.
Commercial Property Insurance
Commercial property insurance covers damage to your property from a natural disaster or other covered events.
Grower’s Insurance Basics
Grower’s insurance is crop insurance for cannabis growers. It covers losses due to natural disasters, such as an unexpected hailstorm, or damage that’s the result of a covered event, such as a fire in your grow room.
When selecting a grower’s insurance policy, it’s important to find an insurance company that is knowledgeable and experienced in insuring cannabis growers. Make sure the company understands your grow setup and the unique challenges you face as a cannabis grower.
Grower’s insurance policies fall into two categories: Actual cash value (ACV) and replacement cost. ACV policies pay you the current value of your property. Replacement cost policies pay you enough money to replace the damaged or stolen property with brand new items.
What Does Grower’s Insurance Cover?
Grower’s insurance includes several types of policies that can help small growers survive major problems. These plans include:
ACV Policies
Actual cash value policies are the least expensive policies. In exchange for the lower premium, you’ll receive lower coverage.
Replacement Cost Policies
Replacement cost policies are more expensive than ACV policies. They offer higher coverage than ACV policies and pay you enough money to replace the damaged or stolen property with brand new items.
Liability Coverage
Liability coverage helps protect you in the event that someone is injured on your property. It can also cover legal expenses related to a lawsuit.
Crop Insurance
Crop insurance covers crop losses due to natural disasters and damage that’s the result of a covered event.
Loss or Damage to Your Crops
If your crops are damaged, you’ll be eligible for a loss payment. Loss payments are based on the average price of the harvest in your region. If your harvest is completely destroyed, you may be eligible for a settlement. Settlements are based on the cost of growing a new crop and the projected revenue.
Theft of Your Harvest
If your harvest is stolen, your insurance company will investigate the incident and pay you the amount you’re entitled to. Your insurance company will also work with law enforcement to recover the stolen harvest. If you’re growing indoors, it’s important to secure your harvest properly. Follow these tips for protecting your indoor harvest from theft.
Property Loss or Damage From a Grow Room Fire or Electrical Failure
If a fire damages your property or an electrical failure causes damage, your insurance company will investigate the incident and pay you the amount you’re entitled to. Your insurance company will also work with law enforcement to determine the cause of the fire or electrical failure. If you’re growing indoors, it’s important to make sure your electrical system is safe and up to code. Follow these tips for protecting your indoor grow from electrical failures.
How to Protect Your Small Cannabis Grow Op
As a cannabis grower, it’s important to be familiar with the risks you face and find the best ways to protect your operation. Here are a few best practices to keep in mind.
Choose the Right Insurance Company
When choosing an insurance company, it’s important to find one that is knowledgeable and experienced in insuring cannabis growers. Make sure the company understands your grow setup and the unique challenges you face as a cannabis grower.
Know What’s Covered by Your Insurance Policy
Before a loss occurs, make sure you understand what is covered by your insurance policy and how to file a claim. Don’t wait until a loss to find out how your insurance works.
Manage Your Risk
No matter how well you protect your operation, things can and will go wrong from time to time. When they do, it’s important to have an insurance policy in place that can protect you.
Call to Get a Quote for Small Cannabis Grower’s Insurance
As a cannabis grower, your risk is high and the stakes are high. Whether you’re starting out as a small grower or are looking to scale up your operation, insurance is an important factor to consider. Choosing the right insurance company and policy is important. Make sure you understand what is covered by your insurance policy and how to file a claim. Follow these best practices to protect your operation from risk and keep growing high-quality cannabis.
Millers Insurance Group provides insurance options to companies in a variety of industries, including cannabis-related businesses. Please reach out to us or fill out our online form to get an insurance quote today for your small cannabis growing company’s coverage.
