Frequently Asked Questions: Marijuana Insurance
What is Marijuana Insurance
Insurance is a critical component of any business endeavor, including those associated with the cannabis industry. As a business owner, you should obtain coverage that will safeguard your assets from the financial ramifications of loss. Our marijuana insurance program was designed specifically for the cannabis industry, with offerings relevant to the risks presented.
What types of coverages are available for a cannibus business?
A wide-range of coverage offerings are accessible to businesses involved with the marijuana industry. The general product offerings we administer encompass: general liability, product liability, commercial property, commercial liability, workers compensation, crop insurance, and commercial auto insurance, as well as insurance for the owners of the property (if not the cannabis tenant) AKA LRO’s. Our agents work one-on-one with business owners to learn the intricacies of their business operations. Additional coverage opportunities are accessible depending on business requirements.
Can you cover my employees if they are injured on the job?
Yes. We administer a comprehensive workers compensation program, which is accessible to businesses involved with the cannabis industry. We have access to an exclusive program built specifically for the cannabis business owners; keeping in mind cannabis business usually operate on a cash only bases due to federal regulations and banking.
Do I need to invest in commercial auto insurance if my employees are using their own vehicles for deliveries?
Insurance companies deliberately ask on the application if a vehicle is used for any business use. If this question is answered incorrectly, the instance could be deemed a misrepresentation and the insurance company may deny coverage. We recommend that employers invest in a commercial auto policy that will account for marijuana deliveries. That being said, the policy must be written in the name matching the ownership of the vehicle. As a delivery only business, you have a few options. First off, you would purchase your own fleet of vehicles, insured properly under a business commercial auto policy for cannabis delivery. You would then have your “employees” listed as drivers on the policy. The second option, is to allow your drivers to use their own vehicles. However, to protect your business; you should require that these drivers insure their vehicle properly for delivery/commercial coverage and have your business name added as additional insured. This is the only way to ensure you as the business owner is protected, same idea applies if the individual was working for a pizza delivery, his insurance needs to be written to show he/she uses their personal vehicle in the course of delivery operations.
Since cannabis is still federally illegal, does the insurance companies you use offer “true” coverage?
There are several carriers who claim to cover cannabis, however, most of the policy forms will show an exclusion related to cannabis/marijuana. This is why it is so important to work with a broker that truly understands each carrier and can give you all options as well as explain all exclusions. We have access to all markets currently writing cannabis/marijuana/CBD/Hemp insurance. We are also experienced and can explain the difference of each carrier. Usually the “cheap” policy, is the one with all of the
Why is Product Liability coverage important?
Product liability, in my opinion is one of the most important coverage you need as a business owner in the cannabis industry. For a standard (non-cannabis) type of a business, the General Liability policy will include a sub-limit for Product Liability built in, however, with the cannabis carriers, Product Liability is excluded. Product liability is the coverage you need to protect yourself if someone says they got sick on your product. Not as important in regards to flower only, as long as you are not using harmful pesticides. However, for the edibles, topical, extracts/concentrates, this is where you are going to see claims. So as a manufacturer, you need the coverage to protect you since it’s your product and your label. If you are on the retail side, you need to ensure you get a certificate from each vendor showing they carry their own product liability, and then you would carry your retail product liability to cover you in case of a lawsuit since you are the point of sale.
Can I get crop coverage for my grow?
Yes, there is currently a very select few carriers that will offer crop coverage on your indoor/greenhouse crop. You can get coverage for your grow equipment and tools, as well as coverage for your crop in each stage from seed/clone, to vegetative, flowering and harvested. There is currently no coverage available for outdoor crops, however, you can still get coverage for your outdoor grow equipment in tools as long as they are secured indoors.
What property coverage’s are currently available?
You can get property coverage for the following: Building (owner or triple net lease), Stock and inventory (ie; flower, edibles, concentrates, drinks etc), Business Personal Property (jars, scales, display cases, furniture, POS Systems, non-cannabis products), Tenant Improvements (this is the coverage for material cost associated with any construction you had to do at the location in order to get your business up and running). Carrier restrictions apply in regards to required security requirements. (ie; central station burglar and fire, interior/exterior cameras, safe/vault, etc.) Give me a call, I am happy to discuss all options available.