January 14, 2022
Do I need insurance for my CBD Edible Products?
Insurance for your CBD edibles and products is more needed than ever right now. Many people may find themselves taking and consuming cannabis-derived products these days. These are mainly smoke-able and edible products such as joints, flower, vape pens, edibles such as chocolate bars, drinks, gummies.
The stigma of people using cannabis being “potheads” or less-than has faded away in current times. The cannabis and hemp industries are pushing serious figures these days and being taken seriously. Federal legalization is so close we can taste it! You can already find these products in all 50 states in the US.
The Hemp and CBD industries have been able to ride the .3% THC rule.
And get 10-15MG of delta 9 THC in a gummy or piece of chocolate and stay under.3% THC.
Which evens the playing field for people in states with no access to REC or MED systems. These remaining states had to figure it out one way or another. So for them, it’s black market THC or, CBD hemp-derived full-spectrum THC; or CBD converted THC isomers such as Delta 8 THC, HHC Etc. Just about every approach has been taken possible.
A lot of people are at the mercy of trusting their supply chains, vendors, retail shops, labs, etc for a pure and clean product. Free of heavy metals, pesticides, mycotoxins, etc.
This brings up a valid question; what would happen if taking a product causes a loss to you or someone else?
Are your CBD edibles or products covered by your insurance?
In this case, we would hope the company that is producing and selling products carries insurance.
Like any other credible business, Cannabis companies must be licensed, AND Insured! Many overlook the need for insurance for edible and consumable products. Let’s focus on edible products. Why do companies need to insure their edibles? This is no differently approached for smokeable; FYI!
Well, if a consumer had an adverse reaction or a loss was caused by the product a gummy, a piece of chocolate, etc., the company selling and supply chain that got it to the consumer are in direct risk of a liability claim or lawsuit.
We mainly see this with Vape claims or people “overdosing” on edibles which is very common. Overdosing doesn’t mean you die in these cases, keep in mind. People do end up in the hospital and seek medical compensation and blame the company providing the product.
If a company or product does not carry insurance; the company and consumer are forced to defend themselves. If you have to do this without any protection and all of those costs come out of pocket.
To prevent this and protect yourself and your company, as well as the consumer, you should purchase insurance for your CBD edibles and products.
This is known as “Products Liability” a limit of your “General Liability”. Most people don’t understand those are the same line of insurance and go hand in hand. Two peas in a pod. This usually starts at the standard 1M/2M limits which means 1,000,000 per occurrence loss or kicks in – to 2,000,000 per aggregate loss (losses over time) where you will get a 2,000,000 Products and Completed Op’s limit where this applies and kicks in.
What if a product makes someone sick and seeks action?
This is triggerable on the products liability insurance.
What if someone has a bad reaction and sues?
Also covered by products liability insurance!
What if your product gets stolen or destroyed, etc.?
This would actually be covered under a Commercial Property Insurance policy. Which covers inventory, equipment, growing plants, the building, etc.
This is a different line of insurance separate from that of products liability. Even though it still applies to the product, edible or smokeable. This would apply to theft, fire, or losing the product for an unforeseeable reason or “trigger” which means it can be claimed on a policy.
The main curve balls or caveats in understanding commercial property insurance for edibles and cannabis products, seen as inventory, are the requirements for the “Protective SafeGuards”. Which are the security and active measures set in place by a company to prevent a loss that can occur.
This is required for ANY true coverage to apply to the property; which can be the building, inventory, equipment, etc.
*Carriers must validate Central Station Alarm, exterior and interior cameras, locked safes, etc. for coverage payout to apply. IF these are not active and in place, the insurance company will not pay out as they can’t prove the loss was unforeseeable; ex; could be an inside job/insurance fraud approach, preventable.
If you have ANY property or sales of any cannabis-related product, it would be wise to consider getting insurance before it’s too late and loss occurs. The insurance must be in place on a time of claim and mostly on a “Claims made basis” which means active coverage was in place when the claim was made in order for insurance to be triggered and utilized.
If you are considering selling cannabis or CBD products as a grower, lab/Manufacturer, retail rec or med dispensary, vendor, storefront, individual; it would be wise to protect yourself and your consumer by simply purchasing insurance.
It’s the best piece of mind you can have operating a business. Let us help at Cannabis Insurance Business. We are one of you, and our focus is on the Cannabis industry. This is what we do, so you can keep doing what you do!
Ready to learn more about insuring your cannabis & hemp products? Then contact us at (720) 999-3345 or at info@CannabisInsuranceBusiness.com. You can also learn more about CIB at https://cannabisinsurancebusiness.com/about
Colorado-based and pushing the industry further one step and state at a time. Proudly serving all 50 states.
Pushing the industry further one step and state at a time. Proudly serving all 50 states. – Cannabis Insurance Business of Loveland Colorado
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