April 25, 2022
What is Cannabis Insurance and What does it cover?
If you own or run a dispensary, grow, extraction lab, CBD shop, head shop, smoke shop, gas station, distribution, retail facility, or open consumption lounge.
You may be wondering what kind of insurance do I need for my company if selling/housing cannabis or hemp-based products?
This is a great question to ask as a business owner. Insurance is an essential element of running ANY kind of business. Cannabis and or CBD Insurance is specified and specialty insurance is written in its own segment called non-admitted markets.
You cant easily obtain this by just calling any agent. There are Agents and Agencies that specialize in insuring the cannabis industry. There are many reasons this is pushed into non-admitted markets. Let’s dig into the types of insurance available and the first places to start.
And stay tuned for a blog to come on Non-Admitted Markets and Cannabis Insurance to come!
As for today, I am going to give you a brief rundown of what insurance is available and how to tell if you need it. If you have any further questions after you read this blog, please either call me, send me an email, or request a free quote!
Cannabis Insurance / CBD Hemp Insurance is the starting point for every company after licensing.
As we always say to be compliant, you must be licensed and insured.
General Liability Insurance
this is the first layer every field company should have General Liability Insurance. No matter what industry! This covers the following; Bodily injury per occurrence or aggregate loss over time, Damage to rented premises, medical payments, Personal and Advertising Injury, and Products and Completed Operations.
Products Liability Insurance
This goes hand in hand and is actually a limit or line of General Liability but can be written on its own basis as well. However, most carriers require the GL + products Ins together. As it’s a piece of; this is specific to the needs and set up of the company. We can help here!
If selling any product that goes to end-use consumers you will need this piece of insurance. The only way out of it is if you’re a vendor and do not change the label, but even then will still be found liable for selling the product to an end-use consumer. So you can’t just hope that the provider of the product is insured you must dig into this.
If you have your own brand or label/re-label you should have this in place for liability’s sake. (policy rated on gross revenue and auditable!!!)
Commercial Property Insurance
If you own a building just like homeowners insurance you are required to have building coverage for the building itself. most policy forms will exclude cannabis-related activity so make sure and be positive your commercial property insurance carrier or company is okay with that business type to cover the building and get in writing!
So many companies have coverage on a building they wouldn’t cover if they realized it was a cannabis-related risk. Policy forms Matter! Do not fly under the radar you will lose in the end, not the insurer.
Disclose everything. It doesn’t matter if you own the building your company operates out of, you can be a tenant and need the commercial property insurance too!
The contents of the building can also be insured so the following:
- Finished products
- Growing Plants, Harvested Plants (indoor only or hard top greenhouses that are not 2 ply plastic)
- Loss of income due to property loss (income is insurable Afterall!)
- Tenants’ improvements or betterments on the unit.
- Much more!
I always tell my clients to imagine cutting the roof off. Turn the building upside down and everything that shakes or can fall out is insurable! Even attached/bolted equipment!
Covers workers if they were to get hurt on the job it kicks in coverage so you don’t have to have legal altercations with employer/employee.
Most states require this for W2/Payroll employees.
Officers and Owners mostly reject this but can pick up coverage to protect them on the job as well too!
This is the most cost-friendly and easiest line of insurance to place!
This covers your spouse and children by giving a payout often 1MM, 500k, 250k, or chosen replacement amount of funds expected. If you were to pass away it allows your family to receive funds from your passing with the intent to allow them to live the same life they lived before you died.
The sum of all makes up what Cannabis insurance or CBD or hemp insurance really is. No different other than being in non-admitted markets that are more picky and limited, with ever-changing policy forms.
If you have any further questions after you read this blog, please either call me, send me an email, or request a free quote!
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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