It’s a well-known fact that having basic liability coverage is not enough for cannabis businesses that are cultivating, selling and distributing their products. Standard general liability, property, and renter’s insurance policies do not include critical coverages needed to protect a cannabis operation. The reason they call them “gaps” in coverage is because they leave you wide-open to commonly occurring accidents that normal policies are not intended to cover.
With the still emerging cannabis industry’s exponential growth, many cannabis operations assume that they are fully insured by purchasing traditional property policies. Unfortunately, that is not the case, and businesses often learn the hard way when they file a claim only to realize the coverage, they thought they had was never there to begin with.
Here are some common exclusions that you might want to consider when purchasing your cannabis business insurance coverage:
This is a big problem. There are policies that exclude “products-completed operations hazard” and due to the broad definition of the word “hazard”, all injury claims that arise from the insured’s products are more likely to be excluded.
Here are some common cannabis insurance exclusions that are related to product liability:
It is important to review coverage options with insurance experts before making the decision to hire a driver to transport cannabis. It is good to have your drivers trained how to handle accidents on the scene which includes informing law enforcement of the cannabis cargo.
An important reminder: transporting cannabis across state lines is illegal according to federal law. Even when legal on both states.
There will be revenue loss if equipment fails due to mechanical or electric breakdowns due to power surges, malfunctions, and user error. Having the right equipment breakdown insurance will help you get back to full operation in lesser time and at minimal costs.
Cannabis crops require specific insurance coverage for different stages of growth (see: Growers Insurance). There is also some coverage for hazards such as fire and theft. Get your information from the insurance pros at Cover Cannabis to review your property policy and any potential exclusions related to cannabis operations.
As the cannabis industry continues its explosive growth, it is guaranteed that more insurance options will become available.
With that said, the path to a successful cannabis business is full of challenges. It is filled with confusing laws and regulations and there will be other unforeseen challenges coming. Cover Cannabis has the premier cannabis insurance expertise and you can count on top advice for insurance coverage to protect your business. Our tips and information will give you a better understanding how to tackle these challenges and will allow you to be more prepared for your exciting cannabis entrepreneurial journey ahead. Contact us now.