Cannabis Transportation Insurance

Cannabis transportation is highly regulated and failure to adhere to these transportation laws can have big repercussions for cannabis businesses.

If you are using your vehicle for work, regardless of your operation, you need a business auto insurance policy, especially when transporting cannabis. This coverage can ensure that in the event of an accident while working, your policy can provide coverage for liability, physical damage and injuries.

Cannabis Transportation Insurance is a specific type of insurance that provides coverage for businesses involved in the transportation of cannabis products². This insurance is crucial because these businesses face unique risks, including the potential for theft during transport, which can result in significant financial losses.

Here are some key points to understand about Cannabis Transportation Insurance:

1. Why is it needed? Like most businesses, cannabis transport companies need insurance to protect them from financial, legal, and reputational risks. The valuable products and cash transported by these businesses make them a potential target for theft, putting both the business’s assets and employees’ safety at risk¹.
2. What does it cover? Cannabis Transportation Insurance can cover a variety of risks. Some common types of coverage include General Liability Insurance (covering basic risks like customer injuries, property damage, and lawsuits), Product Liability Insurance (protection if someone gets sick or injured from your products), and Property Insurance (covering your building, crop, inventory, and equipment in case of fire, theft, or other disasters)³.
3. State-specific requirements: The specific insurance requirements for cannabis businesses can vary by state⁴. For example, some states require certain types of cannabis operations to have general liability coverage up to specified limits. It’s important to consult with an insurance professional or your state’s Department of Insurance and cannabis regulatory body to understand the specific requirements for your business.
4. Challenges: The cannabis industry faces several challenges when it comes to insurance. For one, the federal illegality of cannabis creates a complex legal landscape that can make it difficult for insurers to assess and price the risk². Additionally, the lack of historical data on cannabis transportation makes it challenging for insurers to develop appropriate coverage solutions.
5. State-specific examples: Cannabis Transportation Insurance is available in several states, including AZ, CA, CO, GA, IL, ME, MI, NH, NM, NV, OK, OR, VT & WA⁵. Other states that permit medical cannabis delivery as part of another license type or with a specific delivery license include: Arizona, Arkansas, California, Colorado, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New York, Oregon, Rhode Island, and Vermont.

It is true that cannabis as a product can be covered through other policies, like cultivators and property insurance, but once the product is in transit, these coverages can become invalid. Cannabis businesses owners will need additional cargo coverage in order to be protected if a robbery was to occur during transport.

It is important for cannabis business owners to keep in mind that a regular business auto policy may not cover you and the items you are transporting unless you disclose that you are transporting cannabis, or work with a cannabis operation. In which case, certain insurance companies may decide to decline coverage. We advise working with an insurance company that has experience in the cannabis industry, who can properly guide you and lead you to coverage specific for cannabis operations.

A business auto policy can offer the following benefits:

• Coverage in the event of an at fault accident. Covering injuries and damages for third parties.
• Comprehensive and collision coverage. Covering any damages to your work vehicle, regardless of fault.
• Coverage in the event you are hit by a third party without insurance.

Cover Cannabis can help guide you and provide an array of available coverages to fit your cannabis operation. Remember that a personal auto policy will exclude any business use. You need a business auto policy that is designed to cover your work vehicle, your employees and the items you transport. Additionally, you need to work with a company that has expertise in the cannabis industry, in order to guarantee you will be covered in the event the worst happens.

Call us today and get a free business auto insurance quote for your cannabis business.