Cannabis or Hemp Insurance — What’s the difference?
The cannabis industry is only going to continue to grow. As we’ve seen in the past election, more and more states are making cannabis legal. The industry’s regulatory changes continue to evolve and it will become more difficult for businesses to avoid risk exposure.
As you learn to navigate the risk exposure aligned with the cannabis industry, it’s important that you have a risk management plan in place. This risk management plan would mean understanding the industry’s unique needs as a whole and understanding the specific needs of your specific company.
To get you started, here are a few coverage options that will start your risk mitigation process.
Cannabis & Hemp Product Liability
Cannabis and CBD products require a custom product liability policy for their manufacturers, retailers, distributors, cultivation, facilities, and more! This coverage applies to any business working to bring a product to market. It helps to defend your company against claims and allegations and to pay damages if your business is found liable if an incident were to occur.
These claims can vary, but some of the most common in the cannabis industry include:
- Bodily injury or property damage caused by a product misuse
- Product-related/manufacturing defects that result in some kind of loss
- Inhaled, edible, and infused products that may have caused illness.
- Faulty/misused equipment (which includes vape cartridges, batteries, and lighters)
- Marketing/Labelling misrepresentations
Product Liability insurance is essential to your cannabis coverage. Similarly, you may want to consider product recall insurance that would cover the costs of removing a defective product and prevent third-party claims.
Workers compensation coverage is essential to any business. As you hire employees, there is the added risk of potential injury on the job. In the cannabis industry, this risk can be heightened. At Competitive Edge we offer final audits, claims, inspections, and loss control to all of our clients who utilize our workers compensation coverage.
General Liability Insurance
General liability insurance provides coverage for various different types of claims. A few of these claims might include:
- Personal injury
- Bodily injury
- Property Damage
Cannabis Crop Insurance
WIthin the cannabis industry, you may need coverage for your cannabis crop. This coverage ensures your crop remains protected during every step of the growth and harvesting process.
Our in-house bond department has over 25 years of experience in handling various types of bonds. No bond is too small or large for us to handle.
Your commercial auto insurance covers both comprehensive and collision. Meaning your work vehicle is covered regardless of fault. Personal auto insurance just won’t cut it.
In the cannabis industry, relying on personal auto insurance to cover the cargo within your vehicle can be costly. If your cannabis shipment is lost or damaged in an accident commercial auto insurance will cover it.
It’s also important to note that courier services that ship your product may leave you exposed to additional costs. Couriers only cover cargo on-board to a maximum dollar limit and that dollar amount is shared by all cargo owners, therefore your portion of the payout may be far less than the value of your loss.
Equipment Breakdown Insurance
In the event that you experience a loss of business income due to equipment breaking, equipment breakdown insurance covers the cost. This coverage also ensures you are protected if you experience a data compromise, property damage, or if you need reputational recovery.
Cyber jackers are specifically interested in the cannabis industry due to the large amount of personally identifiable and protected health information they collect, and the limited cyber security protocols in place.
As a cannabis grower, you should limit the amount of people who have access to your research and development process. You should also ensure your proprietary information is only in the hands of those who need it.
Some people use their own servers to store their information, as the risk of a breach is too high.
While cannabis businesses are difficult to insure, and this may continue as long as cannabis remains illegal at the federal level, there are still a few options you begin to implement to protect your business.
Enlist in a trusted expert who has experience insuring this high risk industry. Contact Brenda Jo and her team at Competitive Edge to learn more!