Did you know that nationwide marijuana use increased by 67 percent in 2020? It's no secret that the cannabis business is growing quickly, it's probably why you're in the process of opening your own cannabis business, and the reason you're reading this article.
However, before you open the doors to your dispensary, you need cannabis insurance. The company insurance you need for your dispensary is going to look a little different from typical business insurance.
If you want to ensure that you're insured correctly, keep reading for nine things no one told you about cannabis insurance.
1. You Need General Liability Insurance
General liability insurance covers your business if an injury or damage to property occurs during the course of regular business operations. This can cover things such as:
- - Bodily injuries
- - Property damage
- - Operational costs
- - Personal injury
- - Product liability
- - Legal expenses
This is the most basic type of insurance you will need for your dispensary.
2. You Need Product Liability Insurance
For most dispensaries, product liability insurance will be part of your commercial general liability insurance policy. However, you need to be sure that it is in fact included.
This type of insurance will protect your business when it comes to product lawsuits and other claims that get made due to faulty products. Essentially, if you manufacture or sell a product that has a defect and therefore causes harm, your business can get held liable.
Product liability can cover injury, wrongful death, illness, and property damage.
3. You Need Commercial Property Insurance
You also need to make sure you cover the building that you run your business out of. Commercial property insurance can help protect you from theft, fires, and other natural disasters.
It's important to note that some natural disasters might not automatically get covered, such as hurricanes or earthquakes. Check your policy to see what it covers and what it doesn't.
You may need to add special coverage if you live in an area that has natural disasters that aren't covered. This type of insurance will often get bundled together with your general liability insurance.
Some of the things you might want to ensure are included in your coverage are:
- - Your business building (rented or owned)
- - Office equipment
- - Accounting records
- - Essential company documents
- - Signs
- - Satellite dishes
- - Fence
- - Landscaping
- - Inventory in stock
- - Manufacturing or processing equipment
4. You Need Worker's Comp Insurance
It is required by law in nearly every state for businesses to have worker's compensation insurance. However, even if you live in a state where it's not required, it's good business to have it.
This insurance will help cover your business if an employee gets hurt or sick on the job. Worker's compensation insurance will help pay for medical expenses and lost time on the job.
5. You Need Business Income Coverage
Disasters can happen at any time, and while your commercial property insurance might cover the costs of damage, what happens when you can't reopen your doors right away? If your building burns down, you might need to close your doors for a couple of months.
Business income coverage can help replace your lost income while you get back on your feet. This can help pay for operating expenses and more.
6. You Need Cyber Liability Insurance
How do you store your customer's information? In the digital age, cyber-attacks are becoming more and more common.
Even if you have safeguards, someone might get past them. Around 30,000 websites are hacked daily.
If your customer's sensitive data gets stolen in a cyberattack, insurance can help cover:
- - Notification costs
- - Credit monitoring
- - Civil damages
- - Computer forensics
- - Reputational damages
7. You Need Professional Liability Insurance
Professional liability insurance is different than your commercial liability insurance. This type of insurance also gets called errors and omissions insurance. Professional liability insurance covers you in a variety of circumstances.
If you're accused of misrepresentation, negligence, or giving inaccurate advice, professional liability insurance covers you. The amount of insurance you need is dependent on the field.
That's one of the many reasons it's important to speak to an insurance agent who understands the unique needs of the cannabis industry.
8. You Might Need Other Forms of Insurance
Does your dispensary plan to offer delivery services for your products? If so, you might need a few other types of insurance policies.
You will need commercial vehicle insurance to cover vehicles used for your business. You also, want to consider purchasing inland marine coverage.
Inland marine insurance coverage covers your products when they're in transit. If during the course of transporting products they are stolen, lost, or damaged, an inland marine insurance policy can help cover the cost.
Another type of insurance to consider for your business is commercial crime insurance. Commercial crime insurance can help cover losses that occur due to illegal activity.
It can cover you whether the loss comes from outside your company, or an employee.
Some of the illegal activities that might get covered by a commercial crime policy include:
- - Forgery
- - Computer fraud
- - Employee dishonesty
- - Illegal transfer of electronic funds
- - Ransom
- - Kidnapping
- - Extortion
Make sure that when you talk to your insurance agent, you discuss the various policies that could be beneficial for your company.
9. You Need A Cannabis Insurance Company
When it comes to getting your insurance coverage, you want to choose an insurance company that specializes in cannabis insurance. Cannabis insurance companies understand the unique needs dispensaries have when getting insured. You shouldn't trust your insurance to a company that doesn't specialize in insurance for dispensaries.