The cannabis industry is huge, despite the restrictions. It is one of the fastest-growing industries in the US. And since marijuana has been legalized for medical reasons in 39 states, its popularity has only increased in recent years.
So, if you have a cannabis business, it is time to protect yourself with the right insurance. Cannabis businesses are risky ventures as they are still illegal in some states. Thus, finding the right insurance companies to insure your cannabis businesses is vital to keep you and your customers safe.
But what are the things to know about cannabis insurance? Keep reading to get a better understanding of insurance for cannabis business owners today!
Table of Contents
1. The Different Types of Insurance for Cannabis Businesses
The most common type of insurance for cannabis businesses is product liability insurance. This type of insurance protects businesses from injury or damage claims caused by their products.
Cannabis businesses also need to carry general liability insurance. This covers claims for personal injury, property damage, and other general damages.
Another type of insurance that cannabis businesses should consider is workers’ compensation insurance. This type of insurance protects employees from injuries or illnesses that occur while working.
Also, workers’ compensation insurance is mandatory for states that legalize cannabis.
2. What You Need to Know Before Buy One
A cannabis company faces a unique set of risks, from theft and vandalism to product liability. Make sure your insurance policy covers all your potential risks. Look for a policy that includes coverage for property damage, product liability, business interruption, and employee dishonesty.
Be sure to ask about exclusions and limits in your cannabis insurance policy. Some insurance companies exclude coverage for certain risks. Make sure you understand what is and is not covered under your policy.
It is also essential to shop around and compare policies. Insurance companies vary in their coverage options and premiums. Get quotes from several companies and compare coverages to find the best policy for your business.
3. The Risks of Not Having Insurance for Your Cannabis Business
Cannabis businesses are at risk if they do not have the proper insurance. Failure to have the right insurance coverage could lead to customer distrust, financial ruin, lawsuits, or other claims.
Cannabis businesses should work with an insurance broker to protect them.
4. How Much Does Insurance for a Cannabis Business Cost?
Cannabis insurance rates are all over the place. They can depend on many factors, such as the size and location of your business. It can also factor in the type of cannabis products you sell, such as medical-grade pure CBDA or simple CDB oils and tinctures.
They will also weigh in on your business’ claims history. But, the median rate for cannabis insurance is around $5,000 per year. For comparison, the median rate for other types of business insurance is about $2,000 per year.
Learn More About Proper Insurance
Cannabis businesses are at a higher risk for lawsuits and property damage. So, it is vital to get the right insurance for cannabis business owners and producers to safeguard your small business.
Make sure your business is adequately covered by shopping around for the best business policy that works for you. Work with an insurance agent to create a custom insurance policy that meets their needs.
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