There has been a huge demand for cannabis insurance due to most states’ widespread legalization of marijuana. This is both for medical and recreational purposes. The federal and state law inconsistencies make it hard for organizations to get affordable and inclusive insurance. Cannabis is also classified as an illegal substance via the (CSA) Controlled Substances Act.
Policyholders are often left with restrictive policies because of these fast-changing regulations. This increases the possibility of buying the wrong or substandard insurance plans. The cannabis industry continues to experience rapid changes, so businesses must stay informed. Below we will go over some specialized insurance policies for businesses in the cannabis industry.
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Overview Of The Cannabis Insurance Industry Challenges
Despite the huge growth being experienced in the cannabis industry, they are still trapped in between federal and state laws. This has dampened the spirits of insurers towards the cannabis industry. The phenomenon has made it hard for cannabis businesses to access dependable insurance coverage.
Conventional insurance companies’ reluctance to enter the market has left only a small number of product offerings. This has left many cannabis-related organizations no choice but to go for general and ineffective plans. Some of the insurance plans in the market cannot sufficiently cover the needs of cannabis businesses.
Cannabis Insurance: What Type Of Insurance Is Available?
Each business organization has unique insurance needs that would help it mitigate and transfer risk. Currently, cannabis companies can be covered by the following insurance plans.
- Product liability insurance
- Workers compensation insurance
- Commercial property insurance
- General liability insurance
Product Liability Insurance
Cannabis-based businesses need to moderate risks from customer claims. A business with a product liability insurance plan transfers the risk to the insurance company whenever a claim is made. This means that your business will no longer be liable whenever an individual experience a reaction from your product’s usage.
Find a credible insurance broker with experience in the cannabis sector to help you choose the right coverage for your business. The advisor will help you find the insurance option that covers any damages. The cover should also defend you when your business or staff is sued for causing harm to a third party or customer.
Workers Compensation Insurance
Just like any other company out there, a cannabis organization will have workers. The law requires that every business has a workers’ compensation cover. This is to enable them to cover any unforeseen future problems like a work-associated injury. A worker’s compensation insurance product covers the employee’s lost earnings for work-associated illness or injury and medical costs.
Without this insurance plan, your business will have to cover the employee’s expenses. Note that non-compliance with this policy comes with severe penalties. You can also depend on the workers’ compensation cover when an injured worker litigates against you.
Commercial Property Insurance
This is a very important insurance cover for every business owner, irrespective of the industry. The policy protects the rented or owned property your business uses for its operations. Among the elements it covers include; buildings, tools, furniture, inventory, personal property, and equipment.
Business owners can now rest easy knowing they will be compensated for vandalism, theft, and fire, among other unforeseeable risks. Commercial property insurance also comes with business interruption coverage. This covers any loss of income during the period of interruptions.
General Liability Insurance
General liability insurance protects your organization from claims of harm done by your business or its employees. Among the situations where general liability insurance covers include;
- Third-party property harm: This is where your employees or business cause damage to another person’s property.
- Third-party bodily harm: This happens when a third party gets harmed through contact with the business property or employees.
- Advertising and personal injury: Your business gets covered when its public statements cause other parties to sue it for libel or copyright infringement. The insurance cover takes care of the damages and legal expenses.
Cannabis businesses face a lot of obstacles and risks now that it is still an emerging market. The differences between state and federal laws have made it hard for traditional insurance companies to provide certain covers for this industry, leading to the companies paying more for basic cannabis coverage. Customer claims are also a significant setback if uninsured. For more information, you can contact Leuter Insurance Group who offers custom insurance policies for businesses in the cannabis industry.
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