What Types of Insurance do Cannabis Industry Companies in MA, VT, NY, NJ and New England Need?
Similar to New York, Vermont, New Jersey and other New England states, the Massachusetts Cannabis Commission requires that workers' compensation, general liability and product liability coverages be in place. We recommend that cannabis business owners have commercial umbrella, professional liability, commercial property, professional liability and non-owned hired auto coverage.
A few coverages that will be beneficial as the marijuana business grows are recommended. The items listed below are insurance coverage types applicable to various cannabis operations:
Dispensaries that sell marijuana for medicinal or recreational use face many of the same risks as other businesses today, including fire, vandalism and theft.
Marijuana growers cultivate marijuana for recreational or medicinal purposes. There are risks present that are similar to those of marijuana dispensaries.
Producers/extractors/processing facilities that produce cannabis products must deal with product recalls and product liability. They also have to comply with many regulatory requirements for consumer-based products.
Cannabis testing labs require general and professional liability insurance.
Anybody leasing cannabis facilities such as warehouses, greenhouses or retail offices.
Wholesalers that sell cannabis products to retail outlets.
Products Recall/Product Liability Insurance for Cannabis
Hemp and cannabis are similar to other consumer-based products, such as beer or food. Vendors are at risk of their products causing injury, illness, or worse because people use marijuana. To protect the owners of marijuana businesses against claims for defective or harmful products, there is product liability coverage.
Professional Liability Insurance (especially for Doctors, Dispensaries, and Labs).
As with other professionals, cannabis professionals are often asked to offer expert advice and recommendations. The marijuana business owner or employee may be held responsible for negligent or faulty guidance if the advice results in a negative outcome. Professional liability (also known Errors and Omissions coverage) is designed to protect you and your staff from this type of exposure. Professional liability coverage for marijuana recommendations must be purchased separately. This coverage is not included in the typical medical malpractice policy.
Workers' Compensation for Cannabis
Every business owner must have workers' compensation insurance. Workers' compensation is a system that protects workers in the event of an injury at work or a job-related illness. Our carriers offer flexible payment plans with very low premium requirements and have very minimal premium requirements.
Commercial Umbrella Insurance Coverage for Cannabis
This coverage covers exposures beyond those covered by the other coverages. To address the large auto exposures associated with product delivery, umbrella coverage is especially important.
Commercial Property Insurance for Cannabis
Commercial property insurance can be one part of a comprehensive insurance plan for businesses. Although this coverage can be purchased separately, it is often bundled with a larger program that includes general liability coverage for bodily injury and damage to property. This coverage has significant variables such as policy limits and exclusions, claims made against occurrence and other factors.
Cannabis Industry Auto for Commercial Use Coverage
This coverage covers losses that occur when vehicles, trucks, vans, or other vehicles are involved in business operations. This type of insurance is required in most states if you own a vehicle that is used for business purposes. Without the right protection, you cannot drive your vehicle for business or get it registered. These are the requirements.
Cannabis Insurance: Business Interruption/Business Profit
Although these terms can be used interchangeably, insurance for business interruption and income are two different types of coverage, particularly in the cannabis industry.
The first one is used to cover expenses for temporary shut downs.
As its name suggests, the second covers lost earnings in the event of a business having to close due to covered perils. Each carrier is unique and sometimes business income coverage is not available. This is due to the high valuation of cannabis inventory. It doesn't matter what your situation is, it's important that you discuss the terms and conditions of coverage, as well as exclusions, in order to prevent any unplanned interruptions to your operations.
Cyber Coverage for Cannabis
According to the FBI, there are approximately 4,000 cyber-attacks per day and 67% of small businesses employing less than 1000 employees have been victims of cyber attacks. According to the State of Cybersecurity report, cyber-attacks now cost nearly $3 million. Cyber coverage can help protect sensitive client data, employee data, and product data. This is particularly important if you have the right to access clients' medical records per HIPPA.
Security and Crime Coverage:
Cannabis businesses need to address and evaluate:
Background checks are required before employees are hired.
Access to the business under control.
Training for employees in security measures on and off the premises.
Cameras and security systems in key areas.
Monitoring separate cash vaults and product vaults.
Customized Insurance Policies by a Trusted Regional Source
Businesses that deal with cannabis should look for coverage through a partner who has the market access and experience to offer a customized program. Pearson Wallace Insurance Agency in Vermont, New York, New Jersey and Massachusetts is your cannabis insurance partner. We can help you navigate the insurance process for your cannabis business! Request a call with a Pearson Wallace Insurance agent now to get your customized quote.