Cannabis insurance is a policy or combination of policies that protect marijuana businesses against associated risks. dispensaries, growers, and testing labs need different levels of coverage, but all need at least one general liability policy.
Cannabis insurance costs are higher than in other industries due to the risks associated with the product and its status as a schedule one controlled substance. a liability policy, for example, can range from $975 to $3,300 a year. there are several types to consider, each with its own coverage and cost, depending on your unique situation and business model.
Reading: What does cannabis insurance cost
embroker is a fast and easy way for business owners to get insurance. Your online application is easy and takes less than 10 minutes to complete, connecting you with multiple providers to fit your needs. After you apply, you can manage your quotes and policies online for free.
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marijuana insurance costs & policy deductibles
In total, if you operate a dispensary, costs can range from $2,500 to $7,500 per year; these figures are for a smaller scale operation. companies with additional operations, such as cultivation or laboratory tests, will pay more. For example, when we researched for this article, we received a $125,000 quote for a marijuana grow business with $1.5 million in annual revenue and $250,000 in marijuana grow coverage.
The quoting process is much more detailed than for other retail companies. When requesting a quote, be prepared to answer questions like:
- How do you prevent sales to minors?
- what do you do to make sure your product doesn’t reach criminal companies?
- how do you prevent the product from entering a state where it is illegal?
- What security measures are in place to prevent theft outside of working hours or by employees?
- Do you provide any products to employees?
- What training do your employees have in case of theft?
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Having the answers to these and similar questions ready will make the quoting process go faster. it also shows the provider that to mitigate risk, you have a plan in place.
cannabis insurance policy coverage
there are several policies to consider; Policies such as general liability should be an immediate option, regardless of the type of business. others, like crop insurance, are only necessary if your business is in the farming business.
most common types of marijuana insurance
how to take out insurance for clinics
Due to a combination of state regulations, federal illegality, and the overlapping nature of a dispensary for medication or personal use, navigating marijuana insurance can be complicated.
Start by researching state and local business regulations to find out what is allowed and what is required. Next, do some research on potential providers to determine their reliability. Many providers are new or unregistered, so they are not supported by the government if the company goes bankrupt. You’ll want to make sure the provider’s financial qualifications show that it’s financially stable. Finally, consider working with a broker who can provide you with multiple quotes to help you save costs.
frequently asked questions (faqs)
Do I need insurance for my cannabis business?
Getting insurance for your company is always a wise decision. The bank usually requires insurance to protect its interests if your company has a loan. the state where you operate may also require insurance or a bond. Also, if you have hundreds of thousands invested in a crop, is it worth the risk of not insuring it?
what type of insurance is right for my business?
It depends on your operation. At the very least, you should consider getting a general liability policy. If you have a lot of property or a loan, then you’ll also want to consider one for commercial property. On top of that, you may be required by law to have workers’ compensation, especially if you have employees.
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Review your cannabis business with your agent or broker to determine which coverage is best and which are required.
will my personal auto insurance cover deliveries?
Most personal auto policies have exclusions for business use. This means that if at the time of the loss, your vehicle’s purpose of use is for business, there will be no coverage under your personal auto policy.
For this reason, you’ll want to consider a commercial auto policy if you regularly transport or deliver marijuana.
Does my homeowners insurance cover my greenhouse?
Most homeowners policies have an exclusion for business activities on the premises. As such, if you grow marijuana in a greenhouse on your personal property, your homeowners insurance likely won’t cover any losses related to the business.
When it comes to your budding business, you don’t want to overlook the importance of cannabis insurance. Due to its complicated relationship with federal and state regulations, working with a broker is a good idea when shopping for dispensary insurance.
embroker is a great broker who can connect you with multiple marijuana insurance companies, after asking questions specific to your business. visit embroker today to start protecting your business.
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