True or False: Because Legal Cannabis Products Are Screened and Tested, Product Liability Insurance Is Not Necessary?
The cannabis industry is risky, partially because of the temporary effects on the minds and perceptions of those who imbibe cannabis. Therefore, all products are rigorously tested before hitting the shelves for retail sales. Since cannabis products go through a strict process of testing to ensure that there are no issues with consuming the products, many businesses believe that product liability is an unnecessary coverage. If their product passes testing, there is no possible way something could go wrong. Right?
WRONG! Testing requirements do not eliminate exposures. One of the cannabis industry’s biggest exposures is product liability.
Product Liability Exposures can include:
- Breach of warranty
- Label claims
- Failure to warn
- Deceptive practices
- Bodily injury from intoxication
The entire supply chain from grower to retailer has product liability exposure. Product liability can be based on defect, negligence or strict liability. If something were to happen like a product recall or injury to a consumer because of Failure to Warn, your company can be faced with a claim that is very costly. Defense Only in product liability claims cost around $876,000.
National Cannabis Insurance Services highly recommends that cannabis entrepreneurs get Product Liability Coverage. Many states require all cannabis establishments to purchase Product Liability Coverage. The problem is that many cannabis insurance policies have exclusions with which most cannabis companies are unawares.
National Cannabis Insurance Services insures cannabis-only companies. We are here to help you understand policies and what is covered and what is not. NCIS will help you come up with the coverages your cannabis operation needs in order to stay protected and to stay in the black AND in the GREEN.
Want to hear more cannabis insurance myths debunked?
Our free Cannabis Insurance Myths webinar answers questions you may never have considered before as part of your cannabis business operations. Listen, learn, and understand how proactive cannabis insurance policies can protect your growing business in this burgeoning industry for the long run. We’re here for you – reach out to NCIS today with any questions or concerns you may have about Product Liability or Cannabis Insurance in general.
Thank you for visiting and reading this post!