True or False: A Cannabis Business Entity Only Needs Enough Insurance to Meet the State and Local Requirements?
As with the other myths regarding cannabis insurance for legal marijuana operations, this one is false!
Cannabis insurance is required by State and local municipalities. Although requirements vary by state,States may only require businesses to carry general liability, product liability and workers’ compensation. A standard insurance policy may not cover a cannabis operation.
The reality is the minimum required limits of coverage are not always enough coverage to protect your cannabis business. Within the cannabis industry, anyone in the supply chain can be pulled into a claim – like a product recall for example. For this reason, we highly recommended looking into cannabis-focused insurance companies . According National Cannabis Insurance Services, “Your insurance provider should guide you through the coverages and limits needed to protect your business. They should discuss your exposures and provide options tailored to your business, while guiding you through the best options.”
Meeting the State and Local insurance requirements is a good start – but may not be enough. You could be running the risk of losing your business in the event of a big insurance claim. A cannabis claim can be very costly and wipe out your funds – draining you of the resources to pay employees, to buy supplies and materials, to pay for advertising and marketing, even to purchase new product. Get cannabis-specific insurance with policies that will meet requirements and protect your cannabis claims.
Please take a look at a recent product liability event in the cannabis industry here. Visit this blog post to read about a fire that caused much damage to a marijuana-growing operation. Check-out our many insurance policy coverage areas for cannabis operations here. And if you’re ready to engage with National Cannabis Insurance Services for proactive coverage to protect your business and operations, please get started right here. We look forward to speaking with you soon!