How Much Does Cannabis Insurance Cost?

One of our frequently asked questions is: how much does cannabis insurance cost?

The cost of cannabis insurance can vary based on a number of factors including your type of operation. In this article, we will touch on the key factors that are true for all operations – focusing on three coverages: general liability, product liability and property coverage.cannabis dispensary

General Liability is coverage intended to protect you from claims such as slips, trips, and falls that can occur at your place of business. Product Liability is intended to cover bodily injury due to the consumption of your product or false labeling claims. Property coverage is intended to cover damage to property that you have interest in.

How much you pay depends on which line of coverage you’re looking for. If you’re looking for all coverages, multiple rating factors will be taken into account.

For example:

Coverage Rating Basis
General Liability Square footage or projected revenue
Product Liability Projected revenue
Property Value, location, security measures

 

In most cases, both general liability and product liability are rated on projected revenue as this is a good indicator of how busy your store is and how much of your product is on the market during the policy year. As a result, the higher these numbers, the greater your exposure.

Although the same “rating basis” is used for different operations, the cost of coverage may vary.

For example: Projected revenue is used for both a cultivation facility and a dispensary. A dispensary may have a higher general liability rate because they have more foot traffic in and out of the store.

Of course, the bigger your operation, the higher your revenue and property values are going to be – therefore, premiums will be higher.

If you’ve been in business and have had prior insurance in place, your loss history will also influence your insurance cost. If you haven’t had a claim in 5 years, you’ll likely be rated lower than a new venture.

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