Whether you run a large corporation or manage a small store, looking after a cannabis business is no mean feat. From complying with legal requirements to protecting yourself from operational risks, you have to be careful at every other step.
This also includes the challenge of finding the right insurance policy for your business. Since this step covers your venture from various financial hardships, it remains crucial to the long-term survival and growth of your operations.
But the novel nature of the cannabis industry often makes it difficult for you to discover the ideal insurance policy for your business. Some of these offerings deliver barebones protection, while others put unnecessary hurdles in filing cannabis-related claims. To keep your business running, you have to steer clear of these potential pitfalls at all costs.
We know that you want to navigate your way through the cannabis industry and would like to participate in the legal cannabis industry for quite some time. That is where understanding the right insurance coverage for your cannabis businesses will come in handy.
Whether you are thinking about a product liability lawsuit, general product liability coverage, or claims arising from other damages, it is necessary to have the right level of knowledge and coverage to account for all third-party claims.
Remember that cannabis businesses can be quite successful, but there are ways to make quite many mistakes.
To help you through this process, here are common cannabis insurance mistakes to avoid while taking out a policy.
Not Buying a Cannabis-Specific Insurance Policy
Managing a cannabis operation is no different from running a conventional business from an organizational perspective. For instance, you need to take care of your cannabis business’ payroll, premises, and service quality the same way you would for a regular venture.
But even with these similarities in mind, you need to remember that your cannabis venture still stands apart from typical businesses due to the very nature of the substance that it handles. This difference is most evident in how you have to deal with stringent laws and regulations. However, it is also quite clear how traditional insurance companies approach cannabis businesses.
If you take out a regular business insurance policy, there’s a high chance that your insurance company may classify cannabis as a regulated substance and not extend your business the protection that you need. Due to this reason, you must take a cannabis-specific insurance policy that steers clear of this bias and provides full coverage for your operations and property.
These are the nuances to pay attention to regarding the cannabis industry. Those who can account for the minor details that range from product liability coverage to product liability insurance and more will make strides in the industry as they transfer their risk.
Not Getting Product Liability Insurance
General commercial liability insurance covers risks such as slip and fall accidents on your premises or any injuries experienced by others through your operations. More often than not, it works as a comprehensive insurance policy that covers all major risks. But there are times when this offering does not cover the possibility of product liability.
This risk refers to when consumers make claims about your products causing them harm. Since cannabis has a volatile relationship to controversy despite its high safety profile, these claims can often come with demands of significant compensation. If you have to cover these costs through your pocket, it can be enough to rattle the foundation of your business.
That is where product liability insurance can protect you against this very issue. With this insurance policy, you can rest assured that you have a financial safety net if these claims ever arise for your business.
Not Considering Crop Insurance
Looking at the fine print of general business insurance policies is a fairly straightforward point to remember. But apart from getting the usual coverage such as property insurance and liability insurance for your cannabis business, you also need to consider if you need crop insurance, which can be highly specific to some cannabis ventures.
Crop insurance typically covers agricultural produce that is lost to natural disasters. But when it comes to cannabis businesses, it can also cover cannabis plants grown on farms or indoor facilities. You need to ensure that you take out this policy through a provider who specifically delivers protection for cannabis operations.
If your cannabis venture grows its plants in any form, getting this policy or a form of its offered protection can cover you against most instances that could damage your crop. In addition to natural disasters, this may also include fire incidents. In turn, this policy ensures that you are financially secured in the face of devastating situations.
Not Comparing Insurance Providers
Once you start looking for insurance policies that are tailor-made for your cannabis business, you may find that the network of cannabis-specific insurance providers is smaller than conventional insurance companies. This may drive you to pick the first provider you find that specializes in cannabis business coverage. But this approach can work against you.
To get the best coverage, service, and premium, you must take your time to compare all cannabis insurance providers that are available in your area. The process requires you to reach out to each company for specific quotes and then research their offered solutions and their reputation. But the time that you invest in this due diligence is worth it.
By making sure that the provider you are signing up is reliable in their coverage, renowned for their service, and competitive in their pricing, you can rest assured that they would be there for you when you need their help the most.
General Mistakes to Account For When it Comes to Cannabis Companies
We find several other mistakes that cannabis dispensaries and many cannabis businesses make when it comes to risk mitigation. Here are a few other issues and various risks to look out for when insuring businesses within the cannabis sector.
Not having a business interruption policy in place
Not purchasing cyber insurance and not backing up your data
Purchasing coverage that doesn’t cover the full range of risks associated with operating a marijuana business, such as theft or fire damage to the property
Failure to notify their insurer about changes in operations
Failure to amend an existing policy when new information becomes available (e.g., adding additional employees)
If you are looking for help with commercial property coverage, medical bills, bodily injury, commercial auto, cannabis product coverage, and more, reach out to our professionals at The Huttenlocher Group today.
Find a Reliable Cannabis Insurance Provider Near You
Once you have the required information at hand, it is not difficult to find a cannabis insurance provider who fits all your requirements. You need to ensure that you ask the right questions and look at all the required details without any compromise.
At The Huttenlocher Group, our cannabis insurance specialist takes a comprehensive approach to cover your business from major and minor operational risks alike. No matter the size of your business, our team makes it a point to understand your needs and delivers highly personalized policies to fulfill them.
To see how our solutions can help, don’t hesitate to contact us at (248) 681-2100 to request a quote today. We will be glad to note down your requirements and guide you towards the perfect insurance coverage for your business.