Cannabis dispensaries and businesses need to consider what type of insurance coverage they need based on how they operate their business. If the business has a physical location and on-site workers, they will need to set up policies that cover related liabilities and protect their property investment.
If they offer products online, the company will need insurance that protects against lawsuits related to identity theft or data loss. The policies can also provide a settlement for customers that have generated serious financial losses because of a cyber-attack or data breach. A comparison of all the policies shows business owners the best strategies for protecting their company and avoiding business-ending losses.
Product Liability Coverage for Cannabis Products
Cannabis products can present some issues for consumers, and a business that sells the products must use labels that identify any risks to the consumers. Product liabilities happen if the consumer is injured while using the cannabis product.
The customer can file a lawsuit against the manufacturer to collect compensation for their injuries, but the customer must follow all the details and instructions on the packaging. By operating a cannabis store, the owner must get coverage if they grow their own crops. The store owner can learn more about Cannabis Insurance by contacting an insurer now.
Property Insurance or Renter’s Coverage
Where the business owner conducts their business defines what property insurance they need. If they own their commercial property, the property owner needs to get commercial property insurance. The policy will cover the property itself and their inventory that is stored in the property. Liability coverage is included for the property owner that protects against financial losses if someone is injured on the property.
If they are renting a space for the business, they need to get renter’s insurance to cover liabilities such as property damage that could happen while conducting their business. It will also cover all the inventory and other items they store on the property. The coverage also protects against liabilities.
General Liability Coverage
The policies protect against financial losses and lawsuits, and a business that sells cannabis must get protection against the legalities of selling the products. If they are selling products online, they will need to determine if the customer can purchase cannabis in their resident state or country. If the company sells cannabis products to customers in areas where it is illegal, the company and the customer could face criminal charges.
General liability coverage can help with financial losses because of these legalities. It can also provide a settlement if a customer is injured on the physical location and file a lawsuit against the company. The policy is used to prevent serious financial losses that could shut down the business and prevent it from operating.
Protection for Injured Workers
Workers’ compensation insurance is a policy that is required by state and federal law if the company hires more than one worker. It doesn’t matter if the worker is related to the business owner or not, they will still need the insurance. It provides compensation and payments for all medical expenses incurred by an injured worker. If the worker is unable to return to work immediately, the policy provides up to 90% of the injured worker’s salary or wages.
The policy will also provide a settlement to the injured worker if they are denied coverage and the worker files a lawsuit against the insurer or the employer. It will protect the company’s investments and prevent workers from facing financial losses.
Coverage for Damaged Crops
When growing cannabis, there is a chance that the crop could get destroyed or stolen. It is vital for a cannabis business to have coverage for a loss of their crop if they grow their own products. The policy provides them with funds to replace the earnings they lost because of the crop. A claims adjuster will have to review the crops and their current condition to determine the cash value of the crops. They can also get compensation if there was a break-in and another party stole their crops.
Cyber Liability for Online Businesses
Customer data must be protected at all times, and if the business operates online, they need cyber liability coverage. The insurance provides compensation if the company generates a financial loss after data is stolen or corrupted. If a customer becomes a victim of identity theft because of inferior security schemes, the company could face a lawsuit since it was their fault. These financial losses are covered by the insurance policies, and the business owner will have to file a claim for coverage. The IT systems must meet all IT standards, and they are evaluated when the policies are purchased.
Coverage for Machinery and Equipment
Policies are available to cover machinery and equipment used to cultivate crops and produce the company’s products. If the machinery or equipment fails, the insurance pays for repairs or replacements for the products. When growing crops, the business owner will need grow lights and a greenhouse for the plants. If these areas are damaged, they will need to file a claim through their insurer.
Loss of Income Coverage
If the cannabis dispensary is shut down, the business owner will not generate profits. In recent years, a global pandemic shut down all non-essential businesses, and companies lost thousands of dollars. If these events happen in the future, the cannabis business will need the policy to help them generate profits when they cannot operate their physical location.
Cannabis business owners need to consider all the insurance policies available to them. With the right insurance, they can protect their property and their inventory more fully. If they have workers that work within their physical location, they will need coverage for worker-related injuries and accidents.
When operating any business, they will need to set up insurance policies that protect against liabilities such as accidents where customers become injured. They will also need coverage for accidents that happen when customers use their products. A review of all insurance policies helps business owners make decisions about their coverage.