Is It Difficult to Obtain Cannabis Insurance Policies?
There is a lot of risk that comes with starting a business. Even when properly managing that risk, the unexpected can happen. It is for this reason that businesses buy insurance policies that protect their assets.
For cannabis businesses, that risk is even higher, yet many find it challenging to obtain the right kinds of insurance coverage. Many others discover they can’t get any insurance coverage at all. This leaves them vulnerable to the consequences of everyday risks.
So is it difficult to obtain cannabis insurance policies? Not if you know where to look.
Can Any Insurance Provider Cover My Business?
Like all businesses, cannabis businesses must secure certain insurance coverages: such as worker’s compensation, property insurance, liability coverage, auto coverage, and product liability coverage.
In certain markets, specific coverages are required by the state. Washington lists out its required coverages for cannabis businesses. Its neighbor to the south, Oregon, does not. Whether or not specific coverages are required where you are doing business, it is a smart business practice to get standard coverage to assure your assets.
In an ideal world, cannabis businesses would be able to partner with any B2B insurance provider for all the coverage they need to protect their business. Unfortunately, because of the illicit status of cannabis at the federal level, many insurance providers have decided not to entertain these kinds of operations.
Coverage Restrictions to Know About
There are certain common policy restrictions for cannabis businesses you’ll want to become aware of when securing an insurance partner.
- Make sure your insurance provider knows the nature of your business. If you do not, and your insurance provider learns you work with cannabis after a claim is filed, they may not honor your policy.
- Some insurance providers will offer insurance on non-cannabis parts of your company. For example, you might find a provider that offers general liability coverage in case someone slips and falls in your dispensary, but won’t offer product liability that covers your cannabis products if they cause harm to a consumer.
- While crop insurance is available for indoor and greenhouse-grown cannabis and hemp plants, it is difficult to find a provider that offers coverage for outdoor cultivation.
Encouraging Services for Cannabis Companies
Legislation offering protection from federal repercussions to insurance companies working within the cannabis space is an important step towards easing difficulties faced by cannabis businesses. The Clarifying Law Around Insurance of Marijuana (CLAIM) Act was introduced in March of 2021 to offer clarity and protections for insurance companies working with the cannabis industry.
Some specialty insurance underwriting companies, like CannGen, have already been actively serving the cannabis industry for more than a decade and understand the unique risks and regulatory issues faced by a cannabis business – all while maintaining a positive track record of supporting its clients.
Choosing a Qualified Cannabis Insurance Partner
If you don’t currently have an insurance provider, it is important that you find a partner with prior experience working with cannabis companies and the necessary knowledge of cannabis regulations to ensure your business is fully covered against potential risk. Contact CannGen here to see what coverages you need to protect your cannabis business.
More Cannabis Industry News
Want to stay up to date on the latest? You can find more on important topics in the cannabis industry on our news page.
Or get more information about comprehensive insurance solutions for the cannabis, CBD, and hemp industries from CannGen here.
Disclaimer: Information shared is for general purposes only.