Cannabis Insurance: A Guide to Covering Your Crop

Business owners work hard building their business, so finding the right protection is crucial to maintaining it. Due to the nature of the cannabis industry and its attraction to the criminal element, security measures like alarms, cameras, etc. are the norm. But as a cultivator, the counteracting risk goes far beyond just implementing physical security measures. Choosing the right insurance policy for your cannabis cultivation business provides complete financial protection from a wide range of negative actions, so you can focus on your farm’s success. 

Cannabis Cultivator Insurance

Farming is an inherently risky venture, and the danger of losing inventory to pests, weather, fire, and more is ever present and can quickly diminish your company’s revenue. This is a point that became vividly illustrated by the extreme fire seasons in the West in recent years that claimed a number of cannabis farms. 

For cannabis cultivators, the most valuable part of the business is the crop itself, including living plant material, harvested plants, and finished stock ready for retail or further processing. Many insurance policies designed for cultivators protect the cannabis plant in all these forms (a.k.a. crop insurance or product insurance), but actual coverage will vary by policy. Additionally, other property, like equipment and buildings, can be covered by your policy as well, so you can protect your cultivation business and all its assets. 

While each insurance policy is different, many cover damage and loss resulting from

• Fire and smoke
• Water leaks
• Inclement weather and flooding
• Theft
• Vandalism

Policies can also cover worker’s compensation, general and product liability, and business income. If there is a certain type of coverage you want included in your policy, discuss it with your provider. Note: currently, cannabis cultivator insurance for outdoor farms is largely unavailable, but this may change with time, as the industry continues to mature. 

Risks of Not Insuring Your Cultivation Business

Cultivating cannabis can require an immense investment in equipment, resources, and labor hours. Even knowing this, many businesses forgo full insurance coverage, assuming that unfortunate events won’t happen to them. But when they do, businesses find it difficult to recover from the loss. Being properly insured helps guarantee that, when the unexpected happens, your business operations can be reestablished, employees are paid, and any other losses are recouped, so you can get back to growing as quickly as possible. 

In other cases, liability from accidents on business premises or from adverse events linked to products can result in tremendous loss for your company. While liability insurance protects your business against things like on-site injuries, product liability insurance specifically protects you in the event of sick or injured consumers as a result of your products due to contamination, defect, improper labeling and warnings, etc. Sometimes product liability is included in general liability insurance policies. Other times, it must be added separately. 

More Than Growers

Of course, cannabis, hemp, and CBD businesses of all kinds can benefit from the financial security offered by comprehensive insurance coverage. From cultivators, processors, and manufacturers to distributors and retailers and more, the many levels of the cannabis and hemp supply chain face a myriad of unique challenges. 

Insuring your cannabis business means you’ll be reimbursed against losses and gives you peace of mind that you are protected against adverse events. CannGen is dedicated to working with clients in the cannabis industry to help them secure an insurance policy that fits their business and provides the coverage they need. Do you have questions regarding insurance for your cannabis business or ready to get started? Contact us here.   

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 blog.

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.