As more states legalize medical marijuana and the sale of cannabis, more businesses are popping up to serve customers looking to buy the newly available product. Whether you are a cultivator, a dispensary owner, or a delivery service, it’s important to protect your business in this growing industry. One of the best things you can do is invest in cannabis insurance to cover those unexpected events that can occur in the course of daily operations.
- 5 Best Cannabis Insurance Companies
- What is Cannabis Insurance?
- What are the types of business insurance a cannabis business may need?
- How much does cannabis insurance cost?
- Can I Get Insurance for My Hemp Business?
- Will Property Insurance Cover My Dispensary?
- Do I Need Medical Liability Insurance for my Dispensary?
5 Best Cannabis Insurance Companies
While there are many new cannabis insurance companies that businesses can approach, it can be hard to decide which company is the best one for your needs. Here are a few of the top cannabis insurance providers and what makes them a great choice.
- Veracity Insurance Solutions: Best for High Risk/Unusual Industries
- The Cannabis Insurance Company: Best for Tailored Packages
- Cannasure: Best for Medical Providers
- MFE Insurance Brokerage: Best for Online Services
- Admiral Insurance Group: Casualty Insurance
Veracity Insurance Solutions: Best for High Risk/Unusual Industries
This national E&S wholesale brokerage firm specializes in providing coverage for businesses in unusual industries or risky fields. For those growing and selling cannabis, both designations apply. Veracity offers insurance for ingestible and topical CBD/hemp and cannabis/marijuana providers. They don’t offer online quotes, but you can fill out an online application or download and fill out a PDF application to submit.
The Cannabis Insurance Company: Best for Tailored Packages
Dedicated exclusively to providers in the cannabis industry, The Cannabis Insurance Company offers a surprisingly wide range of insurance. They have tailored packages for each area of the market, so it’s easy to just pick the coverage that works best for your business. You’ll find products for cannabis laboratories, cultivators, and delivery services. They also offer insurance for hemp/CBD providers.
Cannasure: Best for Medical Providers
Another insurance broker that caters solely to those in the cannabis industry, Cannasure offers a customer-oriented focus and downloadable applications. They also provide tailored packages for different segments of the industry, including for medical doctors and testing labs. Cannasure offers insurance coverage for medical doctors that prescribe medical marijuana. Their coverage options help fill the gap left by other insurance companies that won’t cover the advice and prescriptions that a doctor makes regarding cannabis.
MFE Insurance Brokerage: Best for Online Services
Cannabis production is just one of the multiple industries in which MFE Insurance Brokerage provides insurance. Their online portal offers customers a selection of useful services, such as instant certificates and proof of insurance, and claims filing. You can also contact this provider any time of the day or night through their 24-hour support number. They offer an online application for coverage, but no instant quotes.
Admiral Insurance Group – Casualty Insurance
A well-established company, Admiral Insurance Group has been in business since 1974. Like Veracity, they are also a wholesale S&E insurance provider dedicated to covering those in risky industries. They offer casualty insurance for those in the hemp/CBD oil industry and the cannabis field. Casualty coverage is a selection of insurance policies that focus on protecting the business from loss of property, product damage or loss, and various liabilities. Admiral doesn’t offer online quotes, but you can request one via phone, email, or at one of their local branches across the country.
What is Cannabis Insurance?
Any business that operates within the cannabis industry will want to purchase a small business insurance policy to protect their product, equipment, and employees. Essentially, cannabis insurance includes a selection of coverage options that are tailored to the needs of businesses in this controversial area of the market.
There are many coverage options available for businesses in all levels of the cannabis industry. Farmers, processors, or dispensaries will each have different requirements.
Cannabis insurance, or also called marijuana insurance, refers to one of these business insurance coverages that a cannabis business may need.
What are the types of business insurance a cannabis business may need?
Here are some of the more common business insurance coverage a cannabis business may need:
- General liability insurance
- Product liability insurance
- Professional liability insurance
- Inland marine insurance
- Commercial property insurance
- Workers compensation insurance
- Commercial auto insurance
- Business income interruption insurance
- Commercial umbrella insurance
- Cyber insurance
General liability insurance for cannabis businesses
General liability insurance pays settlements and damages related to accidents that occur on your property. This can cover repairs to another person’s property, such as a vehicle or medical payments after injury.
All types of cannabis businesses operating out of a physical space, be it a farm, a warehouse, or a retail front, will need this insurance coverage. This is particularly important to dispensaries with busy foot traffic.
>>MORE: Best General Liability Insurance Companies
Product liability insurance for cannabis businesses
Product liability insurance covers any injury or damage caused by a faulty product, which would be cannabis and related paraphernalia. All types of cannabis businesses will need to have this insurance coverage.
Product liability insurance is particularly necessary in cannabis business given the still-controversial nature of this business. The product is still under heavy debate if it is good or bad for recreational purposes. Side effects from cannabis product is popular. Many people can choose to sue cannabis companies that they got into car accidents or didn’t pay attention at work because of the effects of consuming marijuana.
>>MORE: Best Product Liability Insurance Companies
Professional liability insurance for cannabis businesses
Professional liability insurance: If you make a recommendation that results in income loss, damage to property, or harm to another, professional liability insurance can cover potential fees and lawsuit damages.
This is particular relevant to healthcare professionals who recommend marijuana as a treatment option. If their recommendation results in their clients losing jobs, and losing income, they might be sued. A professional liability insurance policy, or malpractice insurance policy in this case, will help cover that.
Similarly, it applies to sales associates in a dispensary the same way. If their recommendation results in similar damages, they might get sued. And professional liability insurance policy will cover that.
>>MORE: Best Professional Liability Insurance Companies
Inland marine insurance for cannabis businesses
Inland marine insurance protects your property and goods if they are damaged or lost while in transit. For instance, you are a processor sending packaged marijuana buds to a dispensary and the driver is involved in a car crash. The inventory you lose in the van is protected under inland marine insurance.
All business types in the supply chain of cannabis industry will benefit from this insurance coverage.
Commercial property insurance for cannabis businesses
Commercial property insurance pays for repairs to equipment or the building when something or someone damages it. If you operate your cannabis business out of a physical space, whether you own or rent it, you will need to get a commercial property insurance policy.
>>MORE: Best Commercial Property Insurance Companies
Workers compensation insurance for cannabis businesses
If you have employees, workers’ compensation insurance is a must since it is required by law. This will cover the costs of employees work-related injuries or illnesses, including medical cost and lost wages. If you are running cannabis business by yourself, you are a self-employed independent contractor, you still need workers comp insurance coverage to protect yourself when you get injured at work.
Working a cannabis business isn’t the most risky job. However, it is an emerging business, there are still a lot of unknowns. Everything seems to be fine now until things are uncovered and affects your health. Make sure to get workers comp insurance coverage to protect yourself and your employees.
>>MORE: Best Workers Comp Insurance Companies
>>MORE: Best Workers Comp Insurance Companies for Independent Contractors
Commercial auto insurance for cannabis businesses
If you use a vehicle for work, including going from one work site to another or deliver goods to another destination, you will need a commercial auto insurance policy. This is particularly relevant for businesses in the distribution of cannabis products.
Your personal auto insurance policy doesn’t cover you if you drive your vehicle for work. The personal auto insurance company will refuse your claims. Even worse, they might drop you off altogether when they find out. Commercial auto insurance is usually a bit more expensive than personal auto policy. However, it is not worth it skipping it.
>>MORE: Best Commercial Auto Insurance Companies
Business income interruption insurance for cannabis businesses
Business interruption insurance helps you pay the bills if you need to close due to a disaster. However, the pandemic of 2020 made it very clear that most of these policies do not cover pandemics. This enraged many business owners who were forced to close, including barbershop owners, who were left wondering why they purchased business interruption insurance if they couldn’t use it. There have been many lawsuits filed over this, although if your policy specifically stated that pandemics weren’t covered, you’re probably out of luck.
However, if a blizzard or a flood hits your state and city, and as a result, you have to close your cannabis shop for an extended period, for example, more than a week and lose the income from shop, business income interruption insurance will cover your lost income until you can open your shop and earn income again.
Commercial umbrella insurance for cannabis businesses
Commercial umbrella Insurance or excess insurance policy kicks in when your primary insurance policies reach a limit maximum. This insurance pays on very large damages, usually starting at $1,000,000 or more.
Since cannabis business is new, little history data is available to assess the level of risk and the amount of coverage needed. Many companies in this new industry actually require a higher coverage of $3,000,000.
Cyber insurance for cannabis businesses
Businesses with computer systems that are connected to the internet may be at risk of data theft. Cyber liability insurance can cover legal fees, credit monitoring, and settlements if your customer’s, employee’s or your private data is stolen.
This insurance coverage is particular relevant to healthcare professionals who prescribe marijuana to their patients and dispensaries, especially the online stores, who keep their customer files in their systems.
>>MORE: Best Cyber Insurance Companies
Other insurance coverages for cannabis businesses
- Stock and Inventory: If you are a manufacturer or dispensary, this insurance can cover damages to your packaged product, such as consumables, lotions, and sealed marijuana buds.
- Equipment Breakdown: If you are a farmer, cultivator, or processor of cannabis an equipment breakdown policy provides money to repair or replace your specialty equipment that happens to break.
- Crop Insurance: An essential for cultivators, crop insurance covers you in case something damages or kills your plants. Crop insurance can cover fire, theft, flood, and storms.
- Crime Insurance: This covers fees, bills, and settlements that may results from a crime committed against your business or employees, such as theft, fraud, counterfeit money, and kidnapping.
As you can see, there are lots of options for those in the cannabis industry. It is a good idea to speak with an insurance agent about the best coverage for your specific business, so there are no gaps that could leave you open to a loss.
How much does cannabis insurance cost?
The cost of cannabis insurance depends on several factors: the types of insurance coverage, the size of the business, the number of employees, the annual revenue, the location, etc. However, if a cannabis business gets one policy only, be it general liability insurance or product liability insurance.
The average cost of a general liability insurance policy is $800 to $3,500 a year to a small cannabis business. On the other hand, the average cost of a product liability insurance policy is $1,440 a year.
If you want to get an affordable business insurance policy for your cannabis business, be sure to shop around with a few companies or a digital broker like CoverWallet so that you can compare several quotes to choose the best one for your business.
Can I Get Insurance for My Hemp Business?
Yes, you can get insurance for your hemp business. There are several insurance companies that specialize in providing coverage for those in the cannabis or hemp industries. You may want to check out Veracity Insurance Solutions, The Cannabis Insurance Company, and Admiral Insurance Group. These providers can help businesses create policies that are specific to the hemp industry.
Will Property Insurance Cover My Dispensary?
Yes, if you get property insurance through an insurance company that serves the cannabis industry. Property insurance will cover damage to the building, fixtures, contents, and computers. So, if an employee accidentally breaks a glass case inside the dispensary, property insurance would cover the repairs or replacement of the glass.
>>MORE: Commercial Property Insurance: Coverage, Cost, and Best 5 Providers
Do I Need Medical Liability Insurance for My Dispensary?
As dispensaries don’t provide medical advice or create prescriptions for customers, they generally don’t need the same types of insurance as a doctor. However, dispensaries do sell a product that people ingest, inhale, or apply topically. It’s possible a customer could sue claiming that your cannabis made them sick or caused injury. In this case, product insurance can protect your business by paying any settlements or damages awarded in a lawsuit.
>>MORE: Product Liability Insurance: Coverage, Cost, and Best 5 Providers
Final Thoughts:
- The cannabis industry is broad and includes everything from farming to delivery services. So, insurance companies must offer a wide range of policy options.
- There are multiple boutique insurance providers dedicated specifically to the cannabis industry.
- You’ll need to contact the insurer directly to request a tailored quote for your business.
- Some of the top cannabis insurance companies include: Veracity Insurance Solutions, The Cannabis Insurance Company, Cannasure, MFE Insurance Brokerage, and Admiral Insurance Group.
- Hemp businesses can also obtain hemp/CBD insurance through some of these insurance companies.
