Insurance for Cannabis Businesses
Cannabis, the High Growth Industry that is blooming
It has finally happened. The sale of marijuana and cannabis-related products is now legal. You have jumped through every licensing hoop the government has set up. Now all you need is to get insurance coverage for your marijuana, CBD, hemp, and cannabis-related Business.
Choosing a Cannabis Insurance Broker
If you have attempted to get coverage with a local agent you were probably met with a blank stare, a curt we do not offer that type of coverage or what have you been smoking response.
Marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such it remains a federal crime to grow, sell, and/or use marijuana.
Since Marijuana is still illegal at the Federal Level almost all of the big-name Insurance companies will not touch any business that has any connection with the cannabis industry.
This goes as far as canceling Landlords property coverage if they rent space used in any marijuana-related industry.
We can Insure your Cannabis and Marijuana Business
At FarmerBrown.Com we understand your needs when it comes to emerging markets. We are one of the Internet’s first online insurance agencies. We started our online presence over 20 years ago. We have grown into one of the leading online insurance in the Country. During that time we have earned thousands of 5-star revues on Google and Trustpilot. Not only that we are accredited with the Better Business Bureau and have an “A+” rating
We have partnered with a number of insurance carriers to offer comprehensive packages to cover all your Cannabis Insurance needs. These companies specialize in Cannabis-related insurance. The companies we deal with are the major players in this nascent market. They are all “A” Rated or better by A.M. Best for financial strength.
Also, most of these companies have been offering coverage since the first States legalized the sale of Marijuana. Therefore they have the experience and the types of policies your business needs.
We offer insurance coverage for the following types of operations and businesses:
Marijuana Dispensaries Insurance
CBD Retail Location Insurance
Marijuana and Hemp Growers and Cultivators Insurance
Marijuana and Hemp Crop Insurance
Cannabis processors and Manufacturers Insurance
Marijuana and Cannabis Security Company Insurance
Cannabis Laboratories and Testing Facilities Insurance
Marijuana Transportation Insurance
Marijuana, Cannabis and CBD Products Liability Insurance
READ The Ultimate Guide to
Insurance type specifically designed for the Marijuana and Cannabis industry
We also offer the following types of insurance that all businesses need, but are specifically designed for the Marijuana and Cannabis industry. (Please note for the sake of brevity this is just a short explanation of the different types of coverage available. Our knowledgeable agents will be able to discuss with you in detail the exact coverages you need.)
Marijuana General Liability Insurance
This protects you against any injuries to third parties that are on you premises. Your landlord will more than likely require you to have this. It is also becoming increasing more common that with the promulgation of more statutes and regulations it is becoming a requirement before any license is granted. The fact is you should have this coverage whether it is required or not. It just makes good business sense to protect your assets with this type of coverage. It also covers things such as claims that come from your normal business operations, such as:
- Property damage to third parties
- Defense costs
- Personal and advertising injury
A client comes into your dispensary and trips over a box an employee left on the floor breaking his arm.
Property Insurance Cannabis and Hemp Business
This will cover the property used to operate your Cannabis/Hemp related business. You can obtain coverage for your inventory and other property such as furniture and computers used to operate your business.
Looters hit your store and destroy your location. They also steal all your inventory. You will be covered if you have property insurance for marijuana dispensaries.
Worker’s Compensation Insurance for Marijuana Business
Almost all states require a business that has employees to obtain Workers Compensation Insurance. This covers any employee that is injured while performing work-related activities. It is important to note that this is a State Statutory requirement and failure to obtain coverage may put your license at risk. In any event, failure to obtain coverage can result in large civil penalties and out of pocket expenses if an employee is injured.
An employee is moving inventory and falls down some stairs breaking his leg, you have coverage for defense costs, damage awards, medical bills, and other expenses.
Product Liability Insurance for Cannabis Business
This coverage offers protection from financial loss arising out of the legal liability incurred by an insured because of injury or damage resulting from the use of a covered product. This coverage is often overlooked by most dispensaries and growers. Product Liability Insurance for Marijuana businesses covers your product when it is sold. It is crucial to the long-term success of your business. It only takes one contaminated batch to possibly put you out of business. Just imagine the cost you would be facing if a lawsuit was filed as a result. It is not hard to imagine that the attorney’s fees and any possible judgment could put you out of business.
A batch slips through quality control and it contains fungus. Some customers consume the product and are sickened. They sue for damages from the tainted product. If you had Product Liability for your Marijuana business you would have coverage.
Marijuana Commercial Auto Insurance
Any complete Marijuana Insurance solution should include Commercial Auto Insurance. A cannabis business involved in the cultivation and distribution of marijuana needs to have a commercial auto insurance policy to protect the business in case of a fault accident that occurs as cannabis products are transported. Cannabis Business Auto Insurance provides coverage in the event of an at-fault accident, covering injuries and damages to third parties. It offers comprehensive and collision coverage (similar to your personal auto coverage). It protects against any damages to your work vehicle, regardless of fault. Commercial Auto also insures you in the event you are hit by a third party without insurance.
As a cannabis business owner, it is important for you to know that a regular commercial auto policy may not cover you and the items you are transporting. In most cases, you need a specialized Marijuana Commercial Auto Insurance policy when you are transporting cannabis, or you work with a cannabis operation. There are a small number of insurance carriers who will provide insurance for cannabis businesses which is why it is extremely important to work with an agent who specializes in the industry.
Also remember, if you are using your personal vehicle for the business there is a good chance that any claim you may have arising from your business will not be covered.
Cannabis Commercial Auto Policies also cover you if your employees use their vehicle for work (whether they own it or not). It is of the utmost importance for you to have a Marijuana Commercial Auto policy in place in order to ensure coverage.
You send an employee to Home Depot to pick up some tubing for your irrigation system. She uses her own car and is involved in an accident with property damage and bodily injury. If you have a Cannabis Commercial Auto Insurance your business will be protected even though she was using her personal auto.
How Much Does Cannabis Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small marijuana operations ranges from $89 to $192 per month based on location, size, payroll, sales, and experience. The cost of Cannabis Insurance depends on the coverage and coverage amounts selected.
The main factors influencing the price are:
Size of the Business:
The cost for a small dispensary’s cannabis general liability insurance could be just $800 a year, but a large grower could pay $2,8000 or more.
Types of Operations: A small dispensary may need general liability, worker’s compensation insurance, product liability,and property coverage. A true seed to sale operation would need all this plus professional liability, crop insurance, laboratory insurance, transport insurance plus a number of other options.
Since credit cards are not used, cannabis is a cash business. As a result of having large amounts of cash and valuable inventory, optional crime-related insurance is wanted in most cases. This type of coverage can add significant costs to your insurance premiums.
Prior claims/losses: As a general rule if you make a claim on an insurance policy, your premiums will increase. If you had prior claims for theft or loss of crops you will pay more. Cannabis Insurance is usually more expensive compared to other types of commercial insurance to begin with, losses will just make those premiums higher. Location of Business: States like California that have strict guidelines when it comes to the Cannabis industry will also cause premiums to be higher than States with less regulation.
How long does it take to obtain an insurance policy for my cannabis business?
What are standard requirements to obtain a property policy for a Cannabis business?
The requirements to get a property insurance policy for a marijuana related business are the same as any other type of business. The only difference is that since the sale of marijuana is still illegal at the federal level most of the major insurance carriers do not offer policies. Also there are specific marijuana business risks such as theft or destruction of your product. You need to make sure your policy specifically covers cannabis and related activities.
For real property you will need to know:
when the property was built
date of any updates of mechanical systems
type of construction
valuation of building
general use of the building
It is important to realize that if you insure your building and you fail to mention that you are using the building for cannabis related activities your claim can possibly be denied.
For Personal Property you will need to know:
Valuation of your inventory to be covered
Value of other property used to run the business i.e. POS systems, computers, furniture, growing systems etc. For items with a value in excess of $3,000 a description, valuation and serial number or other identifying characteristic is required for coverage.
What are the biggest hurdles to overcome in obtaining insurance?
The biggest hurdle is finding a knowledgeable agent. Cannabis Business Insurance is an emerging market. There is a good chance that your local agent has no market for this type of insurance along with little or no experience. Since the sale of cannabis is still illegal at the federal level most large insurance carriers will not touch the business. However the winds of change are blowing. More and more States are moving to legalize Marijuana and related products. As a result new insurance providers are sprouting up everyday.
What is this about needing a safe room?
Most States that have legalized either Medical or Recreational Marijuana production and sales have strict requirements about how the product must be stored. Most States use the DEA Diversion Control physical storage guidance to set forth the storage requirements. Since this is a strictly cash business you also need a secure place to store the cash the business generates as a practical matter.
In that guidance, all safes and vault doors must meet the following minimum protections:
- 30 man-minutes against Surreptitious Entry
- 10 man-minutes against Forced Entry
- 20 man-hours against Lock Manipulation
- 20 man-hours against Radiological Techniques
- It must be a safe or steel cabinet, if it weighs less than 750 pounds, is bolted or cemented to the floor or wall in such a way that it cannot be readily remove
What do I have to do to obtain an electrical inspection for my grow room?
It is important to remember that enormous amounts of electricity are needed for indoor grow rooms. From grow lights, ventilation systems and irrigation pumps all these items need electricity. These electrical demands are causes of a great number of fires due to improper installation.
There are 2 main problems with failing to get an electrical inspection for your grow room. First your license or permit to grow maybe revoked if the Municipality that issued the license finds your grow grow room was constructed without the proper permits. Secondly, if there is a fire caused by faulty electrical systems there is a good chance any claim you make to your insurance company will be denied if the there was no permit.
The most common permit requirements are as follows, however each municipality is different so you need to check with them. In most cases a thorough inspection shall be made before insulation, drywall or other materials cover any electrical wiring. If you do not have this inspection you may have to go through the expense of having the wiring exposed again.
All switches, receptacles, grow lights, all grounding conductors and other wiring in boxes shall be
spliced and pigtailed for the rough inspection. The installer shall schedule a final inspection when the
electrical work is completed prior to the wiring being utilized and the space occupied. Plants shall not
be installed in rooms until either the full final or partial final signoff with inspector approval is obtained. Do yourself a favor and hire a licensed electrician at the outset this will save you time, money and hassle in the long run.
What is Sprinkler testing?
The marijuana industry has gone through a rapid expansion,with an increase in grow & extraction facilities. But, as with any industrial process, marijuana production comes with a number of hazards. Plant cultivation operations in commercial buildings and as such generally require sprinkler systems. There are several are several other factors below that make sprinklers required:
- Growing areas exceeding 12,000 square feet;
- Need to have a sealed growing area with limited access;
- Most building codes classify cannabis production facilities as requiring sprinkler systems.
What is third party batch Testing?
Third-party certification of cannabis is when a grower or manufacturer of cannabis or cannabis related products that is not the supplement company itself (hence, the third-party) evaluates the cannabis or related product and vouches for its quality. Certification is distinct from third-party testing, as testing of the finished product is only one component of a good third-party certification program. Third-party certification also includes an audit of the manufacturing process, an evaluation of the product’s quality, and an evaluation of labeling to ensure it is accurate and compliant with regulations.
What Are The Key Benefits Of Choosing FarmerBrown.com For your Insurance Quotes
A Broader Choice
We work with over 30 A-rated insurance companies--many of which your local brokers might not have access to.
5-Star Customer Service
We pride ourselves on our knowledgeable and professional sales team, who prioritize attention to detail and are ready to take claims 24/7
We negotiate with top insurers to achieve effective insurance solutions for you.
We have experienced team members that can analyze and recommend the appropriate coverage for your Cannabis or Hemp Insurance needs. All Marijuana businesses need to be insured. Protecting your business, yourself, crops, and employees with the quality of affordable insurance coverage is key. We are here to help customize this coverage to your needs.
- Our team members are professional and knowledgeable and able to help you choose the perfect policy for your needs.
- Having a business in the Cannabis or Hemp industry requires specialized Insurance to cover your unique needs.
- Flexible agents to work on your time schedule.
- We provide easy online payment options.
- We are licensed in all 50 States and offer policies in every State that allows sales and cultivation.
- Same day service in most cases.
- “A” Rated insurance companies that pay claims quickly.
FarmerBrown.Com has the capability to provide quotes for the hard to place risks and get you insured quickly and conveniently. We have the experience to analyze and recommend the appropriate Cannabis Insurance Coverage. Call now to speak with a knowledgeable agent. Our experts can review your needs and get you the proper coverage your business deserves. They will make sure you have the coverage you need at the best price for you. Best of all, you can get a free, no-obligation quote in minutes
By selecting the best policies from the nation’s top insurance carriers FarmerBrown.Com is able to deliver coverage that represents the greatest value for you. You can obtain a CannabisInsurance quote by clicking HERE, or by calling 855 933 4816 today to find out more about the extensive insurance programs offered by FarmerBrown.Com to reduce premium cost and risk. Let the FarmerBrown.Com team make obtaining insurance coverage trouble-free. Get the coverage you need at the rates you deserve.
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