Does Your Cannabis Insurance Policy Give You Proper Coverage?
When a lot of people go shopping for insurance, they like to hone in on the price tag, and often time’s buyers will be blinded by the cost. While we understand that it is important objective to save money, most of the time the cheapest insurance is also the least inclusive and least protective. It is vital when shopping for insurance to understand that proper coverage should be on the forefront of your buying criteria. After all, the whole point of insurance is to be protected in the best way possible, and when it comes to buying, protection trumps price. Of course you should still be looking for affordable policies, and the most expensive is not necessarily the best! In this article we are going to focus on why this is so important and advise you on factors to consider when obtaining proper coverage for your cannabis business!
1. Read the Fine Print
Insurance policies can be overwhelming. There is a lot of information that is thrown at you and it can be difficult to retain all of the fine print that is attached. However, the fine print is the most important area of your policy to understand. It is in the fine print where the insurance company will list all of the exclusions on your policy. It is really important to pay extra attention to the exclusions because they can be pretty unfavorable and quite frankly, they won’t make any sense at all. Let us explain.
You own a cannabis business and you would like to obtain Cannabis Product Liability Insurance. You go shopping for a policy and you find one that has a lower price than the rest and so you are sold on it. However, when you read the fine print you find that exclusions include “the consumer becoming sick” and “the consumer involved in an accident after ingesting your product”. Both of those exclusions are important and are actually something you would need coverage for! It does not make any sense for a Cannabis Product Liability Insurance policy to exclude these big points, in fact, the consumer becoming sick or being involved in an accident is exactly what you need protection from. If you had not read the fine print on the policy, you would have gotten insurance without the proper coverage you desired.
Exclusions that make the insurance essentially void are more common than you would like to think. That is why it is extremely important to read the fine print with and insurance specialist and to check the exclusions on the policy. Now you can see why that one policy is so cheap, it is because it fails to protect you! When it comes to insurance it is all about protection.
2. Insurance Is For Protection, Not Just Licensing
If you are in the process of obtaining a license for your cannabis business, then you are aware that having insurance for your cannabis business is one of the main requirements. A lot of the time we find that people looking to get their licenses are trying to get insurance for the sole purpose of satisfying the state requirement. This is a big mistake. We have said it before and we will say it again. Insurance is for protection. Insurance is for the protection of your business and yourself, so you should get a policy that offers adequate coverage in order to do so. With so many people in a hurry to get their licenses approved, they often skip getting the proper insurance just so they can move along the process faster. Take the time and slow down for this step. It is important.
After all, when you do obtain your cannabis business license and you are up and running you are going to want comprehensive insurance that protects the business. Take the time to look at the bigger picture. If your business runs into a legal issue and you didn’t take the time to get insurance that properly covers you, you will regret it and reap the consequences later. You wouldn’t skimp on a business decision, so don’t skimp on insurance. Better safe than sorry!
3. Meeting State Requirements Is Not the Only Protection You Need
Each state has legal minimum insurance requirements. Though the requirements can vary from state to state, as a whole the requirements tend to be very similar. There are requirements for all sorts of insurances, from business liability to auto; states have lists of coverages that are mandatory. So of course, it should come as no shock that there are state insurance requirements for cannabis businesses as well.
However, what most people don’t know is that the state requirements for insurance are not the only coverages needed for a successful business to be protected. It is important when shopping for insurance to look for policies that have more coverage than only what is required by the state. The state requirements are not all that you need to be protected, as the state only requires the basics, and as a business in the cannabis industry you need insurance that is comprehensive and inclusive of all sorts of scenarios.
The state of California only requires General Liability insurance. However, as a cultivator or manufacturer it is important to have Product Liability Insurance as well because most of the time a claim will result from consumers getting sick or reacting to the products that were grown by the cultivator or manufacturer. The name on the label owns the exposure. Often times claims don’t come up right away as things like cancer or lung problems, and other serious illnesses take years to discover. The state requirements in some states mandate product liability, however, others do not; yet that is where the true exposure or risk of a claim will result from. When you think of insurance; you should think to protect your business not just meet the state requirements!
Understanding Cannabis Insurance
Insurance is a tricky topic to navigate and understand. Especially when it comes to Cannabis Insurance, it can be difficult to understand what you need to actually be protected. That is why it is so important to have an agency that takes care of you and has you and your business’s best interests at heart. At The Cannabis Coverage Company, our highly knowledgeable agents are able to help you sort through your needs and pair you with a policy that doesn’t have pesky exclusions or unnecessary coverages. For more information on cannabis insurance call us today!