Running a cannabis business has become most people’s business idea today, considering cannabis is far much legalized. The business also plays a key factor, especially in medical uses, as explained by Ieuter Insurance Group. However, while cannabis businesses are legalized in most states, they come with insurance considerations to keep in mind for different businesses. You can get more help at Homegrown Cannabis Co. So, let’s take a look at the critical insurance considerations to embrace, shall we?
Cannabis Businesses Insurance Policies and Their Key Considerations
Generally, your cannabis business demands insurance policies such as workers’ compensation, product, general liability policies, and commercial property insurance policies.
Commercial Property Insurance Policy
This policy covers your business in the event of natural calamities such as fire and theft. It also includes the business building, equipment, personal items, and inventory used in the business. Moreover, it’s a priority policy, especially for companies protecting expensive equipment considering mitigation of losses in income. When determining the amount to pay for commercial property insurance, several key considerations to keep in mind include:
Business Location –
The location of your cannabis business will always play a vital role in the cost of your commercial property insurance policy. However, suppose your cannabis business premise is located within cities and towns with dependable fire and theft security. In that case, your commercial policy will cost less than those far from major towns and cities.
The Construction Cost of Your Business –
depending on your business’s construction cost, you’ll pay less or more. Primarily, businesses constructed with combustible materials pay premium commercial policy charges than those designed with typical materials. Your business’s internal structural components also affect its fire ratings, thus affecting your commercial policy charges. Mainly, internal structural components to consider to reduce charges are wood partitions, floors, and stairways.
Your Business’s Use and Occupancy–
the usage and occupancy of your cannabis business property also determine the charges you’ll pay for a commercial insurance policy. For example, premises with tenants with unpredictable behaviors and characteristics cost more than those with professional and well-behaved tenants. Likewise, the number of occupants in your cannabis building determines your commercial policy fees; the more people, and the more the charges.
The Premises’ Fire and Theft Protection –
how sufficient your cannabis business is protected from theft and fire is also a key consideration when estimating your commercial insurance charges. For example, premises with excellently installed fire alarms and sprinkler systems and dependable security systems in case of theft and fire like those near fire hydrant and fire stations pay less.
General Liability Insurance Cover
Cannabis business’s general liability coverage protects your business and assets from claims involving different situations not limited to bodily injuries, property damages, product liabilities, operational costs, and legal expenses. The cover is also a key consideration, especially when leasing commercial premises or contracting cannabis business third parties. However, before deciding to settle for cannabis business general liability coverage, some of the critical considerations to consider for the policy include:
Health Hazardousness –
According to the Centers for Disease Control and Prevention, you as a cannabis business owner should be aware that as of January 2020 only, the number of vaping-related infections shoots to over 26000 in the U.S alone, which raised eyebrows as to why cannabis businesses need liability insurance policies more than ever. In addition, regulating authorities demand cannabis entrepreneurs understand exclusions in the industry. Cannabis exclusions are the business-related covers that can or cannot be sold to cannabis businesses. As such, before deciding to settle for general liability coverage, consider your business’s health hazards, such as forms of adverse health effects resulting from E-cigars and vaporizers.
Product Liability Policy
Product liability coverage deals with offering your cannabis business an assurance you’re protected and not found liable if customers become ill or suffer product’s side effects after doing business with you. However, Product liability coverage can be challenging, especially considering cannabis businesses are different, such as manufacturers, growers, and dispensaries.
To comprehensively understand the key considerations a specific business follows, consult with insurance brokers. However, for you to benefit from your cannabis business’s product liability coverage, the general key considerations include the number of products you sell and distribute, the intended use of your products, and who are the users of your products.
Additionally, consider such things as the lifespan of your products after disposal and the means of packaging. Once you’ve put these factors into consideration, your insurer will use them to determine the charges for your cover and the period of the policy.
When it comes to cannabis business-coverage, policies vary based on the nature of your business, daily operations, and its unique demands. In today’s ever-evolving legal requirements, your cannabis business is safe under the above and more insurance policies. However, before settling for any insurance coverage, be sure to understand all the critical considerations as above comprehensively.