678-263-0082
CANNABIS INSURANCE
Despite widespread national approval and state-level legalization, cannabis production and sales remain illegal at the federal level. Consequently, cannabis businesses face significant limitations in accessing banking services, investor funding, credit card processing, tax benefits, and insurance.
However, change is inevitable; the projected legal cannabis sales are anticipated to soar to nearly $30 billion by 2025. There are thirty-eight states along with Washington, D.C. have sanctioned medical cannabis markets, while 19 states, along with D.C., have legalized recreational markets.
As insurance professionals, it's crucial to anticipate every possible scenario and rigorously prepare both ourselves and our clients for the evolving landscape of the cannabis industry. Trust our experts to provide the coverage you need!
WHO NEEDS CANNABIS INSURANCE
- Cannabis Growers & Cultivators
- Dispensary Owners/Operators & Retailers
- Processors & Manufacturers
- Property Owners & Managers
- Professional Servicer such as a Doctor, Nurse, Pharmacist or Consultant
- Cannibis Scientists, Researchers and Breeders
- Regulator & Compliance Officers
- Distribution and Transportation
The cannabis industry requires unique insurance tailored to their specific risks and challenges for several of the following reasons.
LEGAL & REGULATORY COMPLEXITIES
- Federal vs. State Legality: While many states have legalized cannabis for medical and/or recreational use, it remains illegal under federal law in the United States. This legal ambiguity creates unique risks that traditional insurance policies do not typically cover.
- Compliance Requirements: Cannabis businesses must adhere to stringent state regulations, including security measures, inventory tracking, and quality control standards. Failure to comply can result in significant penalties, making compliance a critical risk factor to insure against.
BUSINESS RISKS SPECIFIC TO CANNABIS CULTIVATION
- Crop Protection: Cannabis crops are susceptible to unique risks such as mold, pests, and environmental conditions. Standard crop insurance often does not cover cannabis, necessitating specialized policies.
- Theft and Vandalism: Due to the high value of cannabis plants and products, they are prime targets for theft and vandalism. Specialized insurance can provide coverage for these risks, which are more prevalent in the cannabis industry than in other agricultural sectors.
FINANCIAL CONSIDERATIONS
- High-Value Inventory: Cannabis products, from seeds to finished goods, often have high market values. Insuring this inventory requires policies that account for the higher potential losses.
- Cash-Based Operations: Many cannabis businesses operate primarily with cash due to banking restrictions related to federal illegality. This increases the risk of loss from theft, requiring tailored insurance solutions.
OPERATIONAL RISKS
- Product Liability: Cannabis products, especially edibles and concentrates, carry the risk of consumer harm. Product liability insurance tailored to the cannabis industry can help manage the financial impact of lawsuits related to adverse health effects.
- Employee Safety: Working in cannabis cultivation and processing can expose employees to unique risks, such as exposure to chemicals and heavy machinery. Workers' compensation insurance specific to these risks is crucial.
MARKET-SPECIFIC CHALLENGES
- Volatility: The cannabis market is still relatively young and can be volatile, with fluctuations in prices, supply, and demand. This unpredictability necessitates insurance products that can help businesses weather market shifts.
- Brand Protection: As the industry grows, so does the importance of brand reputation. Insurance can cover issues related to intellectual property and brand damage, which are particularly important in a market where differentiation is key.
AVAILABLE COVERAGES FOR CANNABIS INSURANCE
Commercial General Liability: Coverage for claims related to third-party injuries occurring on the premises and property damage arising from business activities.
Product Liability: Coverage for claims of bodily injury and property damage arising from products or services provided by the business.
Commercial Property & Business Personal Property Limit
Inventory Coverage: Coverage for products that are manufactured and ready for sale, as well as packaged and sealed inventory containing cannabis buds or their derivatives. This does not include harvested or growing plants.
Business Interruption Insurance: Insurance protection for income loss incurred by a business due to damage to the property caused by a covered event, resulting in a reduction or cessation of operations.
Product Recall Insurance: Insurance for situations where your product is removed from the market due to confirmed or suspected issues or tampering, resulting in or likely to result in harm.
Cannabis Site Pollution Liability: A groundbreaking product tackling substantial deficiencies in insurance coverage and safeguarding for cannabis cultivators, processors, storage facilities, and sellers.
Hired & Non-Owned Auto for Cannabis Courriers: Monoline Hired & Non-Owned Auto coverage for cannabis delivery services.
Umbrella/Excess Liability: Supplemental liability insurance for situations where claims surpass the coverage limits of an existing liability policy.
Equipment Breakdown Coverage: This coverage pertains to the expenses incurred for repairing or replacing equipment, as well as any other property affected by an equipment breakdown.
Cyber Liability Insurance: Comprehensive coverage for both first-party and third-party liabilities, accompanied by top-tier cybersecurity solutions and dedicated claims experts.
Business Auto Insurance: Insurance for harm to property and individuals resulting from the use of a business-owned or business-driven vehicle.
Workers Compensation: Insurance that covers costs such as wages and benefits associated with workplace injuries or illnesses.
Goods-in-Process Coverage: Insurance for interim goods, like cannabis buds and flowers undergoing curing after harvesting, which are not yet prepared for sale. This classification excludes existing inventory or crops.
HARD-TO-PLACE RISKS ARE ACCEPTED
New ventures
High property TIV's available
Multi-state operations including transporation
History of claims
Lapse in coverage
LOOKING FOR THE BEST INSURANCE FOR CANNABIS MARKETS?
American Eagle Insurance Agency is a premiere insurance broker that has years of experience in providing the best insurance for the cannabis industry within the states of Georgia, Alabama, South Carolina and Virginia. Tell us what you need and let us help you provide financial protection against damage, liability claims, and other unforeseen events.
