One way to stand out as a cannabis dispensary is to offer delivery service. It can be relatively inexpensive to offer delivery: your employee uses his own vehicle, thus negating the expense of purchasing a delivery vehicle or insurance for said vehicle.
Unfortunately, this is incorrect thinking and could lead to high costs for both you and your employee that you may not be aware of. Here is the danger and how to correct it.
But I Have / My Employee Has Insurance!
It is always a good idea when hiring a delivery driver to be sure that the employee has a clean driving record, a valid drivers license, and current insurance for that vehicle. However, be aware that your employee’s insurance is typically going to be a personal auto policy, and as such there may not be coverage for delivery.
Most personal auto policies do allow for the incidental business use of personal vehicles titled in the name of an individual. This would include errands, bank runs, etc.
However, most personal auto policies exclude coverage for livery services – that is transporting passengers or packages for a fee. This includes flower delivery, pizza delivery and yes, even package services such as cannabis delivery.
So if your employee’s personal auto policy doesn’t cover delivery service, then where is the coverage? That’s right, your business will cover it – even if you don’t have insurance!
How Do I Get My Business Covered?
If you do not have a business auto policy for your business, and you are relying on your employee’s personal auto policy to cover your business, then both you and your employee have a huge potential exposure in the event of an auto accident. Anything from a fender bender to a major accident could cost you both in out-of-pocket expenses and legal fees.
The best way to protect your business AND your employees is to purchase a business auto policy through your insurance broker or to add hired and non-owned auto coverage to your current General Liability insurance policy, if available.
If you offer delivery service, it is important that you speak to your insurance broker about this exposure. Your broker can help you determine the best way to protect your business from this potentially catastrophic exposure.
Hayes Brokers offers a comprehensive risk management analysis that can help you determine the best coverage for your business. Call today to speak to one of the most knowledgeable brokers in the cannabis insurance industry.