The new year brings new opportunities in many parts of the country where cannabis has finally been legalized. Whether it was medical, recreational, or both, the ability to legally sell and obtain marijuana has many dreaming of starting new businesses.
Finding a location and product suppliers are important. Getting the proper licensing is a must. Learn all you can about the business before you get started.
And don’t forget about insurance.
Hayes Brokers has been insuring cannabis businesses since 1996, when it all began in California. In fact, we wrote the book on it. Now, we can insure cannabis operations in every state where it is legal. Here’s how we can help you.
Liability Insurance for Cannabis Businesses
If you own a retail operation such as a dispensary, you’re going to need general liability insurance. Your landlord may require it, but even if you don’t have a landlord, this coverage will protect you in many other ways.
Premises liability will protect against the odd bodily injury (slip and fall) claim made by customers and visitors. It will also protect against property damage claims by those same visitors.
This coverage works like prepaid legal. Should someone threaten to sue for bodily injury or property damage, the coverage will provide legal representation for your business. If your business is found liable, the policy will pay the claim (indemnify you) up to the policy limit.
This is the most important coverage you can purchase as a business owner.
One thing not covered under most standard Commercial General Liability policies for cannabis businesses is products liability insurance. This coverage can and should be purchased separately, so talk to your broker.
Property Insurance for Cannabis Businesses
If you own the building you will be operating from, then you will want to protect that building and your contents in the event of theft, fire, and other risks. This comes in the form of property insurance.
Property coverage will pay to repair or replace damaged portions of your building, lost or stolen contents, even lost business income if you choose to insure for that. Your mortgage or investment company may require this coverage.
If you rent or lease retail space, you will still want to insure for your tenants improvements and betterments. We know that special shelving and cabinetry isn’t cheap and will need to be replaced quickly to avoid downtime. Another improvement & betterment that can be covered: The Innovations System & Security Cameras you install. You should also insure your furnishings and even your stock so your investment isn’t wasted if there is a fire.
Auto Insurance for Cannabis Businesses
If you offer package delivery service, auto insurance is important. Whether you have one vehicle, or a fleet, the state is still going to require this coverage. If your employees use their own vehicles to make deliveries, there is still a business exposure for that risk. Hayes offers a wide range of insurance companies and coverage options for your needs.
Special note: cargo is not covered under the standard commercial auto insurance policy. Talk to your broker about insuring this coverage separately.
Bonds for Cannabis Businesses
Every state is different, but most require bonds for cannabis businesses. From license and permit bonds to utility bonds to surety bonds and letters of intent, we have access to insurance companies willing and able to bond new and current businesses.
Risk Management for Cannabis Businesses
The list above is just a small sample of what may be required to get your business started. Other recommendations include flood coverage, crime coverage, products liability and umbrella insurance limits.
Hayes Brokers offers a free, no obligation risk management analysis for your business. We can review your current insurance and recommend coverage for new businesses. Call, email or come in to our office to discuss your business insurance needs.