(800) 869-8643

admin@hayesbrokers.com

MMJ Products Liability

MMJ Products Liability

As more states begin to pass legislation legalizing cannabis for medical and/or recreational use, the writing seems to be on the wall: cannabis is going to be big business in the coming years. More consumers using these products means more litigious exposure for business owners. Because the cannabis industry is in the business of producing consumable products and devices for consumption, they have huge products liability exposure.  In fact, the first cannabis industry products liability class-action suit was filed in Colorado in October 2015.  It won’t be the last. As an industry that makes or distributes products to consumers, it is imperative that your business have products liability insurance. What Is Products Liability Insurance? Products liability insurance is often referred to as products and completed operations insurance. It is sometimes, but not always, included in a General Liability or Business Owners Package policy.  However, this coverage is usually excluded for cannabis operations. The Insurance Services Office (ISO) defines a products and completed operations hazard as “‘bodily injury’ or ‘property damage’ occurring away from premises you own or rent and arising out of ‘your product’ or ‘your work’…” (CG0001 Page 15). While this is a standard definition, it may vary slightly by insurance company and policy. It is important to note that products liability covers not only a physical product, but also work product such as building and installation.  This coverage is triggered by bodily injury (including death) or property damage.  However, products liability insurance does NOT cover product recall. Do You Have Products Liability Insurance? The best way to determine if you have products liability coverage is to review...