Why do I need general liability insurance?
Do you produce a physical product that your customers use? Do you have an office space where customers or vendors occasionally stop by? Perhaps your company has a blog or uses other social media. Or maybe you visit your clients at their offices.
All of these cases (any too many others to list) expose your business to liability from third parties. That is, the risk of you or your company being held accountable when your business activities are alleged to have caused harm to another. Cannabis and agtech companies protect themselves from these risks with general liability (GL) insurance.
If you lease office space or are party to any number of other commercial contracts, you’ve likely already heard of this policy. The counterparties to your contracts want to be sure that you’re backed by a general liability insurance carrier in the event of a dispute between you and them.
It’s clear that GL exposure is substantial for nearly every type of company. If you can think of a situation where your business or employees would be directly or indirectly responsible for the safety of others or the property of others, you’re exposed!
What is it?
In short, general liability insurance protects your cannabis company from some basic risks that are part of running a business. These include:
- ‘Slip and fall’ claims: a customer visits your coworking space and trips on a power cord. She hits her head on the way down and is out of work during an extended hospital stay.
- Property damage: your stop by your client’s new space with pastries and coffee. On your way through the office, you accidentally spill your officewarming gifts onto some high-end computers and monitors, not to mention the brand new carpet.
- Products liability: your hydroponic supply company has sold 1,000 water pumps. Suddenly reports come in that a manufacturing defect is causing the pumps to overheat and malfunction. Customers have lost significant portions of their stock. In a few cases, the pumps ignited a fire which caused substantial property damage. You’re sure that, since the pumps were manufactured in China by a Chinese company, you’re off the hook. Your lawyer disagrees (and is probably right).
- Damage to rented space: you close down the office for a holiday weekend without realizing you left a space heater on. It’s not the best heater: a fire starts and destroys most of the office. Your landlord sues for the damages.
- Personal injury: while talking with a customer, you make a regrettable comment your competitor that you wish you could take back. Unfortunately the competitor finds out about the insult, considers your comments to be defamatory and calls his lawyer.
- Advertising injury: in a massive social media marketing campaign, you use a catchy tag line to get people’s attention. It works! But unfortunately you accidentally plagiarized another company’s content and they take issue.
GL protects you from a wide range of risks by paying legal defense expenses and the cost of restitution as determined by judgment, settlement or arbitration. These costs can include court-awarded damages, settlements, and medical costs.
At AlphaRoot, we can tailor the policy to include or exclude exposures depending on your specific company’s unique risks and budgetary requirements. For example, the policy can include coverage for personal injury resulting from a blog post (important for most companies that produce content or are active in social media) and exclude coverage for property damage from the use of fireworks (probably not quite as important).
How do I protect my company and myself?
Talk to us! You can contact us at firstname.lastname@example.org to get started on a quote for a general liability insurance policy.
Want to read more on the subject? Check out our blog posts on general liability insurance.
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