Download our coverage overview for brand and IP only cannabis companies here
While cannabis products need to be tracked from seed-to-sale, require video surveillance, and operate under a long list of other rules and regulations, cannabis-related products and services that “don’t touch the plant” operate without these restrictions. A popular cannabis-adjacent area for entrepreneurs is creating physical and digital ways to connect customers with cannabis producers within the restrictive framework of the industry.
In cannabis, a dispensary could have many different brands of products, including their strains. The consumers’ needs might include other products than what your greenhouse is producing.
Risks for Cannabis and CBD Brands
Due to CBD and THC’s complexity, the liability of consumption on the dispensary is very different from other businesses. Even though the product was not produced in your presence, your business’s risk is the same.
Employees’ accountability while they are at work, has risks and concerns in every business. Covering their worker needs and employment practices could harm your dispensary if you do not have the insurance to cover the human element of having employees daily.
Protecting Your Building and Brand:
The bubble of your brand when you have a retail space starts at the sidewalk of your location. Protecting the retails space, brand, and products help guarantee your business’s health for years to come. Ensuring your business from the exterior to the interior is a great way to manage the cannabis industry’s liability.
KEY INSURANCE POLICIES
Premises General Liability (office exposure)
Premises General Liability is a third party liability coverage that is intended to protect a company for incidents that occur on their property. For a company that focuses solely on the branding, this coverage would center around the office they are in.
Product Liability (viewed as manufacturer)
Product liability, like general liability, is a third party liability coverage. The difference stems from the covered incidents. Product liability coverage is specifically created to provide coverage for bodily injury due to the use of your product. For a brand, even though you are technically not part of the
production process, you would likely be tied into a lawsuit should someone get hurt or sick and you would want this coverage in place.
Property Coverage (BPP)
Property coverage is a first party insurance policy that is intended to make a company whole again should they experience a covered loss. For a brand this policy would look to cover your business personal property that is located in your office (i.e. desks, computers, furniture, etc.)
Property Coverage (Equipment and Buildings) Property coverage is another first party insurance policy that is intended to make a company whole again should they experience a covered loss. For a grow op, this policy would look to cover the equipment and buildings that are used throughout the growing process.
Workers Comp (Employees)
Workers’ Compensation and Employers Liability (a portion of the WC cover) are both intended to cover injuries that employees sustain during the course of their work and are typically required by state law.
Directors & Officers
Directors & Officers insurance or D&O insurance as it’s commonly referred to as is intended to cover the directors and officers from investor lawsuits involving mismanagement of company funds, misrepresentation, For any company who has taken outside investment, this coverage is important and in many cases required by your board of directors.
Employment Practices Liability (EPL)
Employment Practices Liability or EPL insurance is a labor law coverage which responds to claims arising from invasion of privacy, wrongful termination, sexual harassment, etc. In the current legal landscape we recommend it as a standard coverage for companies with any number of employees.
AlphaRoot is a full-service insurance brokerage completely dedicated to strengthening and supporting the cannabis industry. If you’d like to learn about building a risk management program for your company, reach out to us at firstname.lastname@example.org