When It Rains, It Pours: The Importance of a Liability Umbrella

Operating a cannabis company can be risky business. We understand that you run a tight budget and want to keep your insurance costs under control, but after reading the below we hope to shed some light on why a liability umbrella is worth the cost to protect you and your business. 

Auto Liability- If you have vehicles that are used for the business, then auto liability is a concern for you. Accidents arising out of the use of company vehicles can cause serious damage to other vehicles, property and people. Our program* has the ability to write one million dollars in auto liability which should be enough for minor accidents, but with injuries involved, one million can go fast in medical bills, lawsuits and defense costs. We also include hired and non-owned auto which can be a huge exposure if you are sending employees on errands our renting vehicles for business. 

Product Liability- Product liability can be one of the most important coverages in cannabis, especially for product and edible manufacturers. Whether it is a customer getting sick from your edible, or a child getting ahold of their parents medical cannabis, you could be looking at a potentially crippling liability claim. Our program* writes a standard one million per occurrence and two million aggregate; higher limits being available in certain situations. The aggregate means that you have two million dollars available for the policy period, but the one million per occurrence means you’re limited to one million per claim/occurrence. 

Premises Liability- Slip and falls can easily happen around your place of business. Someone could slip on the floor of the dispensary common area, or a prospective client could be injured while touring your factory. Luckily these types of claims are not frequent, but when they do happen they are usually large claims. We recommend a standard one million per occurrence and 2 million aggregate just like the product liability. 

Employers Liability- If you have staff you have employers liability. This would be an employee suing for damages for injuries, loss of income, loss of future income, punitive damages, etc. If you are partially or wholly responsible for their injury, you workers' compensation insurance will cover employers liability. Depending on your state your limit will vary. Here in California, statutory requirements are for one million dollars meaning that if you employ you are required to carry workers compensation and employers liability for one million dollars. An umbrella can cover the excess liability if the workers' compensation policy is scheduled.
Most lease contracts require one million in general/product liability and likely one million in employers liability. Even if you are not required to carry higher limits than this you should consider an umbrella policy to sit over the exposures and limits mentioned above. If you have that large claim that clearly is going to be over one million dollars your carrier is going to cut a check and walk away leaving you to defend and pay for any costs above that.  Don't let one large loss haunt and follow you for a lifetime. Purchase the right kind, AND right amount of insurance so you have enough coverage for a devastating claim. Contact us if you have any questions about umbrellas or insurance for your cannabis business. 

*"Our program" mentioned above is though our preferred program carrier. Higher or lower limits may be available depends on territory and/or customer preference. Please contact us with any questions about or program or otherwise.