We understand that looking through an insurance policy is the last thing you want to do as a business owner. Heck, many insurance agents don't like to do it either. The policy language can be lengthy and overwhelming, but it is very important to understand what is in your insurance policy. Having an agent who is familiar with the cannabis industry and knows what to look for in a policy will be vital to the growth of your business and may save you from uncovered claims in the future
Many lessors for for cannabis operations are requiring tenants to have general liability and property coverage to satisfy a lease before releasing the keys to their building and/or greenhouse. Many times these greenhouses need restoration before the tenant begins their cannabis operations. What many owners who are obtaining the insurance don't understand, is that the general liability and property coverage will satisfy the lease, but may not cover the building/greenhouse properly during construction. The coverage you should have in place while the building is under construction, is a builders risk or course of construction policy.
As a follow up to our previous post about stock throughput, we have created a video to help further explain the importance of this coverage for cannabis businesses. Watch the below and contact us if you have questions about this coverage or any other risk management or insurance questions!
Self insurance doesn't sound complicated, but it can be. Most major corporations implement some form of self-insurance. Self insurance is defined as: insurance of oneself or one's interests by maintaining a fund to cover possible losses rather than by purchasing an insurance policy. This can be accomplished by holding assets as an emergency fund to cover unexpected losses. There are many reasons why most businesses do not self insure:
The vulnerability of businesses due to theft, vandalism, and burglaries in the cannabis industry is an important matter, and something business owners should invest in deterring. With the amount of high-end product on-site, and typically large amounts of cash at any given time, business owners need to take protective measures before its too late. A dispensary or a grow operation without surveillance is a perfect target. Using quality technology to deter would-be thieves is a must for business owners in the rapidly expanding cannabis industry.
We happen to insure many cannabis businesses across the country. Most rarely have an on site or contracted loss control expert. Owners often find themselves wearing many hats during the course of a given day. You answer phones, deal with product, solve problems, handle HR issues and take the garbage out from time to time... This leaves little time to read a 150 page insurance policy or 3 or 4 policies of you're like most businesses. Cannabis business owners rely on their agent or broker to help them understand the insurance jargon and most importantly the coverage and exclusions of their policies.
Fortunately lawsuits are not too common for small businesses. However, when they happen they can devastate or even force you out of business. Cannabis related companies can be more prone to lawsuits than most standard companies because they are seen as easier targets with stockpiles of cash to pay or settle claims.
If you're reading this it's likely that you are already in or are considering getting into the thriving cannabis industry. It takes a lot of money and funding to start a cannabis business. You may look at your budget and see no room for discretionary spending. It's good to be budget conscious when starting your business and once your established. However, there is one area that you should not skimp out on - Joining Industry Associations.