CANNABIS PRODUCT LIABILITY INSURANCE
WHY YOU NEED CANNABIS PRODUCT LIABILITY INSURANCE. PRICING. SAMPLE QUOTE
WHAT IS PRODUCT LIABILITY INSURANCE FOR STORES, GROWERS, AND MANUFACTURERS
Primary Reason to Buy Cannabis Product Liability Insurance
- Dispensaries or Stores have a need to protect their business from claims or lawsuits associated with their cannabis products being sold and entering into the marketplace. Cannabis products are consumed by individuals. These individuals or customers might have a claim for negligence, defect, or failure to warn them about the use of the product. Stores and dispensaries can be held liable for how the cannabis product was sold to a consumer involving statement that were made during the sale.
- Cannabis growers and manufacturers who produce cannabis products such as flower or edibles and concentrates have a need to protect their business because of claims alleging defects, poor design, or failure to warn. There is increasing pressure on growers and manufacturers to purchase product liability because retailers are requesting they are added to the growers or manufacturers insurance policy.
How much does cannabis product liability insurance cost?
- Depends on the type of business, annual revenues, claim history, and coverage selection.
How do you buy cannabis product liability insurance for my cannabis company?
- Each insurance carrier might have their own unique application. You will want to contact an experience insurance broker who specializes in the cannabis industry to help with this process.
- The insurance carriers typically want to know about annual revenue, product being offered and sold, safe guards, prior claims, and history in the cannabis industry.
Sample Cannabis Product Liability Insurance Quote
Cannabis Product Liability Coverage Breakdown
- Each Occurrence Limit: Most insurance carriers offer a minimum of $1,000,000 per occurence. There are few companies that do offer less. This coverage represents the amount money the carrier will pay on a claim for each occurrence. This typically includes legal costs.
- Products and Completed Operations: This a term used in the insurance industry. It basically means “product liability.”
- Aggregate Limit: Most insurance carriers offer a minimum of $2,000,000 per aggregate. Think of total amount the carrier will pay for all claims.
- Product Withdrawal: This is a coverage option available from most cannabis insurance companies. This covers your cannabis business from the cost of withdrawing product from the marketplace due to a defect.
HOW TO ADD A STORE TO YOUR GROW OR MANUFACTURERS POLICY?
This is known as a vendor endorsement. Essentially, the product liability policy must have this type of request included on the policy for it to recognize vendors who sell your product. Example, a store sells flower from a particular grower. The grower’s insurance policy would have cover the store if a claim were to arise as a result of the contractual relationship.
Cannabis Product Liability Exclusions–Why are they important for me to know about them?
- Exclusions are basically saying: NO COVERAGE.
- Endorsements mean a modification to the coverage.
- You will find them on the quote, binder, and policy. The carrier wants to make sure you know they exist!
- The policy may have exclusions and endorsements separated by page. AND, the exclusions will appear in the main body of the policy. This means you have to look carefully for where they are hiding.
- Examples of Cannais Product Liability Exclusions: Prior products, Perfluoroalkyl and Polyfluoroalkyl Substances, Intoxication/Impairment while using vehicle, Employment Practices, Discriminatino, Lead, Asbestos, Damage to Your Product, Health Hazards, Pesticide, Fertilizer, Ingredients or Additives, etc….
- Known and understand about cannabis product liability insurance exclusions on your quote or policy from a professional insurance broker.