If you are considering operating a cannabis growing operation or a dispensary, you will need cannabis insurance. The question is what type of cannabis insurance in San Diego, CA, will you need? Here is a primer on your options.
General Liability: This is insurance to protect your entire business from any property damage or personal injury that is associated with your business operations.
Product Liability: This type of cannabis insurance covers the same in regards to the products you grow or sell. It covers any sickness or disease that exposure or consumption to the products you make cause.
Property: With this, cannabis insurance companies cover the capital and tangible assets of your organization.
Professional Liability: With this type of liability, your business is covered if you fail to provide professional services for which you are contracted.
Crop: This covers a crop being destroyed if the event that caused the loss is covered. It is important to make sure that any type of crop damage is included in your policy, including theft.
Also, workman compensation and business auto insurance are available as are customized products that cover expenses in excess to coverage limits.
Challenges to Insurance
Some companies are still hesitant to insure a cannabis grower or dispenser, even with state sanction. Others are extremely cautious about insuring any operations that make or fill cartridges intended for use in a vaporizer. The reason for both is two-fold:
- The insurer is concerned that laws can change, leaving a cannabis operation open to huge lawsuits and thus the insurance company open to large payouts or very lengthy legal processes and high legal costs.
- The insurer is worried about product use, given that a vaporizer can be used by anyone who possesses it, even those who might use the product to perform illegal activities.
If either situation applies to you, it is important that you find a broker that can provide you with the coverage you need. Deciding to engage in the product or services affected without insurance runs a major risk to your entire operation.
Whether growing or dispensing, it is critical that you structure your business to maintain tax compliance. Depending on how you structure your business for this purpose, your insurance policy options will vary. That is why working with someone experienced in the industry is vital to maximizing all policy, coverage and profitability options.
Cannabis insurance in San Diego CA, is a relatively new product that will continue to evolve as cannabis consumption becomes more mainstream.