Selecting Coverage For Your Cannabis Auto Insurance & Delivery Program

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If you provide delivery services of finished cannabis products you will want to make certain that you have liability protection in place and coverage for physical damage for your vehicles whether you're registered through the state as a sole proprietorship, partnership, corporation, or association. Before you just purchase insurance it’s important you do your due diligence and have your insurance program designed for your company’s specific needs. But, how do you get started? The answer to that question is fairly simple - consider your answers to the following questions that will aid with the development of your insurance program.​
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  1. Do you want to have coverage in place for any physical damage that happens to vehicle(s)?
  2. Do you want to have protection in place for the cannabis products you deliver in case they are stolen?
  3. ​Do you have employees? If so you will need Workers Compensation coverage that will provide them protection in case they are injured on the job.

Cannabis Auto Insurance & Delivery Underwriting

Insurance underwriting is important for insurance companies. Cannabis delivery operations come with it’s own assortment of hazards and risks. Because of this insurance company underwriters will want to know specific details about the exact driver loss control and risk management protocols that are in place.

You should obtain motor vehicle records as part of the driver selection process for all prospective drivers. For existing drivers, motor vehicle records should be checked on an annual basis and in conjunction with any involvement in an accident. The following are general delivery driver qualifications that an underwriter will assess to make certain your delivery operation meets the eligible requirements to qualify for cannabis delivery insurance.
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  • Drivers must have a valid license and be at least 18 years of age in accordance with Federal Labor Laws.  
  • Drivers must have a minimum of 1 year of driving experience.  
  • Drivers cannot have more than 2 minor moving violations or 1 at-fault accident and 1 moving violation during the last 36 months.
  • No Major Violations within the past 5 years. Major violations include (but not limited to):
    • Major speeding (over 20MPH over the speed limit) 
    • Driving without a license or while license is suspended or revoked 
    • Reckless, careless or negligent driving 
    • Driving while ability impaired or under the influence
    • Refusing a substance test 
    • Fleeing or eluding a police officer
    • Evading responsibility after an accident – hit and run
    • Leaving the scene of an accident
    • Operating a motor vehicle without the owner’s authority (grand theft)
    • Racing or speed contest
    • Negligent homicide arising out of the use of a motor vehicle
    • Using a motor vehicle for the commission of a felony
    • Aggravated assault with a motor vehicle
    • Permitting an unlicensed person to drive

​​In addition to the above driver underwriting requirements underwriters will want to know the following details.

Operations

  1. What is the main base of operations?
  2. How many miles are typically travelled in a day?
  3. How many locations are travelled to in a day?
  4. Will you transport cannabis living plants to other businesses?
  5. Will you transport harvested, processed or finished cannabis to other businesses?
  6. Will you deliver cannabis products directly to consumers?

Safety Management

  1. Is there a formal written fleet safety program in place? 
  2. Are regular safety meetings held and documented with drivers?
  3. Do you have GPS monitoring of vehicles in place?
  4. Do you vehicles have an active alarm system?
  5. Do you have a cell phone use while driving policy in place?
  6. Do you have a formal written accident reporting & investigation program in place?
  7. Are drivers allowed to make personal stops when transporting cannabis products?
  8. Are drivers allowed to take any cannabis inventory and/or money home?
  9. Do you allow any firearms or weapons in vehicles?
  10. Do you have a lock box bolted to the vehicles?
  11. Do you allow lifts, rideshare or other livery type operations?

Drivers

  1. How often are motor vehicle reports for all drivers checked and by whom?
  2. What is your driver selection, authorization and review standards procedures?
  3. What is the normal maximum number of hours per driver per day?
  4. Is there a driver training program in place?
  5. Do you have a drug and alcohol testing procedure in place?

Vehicles

  1. Is there a vehicle inspection and maintenance program in place?
  2. Are company owned vehicles supplied and available for personal use?
  3. Are employees personal vehicles used for business purposes?
  4. Where are vehicles parked overnight?

In addition to addressing the above you should determine each driver’s ability to operate their vehicle. Your internal guidelines should include a road test during which the driver will demonstrate their ability to handle the vehicle under actual traffic conditions. 

Core Cannabis Auto Insurance & Delivery Protections Offered:

Providing Cannabis Auto & Delivery Insurance

Reach out to me when you’re considering Cannabis Delivery Insurance. I will discuss coverage with you, how each coverage works and assess how it fits into your risk management needs. I will provide you with comparative Cannabis Delivery Insurance quotes from multiple insurance carriers so you can get the best possible rate.

As an insurance broker I help cannabis businesses manage risk through insurance.​