Cannabis Liability Insurance: What’s Covered? What’s Not?

Every cannabis company, regardless of size or what you do, has a cannabis general liability exposure. Without having cannabis general liability insurance in place your business can be left financially vulnerable to third-party claims.

What Cannabis Liability Insurance Covers

Cannabis General liability coverage can be a standalone policy or can be part of a Package or Business Owner’s Policy (BOP). This coverage safeguards your business’ finances and reputation in the event a customer or third party takes legal action against you or your employees.

Unfortunately, nearly anyone your business interacts with can make claims against your operations. Without the right insurance protection, these claims could cripple your cannabis business.

The following are types of claims covered by a Commercial General Liability policy:

• Bodily injury: If a third party is injured at your place of business, your policy would cover costs, including medical expenses, lost wages, and any court-awarded compensation or out-of-court settlements.
• Personal and Advertising Injury: If your business causes non physical damage to a third party through advertising tactics or other activities, your policy will cover these damages. However, coverage does not apply if your business intentionally makes a false statement knowing it will cause harm.
• Damage to Rented Premises: If your business’s actions result in damage to someone else’s property, such as the space you rent and/or lease your policy will cover costs to repair the damage.

Cannabis Product Liability is not always included when you purchase cannabis general liability insurance. Cannabis Product Liability Insurance will sometimes be issued as a separate insurance policy. This policy will provide defense for cannabis product liability lawsuits for any of the following:

• Consumption of a cannabis flower
• Consumption of a cannabis edible
• Consumption of a cannabis extract
• Use of a cannabis accessory

What Cannabis Liability Insurance Doesn’t Cover

Cannabis Liability Insurance does not cover the following types of damage:

• Workplace injuries: Commercial General Liability doesn’t cover workplace injuries to employees. Instead, you’ll need Cannabis Workers Compensation Coverage, which is legally required by most states.
• Damage to your own property: Commercial General Liability covers damages to other parties’ property, but it doesn’t cover your business’s property. Instead, you’ll need business property, cannabis crop, or cannabis finished stock coverage.
• Intentional damage: Damage done purposefully or maliciously is not covered under a Commercial General Liability policy.
• Damage to client property in your care: Commercial General Liability does not cover damage to a customer’s property while it is in your care. Stock Throughput Insurance and other property coverages can provide this type of protection.
• Damage to vehicles: This protection requires a cannabis auto insurance policy.

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Reach out to me when you’re considering cannabis business insurance. I will discuss coverage’s with you, how each coverage works and assess how it fits into your risk management needs. I will provide you with comparative cannabis business 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.​ I'm available to discuss my experience or any questions you may have.

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