Cannabis Product Liability is a type of cannabis insurance coverage that will provide protection that's needed to pay damages for bodily injury or property damages for which you're considered legally responsible.

Providing Cannabis Product Liability Insurance for the cannabis supply chain:

Cultivation – Indoor, Greenhouse & Outdoor
Third-Party Processors & Harvesters
Infused Product Manufacturers
​Laboratories & Testing
Wholesalers & Distributors
Manufacturers of Goods and Equipment​
Dispensaries & Retail Operations
Transportation & Delivery
Landlords

Do you need Cannabis Product Liability Insurance?

Anyone in the supply chain will be at risk from a lawsuit whether or not it was known the product was defective and will be held liable. This can be a grower, manufacturer, testing lab, wholesaler, and dispensary. Cannabis Product Liability Insurance will provide protection from the event that someone gets injured as a result of your completed products that might include any of the following:

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

Cannabis Product Liability Insurance falls into two categories:

It's important to understand the difference between the two types of Cannabis Product Liability Insurance policies the industry offers – “Claims-made” and “Occurrence”.
What is an Occurrence policy?

With an “Occurrence” policy, you’re covered for alleged acts of negligence that occurred while the policy was in effect. It does not matter if the coverage is in effect at the time the claim is made. The benefit of occurrence coverage is that even if you cancel your policy at some future date, you will still have coverage for events that occurred while the policy was in effect.

An occurrence policy protects you from any incident occurring while the policy is in force. The policy then covers those incidents forever.
What is a Claims-Made policy?

With a “Claims Made” policy, the policy covers claims made against you only while the policy is in effect. The down side of this type of policy is that coverage must be continued indefinitely to assure coverage for claims filed in the future for actions that occurred in the past. Essentially, once the policy has lapsed you no longer have coverage.
A claims made policy covers you for any covered claim provided it meets two criteria:
  • You are insured when the claim is made. If you no longer need coverage, you can purchase a “tail” to protect you for the past.
  • You have continually renewed the policy from the time the incident occurred until the time the claim is made.

Cannabis Product Liability Insurance Costs

Cannabis Product Liability Insurance costs are based on a number of factors which include:

  • Territory
  • Type of Cannabis Business
  • Type of products manufactured or operations performed​
  • Business experience
  • Loss history

You can be held liable, even without knowledge of any defect in the product, from a lawsuit of someone getting sick or injured. This protection is not automatically included when you purchase Cannabis General Liability Insurance. ​

​Reach out to me when you’re considering cannabis business insurance. I will discuss with you how Cannabis Product Liability Insurance works and assess if it fits into your risk management needs. If you determine this coverage is needed I will then provide you with comparative Cannabis Product Liability 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.