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OG Cannabis Insurance Blog

The insurance game is an ever-changing environment, especially in the Cannabis Dispensary Insurance sector. There are a variety of different factors (e.g. cannabis laws and policies) that can affect the way your insurance works and how you and your business are covered.

The OG Cannabis Insurance blog keeps you up to date on cannabis insurance, laws and policies, and dispensary insurance news so you can be proactive on protecting yourself when the unexpected happens. We update our cannabis insurance blog regularly so check back soon for more posts!

Risks Associated with Selling Cannabis Products in the US

Cannabis Buds in a Glass Jar Stock

The cannabis industry has become a very popular and profitable market throughout the past few years. Growing, selling, testing, and other activities associated with cannabis have made it a lucrative and attractive business venture for various entrepreneurs. There is definite potential for growth opportunity in this industry, especially with many states having legalized marijuana. However, some serious concerns are that cannabis and CDB companies need to understand and make a contingency plan.

One of these concerns involves product liability claims. Customers who have sustained injuries or become ill due to the use of cannabis products sold to them have a good chance of being eligible to file a claim and obtain a large settlement. There has been a severe uptick in the number of product liability cases related to either a cannabis product or CBD in recent years.

The best way to make sure your business in the cannabis or CBD industry is covered is by investing in product liability insurance. Cannabis and CBD companies need to prepare for these types of potential lawsuits. At OG Cannabis Insurance, our team will discuss the needs of your particular business with you and work to develop a customized insurance policy that includes product liability insurance.

What Is Cannabis Liability Insurance?

Like any other company that produces and sells products to consumers, your cannabis or CBD business needs protection for the goods you stock. Many cannabis and CBD businesses will have general commercial liability, but this does not always suffice for the cannabis and CBD products sold to customers.

Suppose something disastrous should occur due to a customer ingesting or using one of your products. In that case, you may be held liable for the bodily injury sustained and all of the expenses associated with that injury. If an individual dies after using your product, you may also be responsible for the wrongful death.

To protect yourself and your business (your livelihood), our insurance specialists at OG Cannabis Insurance recommend investing in cannabis product liability insurance.

What Does Liability Insurance Cover in the Cannabis Industry?

Product liability insurance covers many products and gives you peace of mind knowing that one liability lawsuit will not financially ruin your business. First and foremost, you will want to cover the actual cannabis products you sell. These include:

  • Brownies
  • Drinks/energy drinks
  • CBD infused foods
  • CBD edibles
  • Dietary supplements
  • Candy
  • Extracts

This can be customized to include any other products that you sell in addition to the above list. We can also add CBD products and hemp plants if that applies to your situation. Our clients want to know how much coverage they have with their product liability insurance, so these are the details often included in the policy:

  • $1 million occurrence/$2 million aggregate limit
  • Product recall/withdrawal
  • Medical and recreational cannabis product use
  • Duty to defend
  • Retroactive date (up to 5 years)

When you invest in a comprehensive insurance plan that includes your CBD or cannabis product, you can rest assured that your business is not at risk of bankruptcy should a catastrophic event occur.

Depending on your business, you may need coverage for other types of products that are not ingestible but are related to the cannabis industry. You can also amend your cannabis insurance plan to include such cannabis-related products as:

  • Vacuum ovens
  • Vaporizers
  • Water pipes, pipes, and filters
  • Grow equipment
  • Manufacturing equipment
  • Soaps, candles, and other personal products
  • Clothing
  • Lighting

When you sell CBD products, cannabis plants, or other marijuana-related items, you need to ensure that your company is thoroughly and comprehensively covered in an injury or death resulting from the product’s use.

Legal Risks for Cannabis Businesses

Product liability insurance is designed to protect companies from both first party and third party claims related to bodily injury, damage to property, and any other potential damage associated with the use of the products you sell.

First-party claims are directly associated with accidents, injuries, and losses caused by defects, a lack of warning to consumers about hazards with the products, and labeling problems. On the other hand, third-party claims have to do with property damage, lost wages, DUIs, bodily injury, and medical bills directly caused by using a product.

Selling CBD and cannabis is a very rich and lucrative business opportunity, but the industry has a high risk. That is why a cannabis or CBD company needs to have the right protections afforded by general liability insurance and specific product liability insurance policies.

How Can Cannabis and CBD Businesses Protect Themselves from Lawsuits?

Investing in customized product liability coverage for your cannabis business is the best way to protect yourself from lawsuits. That way, you can focus on the most important aspects of your business plan, specifically customers’ satisfaction with all of their purchases of your high-quality products and keeping up with the ever-changing market.

The federal government and agencies have started to see the benefits of having cannabis and CBD products available and legalized, so it is now more critical that your company protects itself in all aspects of the business world.

Contact Our Cannabis Business Insurance Specialists

If you are a cannabis, CBD, or hemp company that needs a comprehensive insurance plan which includes solid product liability, contact the insurance specialists at OG Cannabis Insurance. Our team specializes and only works within the cannabis industry, so we understand your company’s types of issues regarding compliance issues, state regulators, federal law, and more.

At OG Cannabis Insurance, we are here to make sure that your business can continue prospering in the ever-growing cannabis and industrial hemp industry. As a general rule, you want to have more coverage than you think you need to ensure that there is no risk of a liability claim causing financial instability. Contact us at (877) 473-7979 to get a quote!

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