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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!

What You Need to Know About Cannabis Property Insurance

common-cannabis-insurance mistakes to avoid

The legal cannabis industry is growing rapidly and is projected to hit $146.4 billion by 2025. While this has been great news for cannabis businesses and the country’s economy, it’s also presented new challenges. The drug enforcement administration no longer considers hemp-derived cannabinoid (CBD) a controlled substance due to the 2018 Farm Bill provision. Cannabis business owners face various risks: fire, theft, property damage, general liability, product liability, workers’ compensation, and professional liability.

The strict federal regulations and banking restrictions imposed on the hemp industry to handle large cash add to the risk of theft and liability. These factors make it important for cannabis businesses to invest in adequate cannabis insurance. One of the most popular insurance options is cannabis property insurance. But what is it, and why do you need it?

What is Cannabis Property Insurance?

Cannabis property insurance is meant to protect all kinds of commercial property. This includes growing lights, manufacturing equipment, and processing facilities. Your cannabis business is protected from various risks, including equipment breakdown, damage caused by natural disasters, theft, and fire with property insurance.

Like standard property insurance, different brick-and-mortar marijuana businesses can benefit from cannabis property insurance. For landlords and property managers of cannabis operations, this insurance policy protects against property damage or loss. It covers the cost of repairing, replacing or rebuilding the property.

Cannabis carriers face a complicated set of risks, including theft and robbery while in transit. And because personal auto-insurance doesn’t provide coverage for business use, you could be held liable for injuries, cost of medical treatment, and damage to vehicles. A product liability coverage can help protect you against the loss of your product once you leave the premises.

One of the most significant types of property damage cannabis growers face is moisture intrusion in the ceilings, water condensation on surfaces, and leaking plant pots. If left unattended, the moisture buildup can lead to mold.

Another form of property damage that indoor and outdoor growers face is damage to plumbing utilities. The drainage system often backs up when employees repeatedly flush plant and soil debris down the toilet. Insect infestations, fertilizers, and insecticides also contribute to the damage.

Fire due to overloaded transformers, exploding grow lights, and other damages are a major concern to processing facilities, cannabis dispensaries, and other marijuana businesses. If a fire does occur, it will damage any plants, equipment, and inventory on-site. It could also destroy business records.

Why Do I Need Cannabis Insurance?

Despite the cannabis industry offering relatively safe products, investors still have to contend with certain risks. The good news is that insurance carriers can help protect your cannabis operations with comprehensive property coverage that includes crop insurance, casualty insurance, general liability insurance, and more. This means the cannabis insurance cover can protect against loss due to;

  • Natural disaster: When your medical marijuana dispensary lies in the path of a hurricane or a tornado, an insurance policy can help pay for debris removal, rebuilding, and replacement of equipment and cannabis products.
  • Breaking: If someone breaks into your business premises and steals equipment, medical or recreational marijuana products, or confidential records, cannabis insurance can help cover the losses.
  • Bodily injury liability: If someone gets injured on your business premises and sues you, the insurance provider can cover the legal expenses along with any settlement you’re required to pay, like medical bills and workers’ compensation.
  • Lawsuits: Insurance companies can help cover the cost of claims filed against you by customers and workers.

Your business is of utmost importance to you, and insuring it can protect your investment if things go wrong such as fires, storms, vandalism, and theft. Schedule an appointment with a cannabis insurance company as soon as possible to get property coverage that suits your needs.

How Do I Insure My Cannabis Property?

With more states making marijuana and hemp legal, businesses in the cannabis industry need to find property coverage options that protect them from loss. Thanks to legislatures like the Hemp Farming Act of 2018, the insurance industry is insuring more cannabis businesses.

Several factors can influence the type of coverage you need. For instance, marijuana dispensaries may need a property policy that covers the risk of fire, robbery, vandalism, and general liability. A grow operation or farm business may need a policy that protects against the risk of moisture damage, destructive weather, insect damage, droughts, floods, and crop disease.

When exploring insurance options, ensure the insurance company knows whether you own or rent;

  • Farmland for growing marijuana or hemp
  • Storage facilities for storing products and cash
  • Retail space for selling marijuana products
  • Indoor commercial facilities for growing and processing cannabis

The type of insurance policy insurers offer your business may depend on whether you own or lease the property. If you own the property, a more comprehensive that covers the risk of property damage and destruction, liability, cost, or rebuilding structures, business records, and office equipment is paramount.

That said, the following factors will influence the cost of insuring your cannabis-related business and the maximum limits of claims.

  • Location: Buildings in towns or cities with adequate fire protection are cheaper to insure than those in areas with limited fire protection.
  • Construction: Insurers will charge higher premiums for buildings made of potentially combustible materials.
  • Theft and fire protection: Do you have a security system? Does the building have a fire alarm and sprinkler system? How far is the building from the nearest fire hydrant?
  • Occupancy: How the building is used and the number of workers may affect the cost of insurance.

Want to Protect Your Cannabis Businesses? Contact Our Cannabis Property Insurance Experts

Whether growing, extracting, or selling cannabis products, protecting your investment is of the utmost importance. Having the right property insurance coverage can significantly reduce the risk of robbery, fire, and other risks. At OG Cannabis Insurance, we understand the complexity of the cannabis industry and know that each business is unique. We strive to provide tailored and comprehensive insurance policies that protect cannabis businesses from minor and major losses. Contact us today at (877) 473-7979 to learn more about our cannabis insurance policies and get a free quote.

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