Cannabis Insurance
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Cannabis Insurance Programs
We have partnered with some of the most specialized cannabis insurance companies in the country to help craft policies that are tailored to properly protect businesses in the cannabis industry.
With medical marijuana just entering Missouri, POWERS Insurance has proudly partnered with Missouri Medical Cannabis Trade Association (MoCann) for its first convention in St. Louis. As an emerging risk in the state, we are ready to assist with offering our risk management strategies to these business owners -- most of whom will experience rapid changes in their business over the next few years.
Below are our recommendations for a cannabis business to consider. Because marijuana is still federally illegal, many mass market carriers are avoiding offering coverage. In today's environment, a cannabis business most likely won't find all of these coverage options available with one insurance company. This is why it's important to work with a risk advisor who utilizes multiple carriers and actually understands the industry (so they can properly insure it for you). Not all of these coverages' may be necessary (especially as you launch your operation), which is why we recommend you consult with a risk advisor who can help you navigate different levels of insurance as your business scales.
View Cannabis Coverage Resources & Recommended Coverages
Recommended Insurance for Marijuana Dispensaries
Strongly Recommended
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business or as a result of business operations. For a dispensary operation, we recommend securing a minimum of $1,000,000 limit per occurrence (up $2,000,000 total for the policy) while the dispensary is in start-up mode. Once established, we recommend adding a significant umbrella policy over the general liability policy while also increasing the basic GL limits.
Although you may rent your location, your dispensary is filled with business personal property and merchandise that needs to be covered. The total amount of cannabis product in your store will be a driving factor in your premium. Also included under business personal property would be equipment that goes in your store (computers, tables, chairs, display cases, etc.), basically if you picked up your dispensary building and shook it ... everything that could fall out is business personal property.
A commercial crime policy is a must for a dispensary operation, and it's important to have an understanding that this policy will need to be updated as your company grows. A crime policy will typically provide coverage for a range of different types of crime (typically) including coverage for employee dishonesty, money and securities fraud, forgery, funds transfer fraud and even extortion coverage.
Medical Payments coverage should be at a $5,000 limit. This highly liquid coverage encompasses medical payments if a guest is injured on your property regardless of fault. It is considered a "good faith" payment to help you avoid litigation.
Please note this does not mean that all medical payments must be under this dollar amount. The general liability coverage would respond if an injury exceeds these limits.
If you own the building for your dispensary, you need to protect it with insurance. This coverage will be similar to how your home is insured and the premium is based on the value of the building, type of construction, year built, roof type, and several other factors.
Proper cyber liability insurance coverage in place is paramount given the volume of transactions your dispensary will be processing in a day, as well as the amount of personally identifiable information your dispensary will handle. Your policy limit should be well above $1 million to even begin properly covering yourself. Anything less would be insufficient.
Although it may not sound like an important piece of coverage, building ordinance or law can be a critical component during a significant claim.
This coverage comes into play when an ordinance or law regulates improvements with the construction of a damaged building. Oftentimes, an older building will require upgrades during the repair process to meet newer building codes.
In addition, this coverage can come into play when a building is significantly damaged, but still partially standing. It's typical for communities to have a building ordinance that requires a structure damaged by 50% or more be demolished and rebuilt in accordance with current building codes rather than simply repaired. The demolition and additional expenses to match new building codes may not be covered without this endorsement.
Workers compensation provides protection for any of your employees, should they get hurt while on duty for your company. Workers compensation will pay for the employees' medical expenses, plus a portion of their lost wages if they miss work for an extended period of time.
Worth Considering
Directors and Officers (D&O) coverage will become a more important element of coverage as your dispensary grows in sales. This coverage will provide protection to the officer of the company if they are personally sued for the decisions they make running the business.
EPLI provides coverage for claims of wrongful acts during the employment process. Most importantly, EPLI provides defense costs (within the limits) for claims of wrongful acts. Typical examples of claims that might be leveraged against a dispensary include:
-- Discrimination
-- Wrongful termination
-- Sexual harassment
-- Bullying
-- Defamation
-- Invasion of Privacy
-- Retaliation
Recommended Policies for Cultivation/Growing Operations
Strongly Recommended
Crop insurance or living plant coverage is insurance that provides coverage if your cannabis crops are damaged or destroyed. For a cultivation operation, this is the most important coverage you'll want to secure. Cannabis plants are extremely valuable and will be the the primary source of your revenue so make sure you are protecting it!
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business, or as a result of business operations. General liability is typically the first line of protection when a lawsuit if filed against your company.
This provides coverage when a cannabis product your company has distributed needs to be recalled from market. Both voluntary recalls and recalls required by regulators should be covered with the proper policy. The coverage affords with the expenses associated from recalling the product, plus brand reputation and restoration coverage.
Workers compensation provides protection for any of your employees, should they get hurt while on duty for your company. Workers compensation will pay for the employees' medical expenses, plus a portion of their lost wages if they miss work for an extended period of time.
A commercial crime policy is a must for a cultivation/growing operation, and it's important to have an understanding that this policy will need to be updated as your company grows. A crime policy will typically provide coverage for a range of different types of crime. This policy will typically provide coverage for employee dishonesty, money and securities fraud, forgery, funds transfer fraud and even extortion coverage.
While this won't be a major factor, your growing operation still has lots of business personal property that needs to be covered. Business Personal Property includes furniture, computers, workstations, etc. Basically, if you picked up your building and shook it ... everything that could fall out is business personal property.
If you own the building for your cultivation operation, you of course need to cover it with insurance. This coverage will be similar to how your home is insured and the premium is based on the value of the building, type of construction, year built, roof type, and several other factors.
Medical Payments coverage should be around a $5,000 limit. This provides coverage for medical payments if a guest is injured on your property, and is a highly liquid coverage, regardless of fault. It is considered a "good faith" payment to help you avoid litigation.
Please note this does not mean that all medical payments must be under this dollar amount. The general liability coverage would respond if an injury exceeds these limits.
Although it may not sound like an important piece of coverage, building ordinance or law can be a critical component during a significant claim.
This coverage comes into play when an ordinance or law regulates improvements with the construction of a damaged building. Oftentimes, an older building will require upgrades during the repair process to meet newer building codes.
In addition, this coverage can come into play when a building is significantly damaged, but still partially standing. It's typical for communities to have a building ordinance that requires a structure damaged by 50% or more be demolished and rebuilt in accordance with current building codes rather than simply repaired. The demolition and additional expenses to match new building codes may not be covered without this endorsement.
Worth Considering
Directors and Officers (D&O) coverage will become a more important element of coverage as your operation grows in sales. This coverage will provide protection to the officer of the company if they are personally sued for the decisions they make running the business.
EPLI provides coverage for claims of wrongful acts during the employment process. Most importantly, EPLI provides defense costs (within the limits) for claims of wrongful acts. Typical examples of claims that might be leveraged against a growing operation include:
-- Discrimination
-- Wrongful termination
-- Sexual harassment
-- Bullying
-- Defamation
-- Invasion of Privacy
-- Retaliation
Although the amount of personally identifiable information your cultivation operation will handle is pretty limited, it's still a good idea to have a proper cyber liability insurance coverage in place.
Recommended Policies for Extraction & Testing Operations
Strongly Recommended
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business. For an extraction or testing operation, we recommend securing a minimum of $1,000,000 limit per occurrence (up $2,000,000 total for the policy) while the dispensary is in start-up mode.
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business, or as a result of business operations. General liability is typically the first line of protection when a lawsuit if filed against your company.
A commercial crime policy is a must for an extraction or testing operation, and it's important to have an understanding that this policy will need to be updated as your company grows. A crime policy will typically provide coverage for a range of different types of crime. This policy will typically provide coverage for employee dishonesty, money and securities fraud, forgery, funds transfer fraud and even extortion coverage.
Workers compensation provides protection for any of your employees, should they get hurt while on duty for your company. Workers compensation will pay for the employees' medical expenses, plus a portion of their lost wages if they miss work for an extended period of time.
Medical Payments coverage should be around a $5,000 limit. This provides coverage for medical payments if a guest is injured on your property, and is a highly liquid coverage, regardless of fault. It is considered a "good faith" payment to help you avoid litigation.
Please note this does not mean that all medical payments must be under this dollar amount. The general liability coverage would respond if an injury exceeds these limits.
Although you may rent your location, your extraction and testing operation is filled with business personal property and machinery that needs to be covered. Also included under business personal property would be the other stuff that goes in your store (computers, tables, chairs, display cases, etc.). Basically, if you picked up your dispensary building and shook it ... everything that could fall out is business personal property.
If you own the building for your lab, you of course need to cover it with insurance. This coverage will be similar to how your home is insured and the premium is based on the value of the building, type of construction, year built, roof type, and several other factors.
Given the proprietary nature of data your extraction business will be collecting, having proper cyber liability insurance coverage in place is paramount. Your policy limit should be well above $1,000,000 to even begin properly covering yourself.
Please, do not buy a policy that gives you only $25,000 in coverage!
Although it may not sound like an important piece of coverage, building ordinance or law can be a critical component during a significant claim.
This coverage comes into play when an ordinance or law regulates improvements with the construction of a damaged building. Oftentimes, an older building will require upgrades during the repair process to meet newer building codes.
In addition, this coverage can come into play when a building is significantly damaged, but still partially standing. It's typical for communities to have a building ordinance that requires a structure damaged by 50% or more be demolished and rebuilt in accordance with current building codes rather than simply repaired. The demolition and additional expenses to match new building codes may not be covered without this endorsement.
Worth Considering
Directors and Officers (D&O) coverage will become a more important element of coverage as your testing operation grows. This coverage will provide protection to the officer of the company if they are personally sued for the decisions they make running the business.
EPLI provides coverage for claims of wrongful acts during the employment process. Most importantly, EPLI provides defense costs (within the limits) for claims of wrongful acts. Typical examples of claims that might be leveraged against a testing operation include:
-- Discrimination
-- Wrongful termination
-- Sexual harassment
-- Bullying
-- Defamation
-- Invasion of Privacy
-- Retaliation
Recommended Policies for Cannabis Distribution
Strongly Recommended
This insurance provides coverage of cannabis product while it is in your distribution operation's possession even though you don't own the product.
This is the most important policy your company will purchase and can vary dramatically from one insurance company to the next. It's important to work with a risk manager who understands the exclusions and how they will impact your distribution operation.
(For example, some policies will exclude transportation of raw cannabis product. If your distribution company typically delivers manufactured cannabis but occasionally will take a delivery job with raw cannabis ... you might be completely uncovered for all the product in your van or truck.
A commercial auto policy will provide coverage for your distribution vehicles and trailers. It will not provide coverage for the contents inside your vehicle!
For a cannabis distribution operation that is likely growing, we strongly recommend attempting to secure an auto policy with "Symbol 1" coverage. This may not be possible for a beginning operation, but is worth the extra premium dollars. The biggest benefit of this form is that it provides coverage liability coverage for ANY auto your business owns during the policy term ... whether you remembered to report it to your insurance agent at the time of purchase or not.
Most policies provide only coverage for the known autos on a policy, and some carriers will allow up to 30 days to notify the carrier whenever they change vehicles in their fleet. For a fast-growing distribution operation, that becomes a lot of management and one mistake could mean an uncovered vehicle.
Note: The symbol 1 coverage only extends liability coverage (damage to others) ... it would not provide comprehensive coverage so your company potentially could still be out the entire cost of the vehicle if you don't notify your agent quickly. But, at least this coverage limits your potential loss.
A commercial crime policy is a must for a distribution operation, and it's important to have an understanding that this policy will need to be updated as your company grows. A crime policy will typically provide coverage for a range of different types of crime. This policy will typically provide coverage for employee dishonesty, money and securities fraud, forgery, funds transfer fraud and even extortion coverage.
Workers compensation provides protection for any of your employees, should they get hurt while on duty for your company. Workers compensation will pay for the employees' medical expenses, plus a portion of their lost wages if they miss work for an extended period of time.
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business or as a result of business operations. For a distribution operation, we recommend securing a minimum of $1,000,000 limit per occurrence (up $2,000,000 total for the policy) while the business is in start-up mode.
This is basic liability coverage for your business that will provide protection if someone (other than an employee) gets hurt while at your business, or as a result of business operations. General liability is typically the first line of protection when a lawsuit if filed against your company.
Medical Payments coverage should be around a $5,000 limit. This provides coverage for medical payments if a guest is injured on your property, and is a highly liquid coverage, regardless of fault. It is considered a "good faith" payment to help you avoid litigation.
Please note this does not mean that all medical payments must be under this dollar amount. The general liability coverage would respond if an injury exceeds these limits.
Although you may rent your location, your distribution center is filled with business personal property and machinery that needs to be covered. Basically, if you picked up your building and shook it ... everything that could fall out is business personal property.
If you own the building for your distribution operation, you of course need to cover it with insurance. This coverage will be similar to how your home is insured and the premium is based on the value of the building, type of construction, year built, roof type, and several other factors.
Given the proprietary nature of the data your distribution operation will be processing, having proper cyber liability insurance coverage in place is a good idea.
Although it may not sound like an important piece of coverage, building ordinance or law can be a critical component during a significant claim.
This coverage comes into play when an ordinance or law regulates improvements with the construction of a damaged building. Oftentimes, an older building will require upgrades during the repair process to meet newer building codes.
In addition, this coverage can come into play when a building is significantly damaged, but still partially standing. It's typical for communities to have a building ordinance that requires a structure damaged by 50% or more be demolished and rebuilt in accordance with current building codes rather than simply repaired. The demolition and additional expenses to match new building codes may not be covered without this endorsement.
Worth Considering
Directors and Officers (D&O) coverage will become a more important element of coverage as your distribution business grows. This coverage will provide protection to the officer of the company if they are personally sued for the decisions they make running the business.
EPLI provides coverage for claims of wrongful acts during the employment process. Most importantly, EPLI provides defense costs (within the limits) for claims of wrongful acts. Typical examples of claims that might be leveraged against a cannabis distribution operation include:
-- Discrimination
-- Wrongful termination
-- Sexual harassment
-- Bullying
-- Defamation
-- Invasion of Privacy
-- Retaliation
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