With the advent of the legal cannabis industry in California comes all of the issues that pertain to businesses in any industry: regulation, employment disputes, insurance, etc. Business owners acquire insurance to protect against litigation, allegations of professional malpractice, natural disasters and property damage, and other financial adversity that may arise. What insurance policies apply to the cannabis industry, and should you get a policy? Read on for an explanation of your insurance requirements relating to a California cannabis dispensary, and call a knowledgeable California cannabis business lawyer for help with your boutique cannabis company.
With new industry comes innovation. Some insurance providers now provide “cannabis insurance,” which are insurance policies tied to the unique risks associated with the distribution of medicinal and recreational cannabis products. Cannabis insurance policies are much like other commercial insurance policies, but with specific provisions that adjust for the cannabis industry and its specific risks.
Cannabis insurance policies may cover one or more of the following:
- General Business Liability. General liability protects a business when someone claims they were injured or their property was damaged while located on the cannabis company’s facility or other property. General liability covers businesses in situations like “slip and fall” claims.
- Product Liability. Product liability insurance is an extension of general liability that protects a dispensary in the event a person suffers injury caused by the cannabis products sold.
- Workers’ Comp. All California employers with one or more employees are required to provide workers’ compensation insurance coverage for employees. Workers’ comp provides employees with the replacement of lost wages and payment of medical bills for workers injured on the job.
- Property Damages. Property insurance covers businesses if a natural disaster, theft, weather, or some other incident damages the business’s property or inventory.
- Loss of Business Income. Loss of income is often offered as an extension of property insurance, meant to cover the income a business loses while it is forced to remain closed due to a disaster or some other event.
- Commercial Auto Insurance. Commercial auto insurance governs liability that arises from work-related car crashes, such as accidents involving delivery vehicles.
- EPL Insurance. Employment practices liability (EPL) protects a business against legal claims made by employees for employment-related issues such as harassment, wrongful termination, or discrimination.
These are just a few of the types of insurance provisions available to cannabis businesses. Talk to a cannabis business lawyer to discuss all of the types of coverage available to your cannabis business.
Should I Get Insurance for my Dispensary?
Certain types of insurance are mandatory for any business, such as workers’ compensation. Whether you should acquire coverage for some or all of the other types of policies available depends on the nature of your business, the size of your business, your level of risk aversion, your plans for expansion, and other factors. Generally speaking, any business should carry some minimum level of insurance to avoid catastrophic loss.
Smaller startups may only require the basics, including workers’ comp, general business liability, product liability, and commercial property coverage. Larger enterprises may want to expand coverage to other areas. The extent and amount of coverage may depend on your profits and disposable business income. A cannabis business lawyer can help you conduct a proper evaluation and find the right level of coverage for your enterprise.
Call a Dedicated California Cannabis Business Lawyer
If you are interested in setting up a marijuana business or are dealing with regulatory, tax, licensing, or other legal issues with your cannabis business in Los Angeles or Southern California, call McReynolds Vardanyan, LLP, in Glendale at 818-855-2115. Our California cannabis business lawyers will work with you to get your budding business off the ground efficiently, effectively, and legally.