Retailers that sell and produce cannabis products need proper insurance to protect the business and its assets. When exploring risks, the business owner must review all liabilities that could emerge at any time. Selling cannabis products introduces liabilities according to state and federal laws. For example, the THC content in the products could make a sale illegal in some areas, and the business owner needs protection against these liabilities. Properties owned by the business owner require protection to prevent a financial loss, too. Reviewing all insurance policies helps the business owner avoid serious financial losses when operating a cannabis store.
Liability Coverage for Unlawful Sales
When selling cannabis, the establishment must have liability coverage in case a customer provides fraudulent information. The business owner must become familiar with state laws regarding cannabis, hemp, and CBD products. The company cannot send the products to states in which any of the products are illegal. Liability coverage helps the business protect itself against legal claims based on fraudulent information presented by customers. Business owners can learn more about coverage for their cannabis shop by visiting The Feingold Companies right now.
General Liabilities for Injury Claims or Property Damage
Personal injuries and property damage are events that could lead to legal claims for the business. Premises liabilities emerge at any time that a customer is injured on the property or outside the property. If the workers damage property when delivering the product to customers, the liability coverage helps cover the cost of the expenses. Several liabilities could arise when operating a business, and the liability coverage helps business owners avoid financial losses because of a lawsuit.
Product Liability Insurance
Product liability claims happen when a consumer sustains an injury while using the company’s products. When it comes to a cannabis shop, the business could face a lawsuit if the customer has a negative reaction to the products. For example, if they have an unknown allergy and experience life-threatening situations. With cannabis products or CBD oils, if any combination or mixture in the products causes an injury, the owner faces liabilities and could be sued. Getting product liability coverage prevents the business from facing losses if they produce their own products.
Commercial Property Coverage
Property coverage provides funds for the repairs or the total replacement of the property if it is a total loss. The insurance provides coverage for items stored inside the property such as machinery, equipment, and electronics. The business owner gets coverage for their inventory if it is stolen, lost, or damaged. However, the damage must be caused by a covered event such as a fire, natural disaster, break-in, or a criminal act. The terms of the property insurance explain if the owner gets the true replacement value or the market value for the property.
Coverage for the Cannabis Crop
Agricultural liabilities could emerge for cannabis shop owners that grow their own crops and produce their own products. If the crop is damaged, the coverage provides a payment to the company to replace its crop and compensate the owner for the loss. If their crop is damaged, they don’t have any products to sell to their customers, and the liability coverage prevents the owner from facing excessive financial losses. The terms of the insurance define the coverage and how much the company will receive for every crop that is damaged.
Director’s and Officer’s Policies
A director’s and officer’s policies provide the business with a defense if their workers are accused of a wrongful act. The coverage provides funds for a legal defense and helps the company avoid serious financial losses because of allegations listed in a lawsuit. It’s helpful for allegations of selling cannabis products to minors or selling the products in areas where they are illegal. The insurance protects the company and its workers effectively. The business owner completes a claim when they must appear in court, and the insurer assigns a legal defense team for the company. It cannot affect the outcome of the case, but the insurance provides funds to cover the costs associated with the case.
Employee Protection Liability Coverage
Employee protection liability coverage provides assistance if the business faces a lawsuit because of employee-based allegations. For example, if a worker files a claim for sexual harassment, discrimination, or illegal termination. The insurance provides funds to pay for damages if the business loses the case. The terms of the policy define how much coverage the company gains from the insurance. The business owner must consider what risks they could face when it comes to employees, applicants, and individuals who may work for the company temporarily.
All companies must have existing company policies that address these concerns, too. The business owner and supervisors must take action to protect the workers, too. Clauses in the policy could restrict coverage if the company doesn’t follow federal or state laws that apply to these issues.
Worker’s Compensation Coverage
Federal laws require all companies to purchase worker’s compensation if they hire more than one worker. In a cannabis store, the business owner must enforce rules about using the products when the workers are on the premises. The workers must pass an alcohol and drug screening, and if they fail, the worker is not eligible for benefits. The workers must comply with the guidelines issued by the company, and the workers must meet specific eligibility requirements before they can get coverage.
Business owners must follow state and federal laws when it comes to operating a cannabis establishment. When operating the business, the owner faces several liabilities, and they must purchase insurance to cover these liabilities and protect their assets. Commercial property coverage is a must to protect the owner from a financial loss if the property is destroyed. Worker’s compensation is necessary for all companies that have more than one worker, and it provides coverage if a worker sustains injuries. Insurance for the owner’s crops provides assistance of the crop is damaged or destroyed. Reviewing insurance policies for a cannabis store or shop shows the owner how to protect themselves effectively.
