The Best Ways to Protect Your Cannabis Business
By Max Meade
If you are currently a cannabis business owner or plan to join the fastest growing industry in the country, then you need to make sure that you protect yourself and your business. You may be thinking that this means having the best security system in place or choosing the safest location or partnering with top companies/suppliers. All of these are great measures to have in place, but none offer the protection that you truly need.
The protection I am referring to comes from an insurance policy.Not having an appropriate policy for your business is the beginning of the end. This is because having an the wrong policy means that your business won’t be covered for operations and exposures and will be left vulnerable to a claim or loss occurring—which could result in having to pay for the cost out-of-pocket. This scenario occurs far too often. You’ve undoubtedly seen or heard of a business going under due to a lawsuit or a bad claim/loss, usually because it cannot recover financially. The worst part is that most of the time the loss could have been prevented if it wasn’t for the inappropriate insurance policy!
How can you prevent this from happening to your business? Below are the five best ways to protect your business:
Work with an agent who understands the industry and your business. Make sure that you work with an insurance agent who understands your business and the cannabis Industry. If they don’t understand what you do then how can you expect them to craft a policy to protect exactly that?
Don’t settle for standard coverage. As a cannabis business owner, you need specialty coverage to ensure that you are properly protected. The only way to secure this coverage is to find an agent who has access to a cannabis insurance program. Being in a cannabis program means that the carrier understands and is comfortable with the industry and will price accordingly. Carriers who don’t have a program for this are more hesitant to write a policy and will most likely charge a higher premium to offset that hesitance.
Sit down and openly discuss all of your operations. This may seem odd, but it is important when you discuss your business with the agent. If you just try and explain to them what you do there might be some lost in translation and this will leave you vulnerable. Clearly describing your operations will give your agent a much clearer understanding of the business, which will make your life easier in the long run because they won’t be bugging you every five minutes for information.
Read the contract and understand the insurance requirements. Many times contracts, whether with a supplier, a landlord or a client, rely on certain insurance requirements that must be met. Make sure that you are aware of these requirements and have them in place to avoid losing a lease or one of your best suppliers/clients due to not meeting the requirements set forth in the contract.
Don’t operate without insurance. The worst thing you can do is to begin operating without insurance. There is no reason to take on this risk. The cost of doing so far outweighs the cost of insurance and all it takes is one claim or loss to wipe out a business. Think of this real-life example: Someone owned a farm and had trimmers come onto his property, but he was not insured. While working, one of the trimmers fell into a hole on the property and broke her femur, which resulted in her never being able to walk again. This business owner lost his farm and his business, and will be paying for her damages for the rest of her life just because he didn’t have a general liability policy on his farm!
Please give me a call and I will work hand-in-hand with you to make sure that your business is properly protected. I am able to access a specialty cannabis, hemp, and CBD insurance program that can provide clients with the most comprehensive and cannabis-specific coverage to ensure that all of their operations and exposures are protected properly, along with making sure that they pay the most reasonable premium cost.
Cannabis Insurance Advisor Brown & Brown