A Closer Look at Cannabis Product Liability Risks

For wholesalers and distributors who are concerned about the product they purchase from growers, cannabis product liability insurance is a necessity.  Many things can happen to a cannabis crop, ranging from drought to application of the wrong pesticide concentration, which renders it unusable.  These missteps can cost wholesalers and distributors substantial losses.

When there is a shortage of products, businesses that provide cannabis to the public are often faced with the decision of filling their orders through other suppliers.  When a new supplier is not properly vetted and lacks a full understanding of state requirements, product integrity may be compromised.  Having product liability coverage can protect not only the product itself, but the equipment used such as vape cartridges, lighters, and batteries.

Liabilities of Cannabis Product Contamination

If a product is sold in edible form, there is a chance of food poisoning or illness from ingestion.  For products that are smoked, possible health hazards due to long-term exposure to contaminants that may be present in the product due to mislabeling or other mistakes are possible.  Product liability coverage protects from these types of contamination.

First Party Claims

In the case of injury, loss, or an accident, whether it is caused by a business owner or another party, it can lead to claims made by the party affected.  This includes failure to adequately warn users of the potential hazards of the product, improper labeling, or mold and other defects of the product.  Product liability coverage will protect a business owner who is involved in a first-party claim.

Third-Party Claims

Surprisingly, cannabis business owners can be held liable for clients who use their products then cause property damage, receive a DUI, or lose wages, incur medical expenses, or cause bodily injury to another person.

CannGen’s Cannabis, Hemp, and CBD Product Liability Coverage

CannGen has crafted a product liability and cannabis distributors insurance policy specifically designed to meet the needs of the hemp and cannabis industry.  By using both program-specific coverage forms and endorsements and ISO, CannGen offers approved classifications including:

• Indoor, Outdoor, and Greenhouse Cultivation
• Harvesters
• 3^rd Party Processors
• Manufacturers
• Wholesale/Distributors
• Retail Shops
• Hydroponic and Garden stores

All of CannGen’s cannabis insurance policies are issued with no exclusions to hemp, cannabis, or any derivatives thereof.  With options ranging from $100,000 to $2 million aggregate and up to $5 million CSL, complete coverage is affordable with deductible options ranging from $2,500 to $25,000.

Business operations and cannabis product liability coverage is a fairly new marketplace with a wide range of options.  Ensure that clients understand their unique needs involved in the cannabis industry.  The best broker provides advice and loss control to reduce product liability exposures for their clients.  For agents or brokers working with distributors or wholesale businesses looking to purchase a complete product liability package with confidence, contact CannGen today.

About CannGen

For complete coverage of your cannabis or grow facility, contact CannGen Insurance Services today at (888) 751-3141 or email us at marketing@canngenins.com.