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Which Cannabis Operators Need Which Insurance Coverages?
Cannabis operators need a variety of different types of insurance coverages. Depending on where on the cannabis supply chain a company falls (from growers to smoke shop owners), crafting the most comprehensive type of coverage policy is necessary to protect the assets of a particular link in the chain. For example, a hydroponic store will have different needs than a cannabis harvester, and both of those will have different coverage needs than a cultivator.
Insurance Coverage Types for Cannabis Operators
The most common types of insurance coverage found in the hemp and cannabis industries are:
- Commercial General Liability
- Product Liability Insurance
- Commercial Property Insurance
- Crop Insurance
- Director’s & Officer’s (D&O) Policies
- Employee Protection Liability Insurance (EPLI)
- Worker’s Compensation Insurance
- Cyber Insurance
- Cargo Insurance
Harvesters and 3rd party processors in the cannabis industry face the particular challenge of taking a crop from the field to the manufacturer. Much can go awry between the end of the growing stage and the beginning of the manufacturing stage.
Unscrupulous Growers Cause Rates to Rise
Insurance companies are now denying claims made by growers who do not follow state laws regarding their grow facility. For example, the National Insurance Crime Bureau recently reported that an increasing problem in California are organized criminal organizations who purchase homes, set fire to these homes, receive the insurance money to rebuild as a rental home, then send in a crew to gut the home and install grow lights, irrigation, and ventilation systems for a grow house.
When these unscrupulous growers are done with their operation, they will file another claim with the insurance company stating that the “tenant” illegally converted the property without their knowledge. Then, they take the insurance money, rebuild the home and sell it for a profit with the insurance companies claim money. This hurts reputable harvesters and growers with increased insurance costs. While it is legal to grow marijuana in a household, the homeowner is limited to six plants at a time.
Harvesters Face Coverage Challenges
Cannabis operators and those who work in the hemp industry should be covered with product liability coverage in addition to a number of other types of coverage. As an extension of the general liability coverage, product liability coverage ensures that harvesters are covered in the event of unwanted side effects during the harvesting process. An expert insurance agent, such as the agents at CannGen Insurance, knows exactly what type of coverage a harvester needs.
In addition to general and product liability coverage, harvesters should consider an excess liability policy. Using program-specific and ISO coverage forms and endorsements, CannGen provides harvesters with excess liability coverage specifically designed to meet their particular coverage needs.
Coverage highlights include premiums from $1 million to $4 million, a follow form that extends exclusively over the CGL policy and an occurrence form. To find peace of mind in knowing that your cannabis or hemp harvesting operation is completely insured with all of the correct coverages, contact the experts at CannGen Insurance for all your insurance needs.
