If you work within the cannabis space, you know that manufacturing quality products is the most important part of sustaining business. From the point of cultivation to the end user, it is important that marijuana dispensaries reduce the possibility of contamination. They can do this by implementing proper risk management and loss control measures.
As more states begin to relax their cannabis laws, more Americans are becoming open towards cannabis usage. This will make product liability become the focal point for operations across the country.
What is Product Liability Insurance and Why is it Needed in the Cannabis Industry?
Products liability protects your business from damages arising from physical loss resulting from a covered product. If a defective product is consumed or used, a business is opening themselves up to lawsuits. THC may alter the way humans behave. Cannabis companies, particularly ones producing edibles, must indicate to consumers the strength of their products, while keeping high liability limits on their insurance policy.
Many businesses may not realize that their products liability coverage is inadequate. When partnering with an insurance broker, make sure they explain how flexible the carrier is at avoiding unwanted, exclusionary language that will leave your business exposed.
Pay attention to how your policy defines “bodily injury”. Some may narrowly define this, while others will allow a broad definition. If you operate in multiple states, be aware that product coverage may differ depending on where the operation is located.
Cultivators can ensure proper handling with basic strategies to reduce cross contamination. These include frequent hand washing and protective clothing. Keep equipment decontaminated as much as possible, and test product for mold and mildew once it's harvested. Understand the source of contamination so you may avoid it as much as possible.
At Alliance, we have several carrier partners offering cultivators and dispensaries rich coverage terms. These will allow companies to scale their operation in the most effective way possible. Contact us today! Let us give you sincere advice on how to properly protect your assets in this highly dynamic industry.
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Article by Kyle Hoffman
Kyle Hoffman helps cannabis companies implement risk management strategies that allow them to scale their business without sacrificing coverage. He consults with small to midsize cultivators and dispensaries on how to navigate the insurance market by putting together practical solutions that build confidence, drive revenue, and reduce total cost of risk.
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