Cannabis Insurance

Cannabis Insurance Coverage

Cannabis insurance, or cannabis business insurance, is the protection that businesses in the cannabis industry need to grow and evolve. The cannabis industry has experienced record growth since its legalization in the last few years, but their businesses still face extensive restrictions from federal law. As such, it can be extremely difficult for any business in the industry to find comprehensive coverage fitted to their operations. Cannabis businesses face risks, like any business, but we’re still seeing new emerging risks every day, making it difficult to navigate risk management.

Enter Megson FitzPatrick. Our cannabis insurance brokers can help you with your risk management procedures and offer you insights on insurance customized to your business, no matter what stage you are at in the cannabis sales process. We handle the insurance so you can put all your focus on expanding your business.

Get a free cannabis insurance quote with us today

Coverages to Consider Include:

The nature of the cannabis industry is highly volatile, given its novelty and unknowns. It can be difficult to navigate the type of insurance you need to grow, especially when cannabis is your specialty – not insurance. Our cannabis insurance brokers are familiar with the industry and are experts in insurance. Trust us to give you the advice you need. Consider these coverage options: 

• Property (buildings, equipment, and stock)
• Equipment Breakdown
• General and Product Liability
• Product recall
• Cargo & Transit
• Crime
• Cyber & Digital Insurance
• Directors & Officers Liability

Megson FitzPatrick for Your Business’ Cannabis Insurance 

If you’re prepared to open a cannabis business, whether that’s online or it has a physical presence (or both!) you should be ready to secure your operation’s back end with sufficient insurance. In order to begin the process of acquiring cannabis insurance for your business’s unique needs, get a free cannabis insurance quote with the help of Megson FitzPatrick. Our cannabis insurance brokers are ready to discuss with you all your needs and want to ensure you can operate with peace of mind, knowing that you have the protection you require. We have roots planted firmly in Victoria, but our span reaches across the country and we’re happy to help cannabis businesses from all over Canada. We’re one of the largest independently owned insurance brokerages in Canada and are more than confident we have connections with the right carriers to get you the cannabis insurance you need. 

Give us a call or get a cannabis insurance quote today. 

Cannabis Property Insurance 

Cannabis operations usually operate out of a warehouse, a retail shop, or some other form of physical property. That property could be at risk of loss due to natural weather events, and the cannabis industry tends to see high rates of crime – so theft, break-in, and vandalism are threats to be considered. Cannabis commercial property insurance protects your physical structure against common perils so that you can get back to operations as per usual following an unexpected loss. 

Cannabis Equipment Breakdown 

Assuming your business uses equipment in its day-to-day operations, such as machinery to harvest, water, seed, etc., or even equipment to package, printers, computers, and so forth, equipment breakdown is a necessity. Equipment breakdown covers your machinery and equipment if something unexpectedly breaks down. 

Cannabis General & Product Liability 

General liability insurance is a must-have for any business, cannabis industry or not. Product liability is also a necessity if the base of your revenue is generated from product sales. General liability protects your cannabis business against third-party claims of bodily injury or property damage from your daily business operations, where product liability protects your business against legal liability for claims if bodily injury or property damage arises out of the products you sell. 

Cannabis Product Recall 

Cannabis product recall insurance can cover any expenses pertaining to the recall of a cannabis product from the public market. This includes all shipping costs, disposal costs, and even customer notification costs regarding the recall. This option goes hand-in-hand with product liability. 

Cannabis Cargo & Transit 

If you ship or transport your cannabis product to distributors and retail stores in other locations, you need cargo and transit insurance. Cargo and transit insurance for cannabis businesses protects your shipments of cannabis from loss, theft, or damage while being transported. This coverage extends beyond basic claims insurance and can reimburse for the good’s designated value. 

Cannabis Crime Insurance 

Due to the risky nature of the cannabis industry and high theft levels, crime insurance is highly recommended. Also known as fidelity insurance, crime insurance can protect cannabis businesses against theft by employees or third parties of items like money, stocks, securities, property, and more. Property insurance can cover theft if it causes damage to the physical property but only crime insurance will cover the theft of the items listed. 

Cannabis Cyber & Digital Insurance 

The digital age is progressing, and more and more businesses are becoming increasingly dependent on technology to store data and files, keep track of sales, and even handle sales via a digital website. However, cybercriminals are becoming increasingly sophisticated in their attacks, and no business is safe. Cyber and digital insurance covers your cannabis business from the costs associated with a cyberattack and data breaches.  

The Cost of Cannabis Business Insurance 

Cannabis insurance is available wherever recreational and medical cannabis is made legal. It’s imperative for any cannabis business, no matter what stage of the cannabis distribution/sales chain they’re in – be that producers, labs, distributors, wholesale operations, and more. Like any insurance product, it doesn’t come free. Premiums are gauged based on business risk, and more. Not every insurance company is comfortable with underwriting risks that are associated with cannabis, but for those that are, you’ll find your premiums will vary based on the following: 

• Business Industry 
• Business experience 
• Coverage options 
• Coverage limits 
• Location 
• Business size 
• What your business does 
• Insurance history 
• Employees. and more

If you are worried about the cost of your cannabis business insurance, then we highly recommend working with a cannabis broker to find the best possible rates. A broker might offer the following tips: 

• Raise your deductibles to lower your insurance premiums. 
• Shop around with a cannabis insurance broker. 
• Only purchase what you need when it comes to coverage. 
• Proper adequate risk management. 
• Train and do rigorous background checks on employees. 
• Avoid high-risk situations – such as selling to a particular client, manufacturing a specific kind of product, or operating in an area with high crime rates. 
• Ask about eligible discounts. 

The best way to save money is to work through a cannabis insurance broker like our experts here at Megson FitzPatrick. Get a free cannabis insurance quote today. 

Megson FitzPatrick’s Cannabis Insurance FAQs 

The cannabis industry is still novel, so insurance that is comprehensive and covers all corners is difficult to come by. Megson FitzPatrick can help you navigate your complex insurance needs and answer all of your commonly asked questions. Here are a few of our FAQs: 

What kind of cannabis businesses does cannabis insurance protect? 

The cannabis industry is evolving rapidly and Megson FitzPatrick can help navigate the risks. We broker insurance programs for businesses across the cannabis eco-system, from start-ups to established players, including: 

• Producers (large scale to micro-cultivation) 
• Labs 
• Distributors 
• Wholesale operations 
• Retail outlets 
• Ancillary businesses

Is it mandatory for my business to carry cannabis insurance? 

No, insurance isn’t mandatory for cannabis businesses in Canada. It is highly recommended, however, due to the novelty of the industry and the fact that you’ve worked so hard to get your business off the ground. We are more than happy to work with you and navigate your cannabis insurance needs. Product recall claims can derail your business, a slip-and-fall, loss of a product during transportation, etc. – it’s better to be prepared than to be sorry. Get started with Megson FitzPatrick. 

What does cannabis insurance not include? 

Your insurance will only cover the perils listed on your policy, which vary depending on the coverage you’ve purchased. However, as a rule, most insurance policies won’t cover: 

• Intentional actions 
• Wear-and-tear damage 
• Fraud 
• Acts of war 
• Civil unrest 
• Government actions 
• Infestations 

It does a world of good to familiarize yourself with the various coverages listed in your policy. You never know what might (or might not) be covered. Note your coverage limits as well. 

What is a policy limit in cannabis insurance? 

A policy limit is a maximum amount your insurance will payout for a covered claim over the duration of a policy term. For example, if you made a general liability claim for $1.5 million, and you had $1 million in coverage, your policy would only payout to the policy limit – aka, the $1 million. The remaining costs would be yours alone to cover. 

What is an ancillary cannabis business? 

Ancillary support businesses that offer transpiration and delivery, equipment, consulting services, and IT for cannabis businesses. They’re still a part of the cannabis industry and may still face some of the risks that cannabis businesses do. Depending on where your ancillary business is located, if cannabis isn’t legal there then some of your existing insurance won’t cover certain operations. 

Megson FitzPatrick recommends the following coverage options and policies for ancillary cannabis businesses: 

• Cannabis cyber insurance 
• Umbrella liability insurance 
• General liability insurance 
• Errors and omissions insurance 

Does my cannabis property insurance cover flooding? 

Only if you’ve purchased a cannabis property insurance endorsement for flooding. Flooding and overland water damage are not always covered by your standard insurance policy and may necessitate the purchasing of an added endorsement to be covered. The same goes for perils such as earthquakes.