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Cannabis is now widely accepted as a legal and regulated industry, but many are still wondering how their insurance will change. Some companies are already preparing for the future by offering coverage to cannabis businesses who need it.
California cannabis business insurance is a type of insurance policy that covers the cost of damages and losses that can be caused by the legal cannabis industry. The term “cannabis” refers to marijuana, hemp, and other related products.
Cannabis insurance is a collection of company policies that protect against the risks that come with the marijuana industry. Distinct enterprises, however, need different Marijuana Insurance Types plans. Most cannabis companies, like as shops, producers, and testing laboratories, need Insurance for General Liability, which costs between $700 and $3,000 per year.
Embroker makes it easy for marijuana company owners to get business insurance. They offer a simple online application that takes less than 10 minutes to complete and instantly connects you with different carriers. You may manage your quotes and policies online for free after you’ve applied.
Embroker is a website where you can find out more about the
What Is Marijuana Insurance and How Does It Work?
While a cannabis insurance coverage does not exist, marijuana company owners may choose from a variety of plans that cover their activities. For example, Insurance for General Liability is a must-have for most companies since it protects them against client injuries and property damage. Depending on their activities, cannabis company owners may also need commercial property, Crop Protection Insurance, and commercial car insurance.
Leading Cannabis Insurance Providers
Marijuana insurance is mostly marketed by non-admitted insurance companies. Because these companies are not state-licensed, they may frequently cover riskier operations and new sectors. Because the number of options is restricted, we’ve narrowed our search to business insurance brokers that deal with many carriers so that company owners may evaluate options.
Leading Cannabis Insurance Providers
The following are some of the best hemp insurance companies:
Embroker
Embroker is a new online broker that combines technology and insurance experience to provide coverage to small company owners, particularly startups and growing sectors. Embrokers works with leading carriers that can provide a comprehensive range of important business coverages, including as product liability, property insurance, and general liability, for marijuana companies.
Embroker should be considered by business owners that want quick estimates. Business owners may use Embroker’s platform to follow offers and manage policies they’ve acquired via Embroker or another broker after filling out the company’s online application, which takes only minutes to complete.
HUB International is a non-profit organization based in
HUB International is a non-profit organization based in is a large international property and casualty broker with solid financial backing and partnerships with both state-licensed and non-admitted carriers. Recently, they added a division dedicated to specialty practices that can offer a number of cannabis insurance policies including general liability, workers’ compensation, crop, and employment practices liability.
HUB’s risk management help, on the other hand, is really exceptional. Regulatory compliance, cross-border business obstacles, worker safety, and emergency response preparation are all issues that HUB brokers assist their hemp insurance customers with. As a result, HUB is suitable for company owners who need help reducing risk.
Cannabis Insurance Associates is a company that specializes in insurance for
Cannabis Insurance Associates is a company that specializes in insurance for is a division of Brown & Brown, one of the largest independent insurance brokers in the U.S., so its agents can offer coverage in all 50 states. The company’s sole focus is insurance for cannabis dispensaries, grow operations, transporters, and manufactures, as well as a large selection of ancillary businesses, such as landlords and hydroponic stores.
Business owners who have multiple transportation and stock exposures, such as growers who sell seedlings to other cultivators and transport plants to manufacturers and retailers, may want to work with Cannabis Insurance Associates is a company that specializes in insurance for. They’re one of the few marijuana insurance providers with a stock throughput policy that covers the transport of raw materials, unfinished stock, and finished product. Purchasing stock throughput insurance minimizes the chance of duplicate coverage while also simplifying policy management.
Heffernan Insurance Brokers is a company that specializes in insurance brokerage.
Heffernan Insurance Brokers is a company that specializes in insurance brokerage. is a national insurance agency with a reputation for providing comprehensive insurance solutions to niche industries. The company has been in business for over 30 years and has been the exclusive broker for the California Growers Association since 2017.
Heffernan Insurance Brokers is a company that specializes in insurance brokerage. is a good choice for cannabis-based businesses that want to get their coverage quickly. While applying for marijuana insurance usually takes longer than it does in other industries, Heffernan offers a paperless quoting and a direct line to business insurance producers that can speed up the process.
Cannasure Insurance Services is a cannabis-related insurance company.
Cannasure Insurance Services is a cannabis-related insurance company. is unique in that they are both an insurance carrier and insurance agency. As a carrier, Cannasure can write its own policies in some states, but they also work with other insurers to get cannabis business owners coverage.
Cannasure began as a reaction to the medical marijuana industry’s lack of coverage choices, and they’ve maintained a significant presence there. As a result, they’re an excellent alternative for doctors and other healthcare professionals that prescribe marijuana. Cannasure not only has extensive expertise of the cannabis sector, but it also provides customized insurance that include medical malpractice coverage.
Praxis Insurance Associates is a firm that specializes in insurance.
Praxis Insurance Associates is a firm that specializes in insurance. is a new insurance broker. However, its focus on workers’ compensation and the cannabis industry makes it a top choice for cultivators, lab tech, and retailers. The company can offer workers’ comp insurance to cannabis businesses in 27 states.
Praxis Insurance Associated’s pay-as-you-go plan is a good option for business owners who require workers’ compensation insurance. Praxis lets company owners avoid unexpected costs following a workers’ compensation audit by collecting a monthly rather than an annual charge.
Marijuana Insurance Types
When cannabis shops, growers, and manufacturers speak about hemp insurance, they’re referring to a collection of insurance policies that safeguard their assets. Insurance for General Liability protects third-party injuries and property damage, whereas Property Insurance for Businesses covers damage to business-owned property.
Most Common Marijuana Insurance Types
Insurance for General Liability
Insurance for General Liability covers costs associated with third-party claims of physical injury, property damage, and reputational harm. These costs typically include the injured party’s repair bills or medical expenses and your legal fees if they sue. Most policies also include coverage for harm caused by defective products.
The following are some examples of expenditures covered by general liability insurance for a cannabis business:
- Medical costs for a consumer who ingested aflatoxins were linked back to your buds.
- If a rival sues you for defamation after you tweet about their substandard goods, you will be responsible for your legal bills.
- Repair expenditures for a neighbor’s building after a fire in your head business causes smoke damage.
Because it covers claims that are widespread across numerous sectors, general liability insurance is a must-have for every organization.
Property Insurance for Businesses
Property Insurance for Businesses covers your business-owned property, paying the insured value minus your deductible when items are damaged in a covered event. Cannabis business owners can opt to insure their property for its full replacement cost or its actual cash value, which deducts depreciation.
Property insurance often covers the following events:
- Theft
- Vandalism
- Fire
- Hail
- Windstorms
Cannabis business that don’t own much property, have fewer than 100 employees, or earn less than $1 million in revenue may qualify for a Policy of the Business Owner. BOPs combine commercial property with Insurance for General Liability for a reduced premium.
Insurance for Errors and Omissions
Insurance for Errors and Omissions (E&O), also called professional liability, covers your defense when third parties accuse your business of making mistakes that result in financial loss. Insurers typically cover costs such as attorney’s fees, court costs, and settlements or judgments even if the lawsuit has no merit.
Perhaps the businesses with the greatest risk of negligence claims are those who work in the medical marijuana industry. Healthcare providers who either prescribe or recommend cannabis use may be sued if the product does not perform as intended. For instance, if a patient has an allergic reaction to medical marijuana that sends them to the emergency room, they may sue the prescribing doctor for malpractice. The doctor’s E&O insurance would most likely cover the cost of the lawsuit.
Insurance against commercial crime
As a largely cash industry, cannabis business owners should consider getting Insurance against commercial crime to cover financial losses due to illegal activities. Policies typically pay for stolen money and securities whether the crime is committed by employees or outside actors.
Commercial crime often covers the following illegal activities:
- Employee deception
- Forgery
- Computer thievery
- Electronic financial transfer that is illegal
- Kidnapping, extortion, and ransom
- Scams using fake money orders
Insurance for Workers’ Compensation
Every state except Texas requires employers to carry Insurance for Workers’ Compensation to cover their employees’ work-related injuries and illnesses. Policies typically pay injured employees’ medical bills and replacement wages or death benefits to their families.
Workers’ compensation frequently covers the following injuries and illnesses:
- An explosion at your food production factory, for example, might result in a sudden severe injury.
- Back pain induced by lengthy hours harvesting crops is one example of repetitive stress injury.
- Employees at a testing lab, for example, may get lung disease as a result of their work.
Marine Insurance (Inland)
Marine Insurance (Inland) is a type of property coverage that moves with the items it insures. Property Insurance for Businesses usually only covers business property when it’s at the location listed on the policy. As a result, cannabis businesses that transport their products to different places may need Marine Insurance (Inland) to pay for items that are stolen, lost, or destroyed.
Some examples of when a cannabis business may need Marine Insurance (Inland) include:
- Delivering crops to a factory via a cultivator
- Owner of a dispensary that provides delivery services
- A dispensary receives edibles from a manufacturer.
- An online marijuana delivery service that provides cannabis-related items to customers.
Inland marine covers the insured amount minus your deductible if things are damaged while being transferred between sites due to a covered incident.
Insurance for Commercial Vehicles
Insurance for Commercial Vehicles covers first- and third-party damage stemming from a business’s use of cars, trucks, and other vehicles. Most states require a minimum amount of liability to pay for damage you and your insured drivers cause other people, but cannabis business owners may want to cover damage to their autos, too.
Additional car coverages available to company owners include:
- Collision: Auto accidents might cause damage to your company’s automobiles.
- Damage to your company’s cars caused by anything other than auto accidents is covered under comprehensive coverage.
- Hired & non-owned auto: Damage to and caused by vehicles hired, leased, or borrowed by your business
Most personal vehicle insurance plans prohibit business driving, so cannabis company owners who use their own automobiles for work-related journeys may be uninsured.
Additional Cannabis Insurance Options
While the marijuana insurance stated above is required for most cannabis companies, others may need extra coverage according to their activities. This is often owing to regular cannabis insurance policy exclusions.
Policy of the Business Owner
A Policy of the Business Owner (BOP) combines general liability and Property Insurance for Businesses into a single package, often allowing small business owners to purchase these fundamental coverages at a lower rate. For instance, dispensaries spend about $350 – $750 per year for general liability. Depending on the amount of property they own, they might spend another $200 – $1000 annually. However, most marijuana dispensaries pay between $600 – $1,500 for BOPs.
Crop Protection Insurance
Property Insurance for Businesses usually excludes crops, which means marijuana cultivators need Crop Protection Insurance to cover costs when their seeds, seedlings, and plants are damaged. Most Crop Protection Insurance pays for damage caused by theft, Vandalism, fire, and equipment breakdown. Some insurers only cover marijuana crops when they are grown indoors or in a greenhouse.
Insurance for Product Liability
Insurance for General Liability has product liability coverage, called products-completed operations, to pay for consumers’ property damage or bodily injury due to defective products. However, it may not be enough for businesses that manufacture products in the cannabis industry. Business owners who design or manufacture accessories or consumable products may want a standalone product liability policy.
Insurance for Product Recalls
While the products-completed operations coverage in general liability pays for harm caused by defective products, it does not cover the costs of pulling them from the market. For that, cannabis businesses need Insurance for Product Recalls to pay for customer notification, retrieval and disposal expenses, and replacements products.
Insurance for Special Events
Most Insurance for General Liability provides limited coverage for special events; cannabis business owners who want to host a large 4/20 event may need a standalone Insurance for Special Events policy. Moreover, they may need an additional marijuana endorsement if they want attendees to be able to smoke.
Costs of Dispensary Insurance
Cannabis business insurance costs depend largely on industry segment. For instance, outdoor growers often spend $20,000 – $30,000 annually on all of their insurance because they tend to have lots of business property and need Crop Protection Insurance. Costs of Dispensary Insurance are often much lower, around $700 – $3,000 per year for general liability.
Costs of Dispensary Insurance & Deductibles by Policy
If the dispensary provides delivery services, cannabis insurance for dispensaries costs between $800 and $4,500 per year. Businesses with additional activities are more likely to pay more.
A modest indoor growing operation, for example, may cost between $4,000 and $10,000 per year in general liability and commercial property insurance. Crop coverage might add $5,000 to $8,000 to the yearly expense.
Manufacturers of infused goods or edibles may face higher cannabis company insurance premiums, owing to the requirement to cover equipment damage, liability litigation, and cannabis stock, among other things. Their annual insurance expenses range between $5,000 and $12,000.
Suggestions for Obtaining Cannabis Insurance
Insurance customized to the activities of a business is generally required, but this is particularly true in the medicinal and recreational marijuana industries. Marijuana insurance may be difficult to navigate due to a mix of state rules, federal prohibition, and consumable goods.
Here are three pointers to help you get the right insurance for your cannabis company:
Prepare ahead of time
Because cannabis is a schedule one restricted drug, getting marijuana insurance takes longer than getting insurance for other companies. This implies that entrepreneurs who wish to start a cannabis-related firm should consider about insurance as soon as possible. To maximize their chances of being covered, startups in particular should have a business strategy in place.
Investigate Marijuana Insurance Providers
The bulk of cannabis insurance is offered by non-admitted providers that aren’t state-licensed. This does not imply that they are unregulated or untrustworthy, but it does imply that they are not eligible for public aid if they fail. As a consequence, cannabis entrepreneurs should research the financial ratings of any insurance provider.
Understand the Insurance Requirements in Your State
The majority of company owners are only need to fulfill a few state insurance requirements. If they have employees, they usually require workers’ compensation insurance, as well as some kind of commercial motor liability insurance if they utilize automobiles. Many states and municipalities, on the other hand, have extra criteria that vary according on the insurance and the quantity of coverage. To ensure that they satisfy their requirements, cannabis owners should be aware of them before shopping for insurance.
Get Accidental Death Insurance if you don’t already have it.
Many small company owners get life insurance to safeguard their families as well as their workers. If you operate a cannabis company, though, insurance agent Jeff Root says that’s not an option.
“If you produce or distribute marijuana, or own a firm that does any of those things, you won’t be able to get life insurance to protect your company.” There isn’t a single life insurance company that will cover it in the business. You won’t be able to finance a buy-sell agreement or have any key man life insurance policies as a result. I usually advise at the very least purchasing an accidental death coverage. These are fairly affordable and cover accidents but not sickness. There are other speciality insurance organizations like Lloyd’s of London or Peterson International that may help clients arrange a policy, but they’re far more costly and don’t come with the same guarantees as typical life insurance plans.”
Root Insurance Agency’s Founder, Jeff Root
Insurance based on hemp Most Commonly Asked Questions (FAQs)
Cannabis insurance may be difficult to get, whether you own a head store or cultivate marijuana plants. Many cannabis-related firms will benefit from the knowledge we’ve given, but those with unique operations may have additional questions. The answers to some of the most commonly asked questions are included here.
Is insurance required for my cannabis business?
The cannabis industry’s insurance requirements differ per state. Certain policies, coverage levels, and surety bonds are required in certain states, while others simply need one or the other. To discover out, you need contact the government agency that oversees the marijuana sector in your state.
Is medicinal marijuana covered by workers’ compensation?
Although some state boards have determined that workers’ compensation insurers must pay for medicinal marijuana, such decisions are uncommon. Furthermore, workers’ compensation regulations in certain states allow insurers to dismiss medicinal marijuana claims.
Is medicinal marijuana covered by health insurance?
Because cannabis is classified as an illegal narcotic under federal law, no health insurance companies now pay the expense of medicinal marijuana. The legal status of marijuana prevents most health insurers from requiring FDA clearance for medicinal therapies. Some insurance companies, on the other hand, cover a legal substitute, such as synthetic marijuana.
Conclusion
Medical and recreational marijuana pose several problems to conventional insurance as an emerging business. While more accepted carriers are beginning to provide hemp insurance, the majority of company owners will have to rely on non-admitted insurers. These companies may provide good coverage, but cannabis entrepreneurs should examine rates, policy conditions, and the insurer’s financial ratings before purchasing.
Working with a broker may make finding and comparing marijuana insurance pricing and coverage alternatives a lot simpler. Embroker takes it a step further by providing cannabis companies with an online application that is simple to fill out and provides estimates quickly.
Embroker is a website where you can find out more about the
“Cannasure insurance application” is a term that has been popping up more and more lately. It refers to the cannabis industry, which is becoming a big part of the economy. To understand what cannabis insurance is, it’s important to know what coverage it offers, how much it costs, and who provides it. Reference: cannasure insurance application.
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