As the cannabis and hemp industry continues to grow, new dispensaries are establishing themselves around the country. For many dispensary owners, this is the first time they are running a cannabis and hemp business and possibly, their first time running their own business in any industry.
As an agent, your clients will be looking to you for guidance. Most will not understand all of the risks associated with the industry or what kind of coverage makes the most sense.
Here are the high-level topics to cover with your clients that own cannabis and hemp dispensaries to help them find the right coverage plan for their business.
General and Products Liability
The easiest place to start is with general liability. Most dispensary owners will need to provide proof of general liability insurance in order to open their business, occupy a premise or even receive a license.
Products liability, on the other hand, may not be as obvious to the dispensary owner.
Cannabis and hemp regulations, such as acceptable levels of pesticide residue in products, or laws regarding the placement and size of warning labels on products, are going to vary from state to state. Business owners need to be aware of the regulations specific to their state(s) of operation.
Dispensary owners may see themselves as separate from the growing or manufacturing process. They may not realize that they can be held liable for products that are labeled incorrectly, defective, contaminated or not handled properly during the manufacturing process.
Products liability coverage will help cover cannabis and hemp dispensary owners in the event they are sued for the negative effects of a product that was sold in their store.
After general and products liability, there are a wide range of insurance products dispensary owners will likely need.
Additional coverages you should discuss with your clients range from the basics, such as property coverage or worker’s compensation, to less familiar coverage types like errors and omissions or directors and officers liability insurance. As an agent, your role is to help your client understand what makes the most sense for their business.
Every dispensary will have their own, unique insurance needs. There is no cookie-cutter policy that will effectively cover every client.
Helping your Client Understand the Cost
Many elements will impact the cost of insurance coverage for a dispensary owner.
Obvious factors include the state where the business is located, the gross sales, payroll, the size of the team and the total value of on-site inventory.
But dispensary owners may not be aware that other factors, like the likelihood of crime in the neighborhood or weather hazards in the region, play a major role in their cost of coverage.
Dispensary owners, especially those running a business for the first time, need guidance when considering the combination of coverage needed to keep them protected. Agents and brokers play a vital role in helping cannabis and hemp businesses avoid negative impacts on their bottom line.
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