What should cannabis businesses know about product liability insurance, and how can it protect them against lawsuits?

AlphaRoot Team

Product liability insurance covers claims alleging that a product caused injury or property damage. The risk management guide notes that customers may file suits over bodily injury or property damage and that product liability insurance helps cover damages and legal fees. Since federal testing standards are limited, this coverage is “essential” in the cannabis industry. Businesses should:
• Assess coverage limits based on product volume and risk profile.
• Ensure policies cover ingestible products, vaporizers and topicals, as some insurers exclude certain product types.
• Maintain detailed production and testing records to support defense.
• Combine product liability with general liability and recall coverage for broader protection.

Adequate insurance helps businesses survive costly litigation and maintain consumer trust.