What calibrated coverage for cannabis Service Providers looks like.
Some business provide professional or ancillary services to cannabis companies. These Ancillary cannabis businesses services range from consulting and legal to HR and payroll services. Their operations do not differ from similar types of companies who provide the same services to other industries, but their focus on the cannabis industry does impact them from an insurance perspective.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
Legal liability and the potential for lawsuits is among the top concerns facing cannabis service providers. These risks include professional liability, such as errors and omissions and other professional mistakes. Plus, 19% of service providers report that they worry about customer slips, trips, and falls.
The most common cyber risks among service providers are security breaches and their computers being damaged or going down. Cannabis service providers also face professional liability risks from cyber attacks. 62% of professional services firms cite cyber risk as their top risk.
The theft of customers’ personal info — or worse yet, their financial info — is a looming threat for service providers. Bad actors can wreak havoc by stealing data, encrypting your data and extorting you, or shutting you down with a DDoS attack. These challenges can cause lasting damage to a company who isn’t prepared to face them.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
Legal liability and the potential for lawsuits is among the top concerns facing cannabis service providers. These risks include professional liability, such as errors and omissions and other professional mistakes. Plus, 19% of service providers report that they worry about customer slips, trips, and falls.
The most common cyber risks among service providers are security breaches and their computers being damaged or going down. Cannabis service providers also face professional liability risks from cyber attacks. 62% of professional services firms cite cyber risk as their top risk.
The theft of customers’ personal info — or worse yet, their financial info — is a looming threat for service providers. Bad actors can wreak havoc by stealing data, encrypting your data and extorting you, or shutting you down with a DDoS attack. These challenges can cause lasting damage to a company who isn’t prepared to face them.
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Core Coverage
General Liability
General liability offers broad protection against some of the most fundamental risks cannabis companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.
Crime
Whether employees steal from you, a thief robs your armored car, or you receive a forged check or fraudulent wire transaction, money theft happens in many ways. Crime insurance guards your cannabis company against damages from these particular crimes.
Cyber Liability
Cyber insurance protects companies from third-party lawsuits relating to electronic activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.
Employment Practices Liability
Cannabis companies with any number of employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects cannabis companies against lawsuits related to employment practices.
Workers' Compensation
Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.
General Liability
General liability offers broad protection against some of the most fundamental risks cannabis companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.
Crime
Whether employees steal from you, a thief robs your armored car, or you receive a forged check or fraudulent wire transaction, money theft happens in many ways. Crime insurance guards your cannabis company against damages from these particular crimes.
Cyber Liability
Cyber insurance protects companies from third-party lawsuits relating to electronic activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.
Employment Practices Liability
Cannabis companies with any number of employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects cannabis companies against lawsuits related to employment practices.
Workers' Compensation
Employers are typically responsible for their medical costs and lost wages when employees sustain work-related injuries. This policy covers these expenses, protecting employees while simultaneously keeping cannabis companies running smoothly.
Service Provider Specific
Coverage
Professional liability, also known as errors and omissions (E&O) insurance, covers companies in third-party or client lawsuits claiming substandard work or service. Work errors or oversights, missed deadlines, budget overruns, etc., often result in costly cases — but professional liability insurance responds to these mishaps.
Business Interruption is a component of a property policy and included in the overall total insurable values (TIV) of your property program. Business Interruption has a few components:
- Business Income: indemnifies loss of income following a covered loss
- Business Interruption: indemnifies for only normal business expenses incurred during a time of loss (i.e. rent payments, salaries of important employees, etc.). This DOES NOT includes loss of income, only Business Income offers this indemnification
- Extra Expenses: indemnifies for additional expenses incurred by your company in an effort to regain normal business operations
Professional Liability
Professional liability, also known as errors and omissions (E&O) insurance, covers companies in third-party or client lawsuits claiming substandard work or service. Work errors or oversights, missed deadlines, budget overruns, etc., often result in costly cases — but professional liability insurance responds to these mishaps.
Business Interruption
Business Interruption is a component of a property policy and included in the overall total insurable values (TIV) of your property program. Business Interruption has a few components:
- Business Income: indemnifies loss of income following a covered loss
- Business Interruption: indemnifies for only normal business expenses incurred during a time of loss (i.e. rent payments, salaries of important employees, etc.). This DOES NOT includes loss of income, only Business Income offers this indemnification
- Extra Expenses: indemnifies for additional expenses incurred by your company in an effort to regain normal business operations
Types of Service Providers
That Need Insurance
Legal
These firms provide legal guidance to cannabis companies.
Accounting
These firms provide companies with various payroll services and sometimes tax services.
IT Services
These companies provide tech support, installing and configuring system software and hardware, among other tasks.
Marketing
These firms typically provide tiers of marketing services, ranging from consulting to writing to designing.
Read Our Guide
Learn about, common risks in the Cannabis space and how to mitigate them, including licensing, compliance, funding and insurance strategy.
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FAQ's
More often than not, the premium is a function of company revenue. Changes in revenue will often be the driving factor for increase or decreases in cost on renewal.
How carriers determine premium depends entirely on the industry, for example:
- Tech E&O policies may look at revenue in conjunction with monthly average users.
- Allied health/malpractice premiums will be guided by the number of covered care providers.
- A tour guide’s E&O policy may be rated on “hours”: hours per tour x number of customers per tour x number of tours per year.
Many other variables impact the cost of this coverage, such as:
- Location
- Claims history
- Policy limits