Calibrated coverage for Cannabis Distribution
Cannabis distribution companies play the unique role of “middleman,” delivering products from growers to business consumers, such as brands or retailers. As imagined, these companies must navigate transportation challenges while simultaneously maintaining the quality of their products, not to mention safeguarding those involved and their hard-earned capital.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
As the “middleman” between cultivators and retailers, cannabis distributors face various risks getting the product into the next hands, from property damage to bodily injury from accidents during business operations.
Delivering cannabis products to the next business in the supply chain opens up distributors to theft, burglary, forgery, and other illegal activities. However, it’s not only inventory that faces these risks. Distributors must also keep capital and securities safe from the hands of criminals.
Cannabis distributors transfer the product from one point of the supply chain to another, leaving inventory vulnerable to damage or loss during transit. Whether it’s a natural disaster or vandalism, cannabis products must navigate a challenging route to their destination.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
As the “middleman” between cultivators and retailers, cannabis distributors face various risks getting the product into the next hands, from property damage to bodily injury from accidents during business operations.
Delivering cannabis products to the next business in the supply chain opens up distributors to theft, burglary, forgery, and other illegal activities. However, it’s not only inventory that faces these risks. Distributors must also keep capital and securities safe from the hands of criminals.
Cannabis distributors transfer the product from one point of the supply chain to another, leaving inventory vulnerable to damage or loss during transit. Whether it’s a natural disaster or vandalism, cannabis products must navigate a challenging route to their destination.
Testimonials
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.
Property
This policy is first-party coverage that protects the Total Insurable Value (TIV) of your operation’s property, reimbursing cannabis companies for direct property losses.
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.
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.
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.
Property
This policy is first-party coverage that protects the Total Insurable Value (TIV) of your operation’s property, reimbursing cannabis companies for direct property losses.
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.
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.
Distribution 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.
Most property policies limit the coverage territory to just 100 ft. off of the designated premises. However, a Property-In-Transit enhancement will offer coverage for property being transported.
Shareholders, competitors, investors, etc., can sue a cannabis company’s executives, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.
Cannabis companies offering tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.
Owned auto insurance provides first-party property damage coverage for your vehicle and bodily injury coverage to uninsured or underinsured motorists. HNOA includes coverage for third-party property damage and bodily insuring resulting from accidents during your business.
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.
Property-in-Transit
Most property policies limit the coverage territory to just 100 ft. off of the designated premises. However, a Property-In-Transit enhancement will offer coverage for property being transported.
Directors & Officers
Shareholders, competitors, investors, etc., can sue a cannabis company’s executives, putting their personal assets at stake. Directors and officers (D&O) insurance protects these assets from lawsuits alleging leaders of wrongful acts managing the business.
Product Liability
Cannabis companies offering tangible products or services risk third-party lawsuits claiming bodily injury or property damage. Products liability insurance covers defense fees and settlements, even for ungrounded claims. This coverage is particularly critical in the cannabis space as testing and manufacturing aren’t regulated at the federal level.
Auto Liability
Owned auto insurance provides first-party property damage coverage for your vehicle and bodily injury coverage to uninsured or underinsured motorists. HNOA includes coverage for third-party property damage and bodily insuring resulting from accidents during your business.
Types of Distribution Companies
That Need Insurance
Sellers
Many cannabis distribution companies focus on selling products to dispensaries.
Logistics
Logistics companies get cannabis products from one location to the next.
Testing Labs
Some cannabis distribution companies take on the responsibility of testing products to ensure state and local compliance.
Brands
Cannabis brands come in various shapes and sizes, from celebrities branding their own cannabis product line to emerging companies trying to elevate their consumer’s experience.
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