What calibrated coverage looks like for Psychedelics.
The psychedelic space faces many of the same risks as pharmaceutical and biotech companies, going through drug discovery and sourcing funding — this capital fuels ongoing research and development instead of generating revenue. As a result, psychedelic therapy must navigate clinical trials, avoid mismanagement, and protect their workforce effectively.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
Many psychedelic companies use high-end equipment to complete daily business operations. Processing systems or even heating and cooling equipment can result in a significant loss if a breakdown occurs, not to mention the business interruption.
A psychedelic company’s directors and officers, regardless of private or public status, face scrutiny and lawsuits claiming executives mismanaged the business in some way or another. As you might have guessed, D&O litigation has only increased recently.
With massive government regulations and compliance inconsistencies, quality controls might make product recall situations and defense of claims increasingly challenging. Plus, product issues can arise from many angles, from improper processing to incorrect packing to unsuitable storage.
A license to succeed.
State lines. Lines of business. Calibrated coverage means lines of insurance that fit your growth plan.
Many psychedelic companies use high-end equipment to complete daily business operations. Processing systems or even heating and cooling equipment can result in a significant loss if a breakdown occurs, not to mention the business interruption.
A psychedelic company’s directors and officers, regardless of private or public status, face scrutiny and lawsuits claiming executives mismanaged the business in some way or another. As you might have guessed, D&O litigation has only increased recently.
With massive government regulations and compliance inconsistencies, quality controls might make product recall situations and defense of claims increasingly challenging. Plus, product issues can arise from many angles, from improper processing to incorrect packing to unsuitable storage.
Testimonials
Core Coverage
Directors & Officers
Shareholders, competitors, investors, etc., can sue a 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.
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.
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.
Directors & Officers
Shareholders, competitors, investors, etc., can sue a 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.
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.
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.
Psychedelics 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.
Psychedelic 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 psychedelic space as testing and manufacturing aren’t regulated at the federal level.
Clinical trials are one of the most critical phases in psychedelic research and development. If a research subject is injured during this process, clinical trials coverage will compensate you if you’re legally liable. It will also pay the ancillary costs and expenses in your defense.
From mold to pesticides to radiation, psychedelic companies can be held liable for releasing substances of this nature. This policy covers third-party claims alleging bodily injury or property damage due to the pollutants a company released.
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.
Product Liability
Psychedelic 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 psychedelic space as testing and manufacturing aren’t regulated at the federal level.
Clinical Trials
Clinical trials are one of the most critical phases in psychedelic research and development. If a research subject is injured during this process, clinical trials coverage will compensate you if you’re legally liable. It will also pay the ancillary costs and expenses in your defense.
Pollution
From mold to pesticides to radiation, psychedelic companies can be held liable for releasing substances of this nature. This policy covers third-party claims alleging bodily injury or property damage due to the pollutants a company released.
Types of Psychedelic Companies
That Need Insurance
Research & Development
Most capital designated to psychedelic companies supports ongoing research into new drugs and treatments.
Manufacturers
Manufacturing and extraction are tasked with transforming the pure crop into a consumable alternative.
Distributors
Cannabis distribution companies play the unique role of “middleman,” delivering products from growers to business consumers, such as brands or retailers.
Technology
Emerging tech companies develop cutting-edge technology to support psychedelic experiences.
Treatment Firms
These organizations focus on developing psychedelic therapies.
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.
"*" indicates required fields
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