SolutionsIndependence Risk Solutions works with you to effectively assess the risks your cannabis business faces. Once an analysis is complete, we help you develop a comprehensive risk management plan. Many of the exposures your business faces can be addressed by transferring the risk via an insurance policy. Here are some examples:
One of the most to effective ways to protect the assets of your cannabis business is to carry adequate Commercial General Liability (CGL) insurance coverage. CGL protects your business from damages caused by a variety of claims, including bodily injury or property damage for which your business is found to be legally liable.
For any business that sells or touches a product that is ingested, inhaled, applied topically, or in any other way consumed, there is perhaps to greater exposure to catastrophic loss than the liability created by their products. A cannabis business is no different. Additionally, products that are not consumed also have great potential to cause bodily injury or property damage. Vape pen batteries are a prime example.
In the event a business is alleged, or found liable, for a claim involving their product, Product Liability Insurance is designed to defend the company and protect its assets. However, the policies that protect cannabis companies vary drastically regarding the exclusions and coverage limitations within them. It is crucial that you engage a coverage design specialist that fully understands and can clearly explain the policy conditions to you.
No matter where your business falls within the supply chain, a Product Liability policy is a critical part of any sound risk management program.
Workers Compensation coverage pays benefits to workers injured on the job, including medical care, part of lost wages, and permanent disability. It also provides death benefits to dependents of employees killed from a work-related accident.
In almost all States, businesses who have employees are legally compelled to carry Workers Compensation insurance. The penalties for not putting coverage in force, especially if an uninsured injury occurs, can be extreme.
Because Workers Compensation insurance in many cases is a business’s single largest insurance expense, a proactive and comprehensive Injury & Illness Prevention Plan (IIPP) is critical in controlling costs.
There are almost no businesses that don’t use automobiles in the course of their business. At a minimum, owners and employees typically utilize their personal vehicles consistently or intermittently in the course of business operations. If the operations exceed the capabilities of personal vehicles, companies may purchase vehicles to accomplish their operations. Whether or not personal or company owned vehicles are utilized, the potential for automobiles to cause extreme damage is undeniable, regardless of the frequency of which they are utilized. Thus, it is very important that businesses procure the right Commercial Auto coverage.
It is also important to understand certain licensing authorities can compel the placement of Commercial Auto coverage, regardless of operations. It is highly advisable to check with the licensing authorities that your business falls under so that you are aware of the requirements.
Virtually every cannabis business will obtain property to conduct its operations. From electronics such as laptops, copiers, and phone systems, to equipment utilized to produce, package, and ship product, a cannabis business’s accumulation of property can require a large investment of capital. Most cannabis businesses will also develop an inventory of their product that can grow quite large in value. Fire, theft, and many other perils can potentially cripple a business by robbing it of the tangible items it needs to operate.
Developing a detailed schedule of all your property loss exposures with a knowledgeable coverage design specialist can ensure you resume normal business operations after a loss such as fire or theft occurs.
A comprehensive Commercial Property policy can also cover some intangible financial losses such as lost profits and continuing expenses caused by a covered peril. To cover such a loss, making sure Business Income coverage is included in your Commercial Property policy is essential.
Cannabis businesses that rely heavily on equipment to produce their product, such as extraction operations, would be wise to also include Equipment Breakdown coverage within their Commercial Property policy. This coverage can pay for financial loss suffered when a piece of equipment breaks down and cannot be immediately repaired.
Suretyship is a very specialized line of insurance that is created whenever one party guarantees performance of an obligation by another party.
The most common surety needed for cannabis businesses is a license bond. These bonds are underwritten based on the owner’s personal credit. Independence Risk Solutions has bonding options for businesses with various credit levels.
Crops grown indoors can currently be insured relatively easily. However, obtaining adequate limits for larger crops can be a challenge as some carriers have capacity limitations on this line of coverage. Additionally, crops grown outdoors are also a challenge to insure. However, it is expected that when carriers that insure traditional crops enter the market, coverage will be much more obtainable.
Crops can also be insured in their various stages, from seed to harvested flower. Valuation of crops can vary from carrier to carrier, with some accepting the limit the insured business estimates, while others have strict valuation formulas. It is important to work closely with a coverage design specialist to develop an accurate valuation of your crop.
For some cannabis businesses, part (or all) of what they sell is a service or expertise. Two examples of this are consultants assisting cannabis businesses through the licensing process, and testing laboratories. Financial loss can be sustained when the expertise or service provided is either allegedly, or in actuality, wrongful. Professional Liability, otherwise known as Errors & Omissions insurance, is designed to cover such instances.
Hiring and retaining talent is predicted by many to be one of the cannabis industry’s greatest upcoming challenges due to its rapid growth. A quality Employee Benefit program is essential to build and retain a qualified team. Additionally, any business with more than 50 Full Time Equivalent employees (FTE’s) is subject to the Affordable Care Act mandates.
Whether your goal is to simply avoid the A and B tax penalties, or you desire to provide a competitive Employee Benefit program, Independence Risk Solutions has an option to match your objectives. These can range from Minimum Essential Coverage plans to broad network high metal plans. Dental, Vision, Life, and many other ancillary coverages are also available on a sponsored or voluntary basis.
The most important asset for most businesses is its employees. However, managing a diverse and talented workforce is a challenge. Regardless of how well you hire, train, and treat your employees, conflicts can arise which may lead to employment related lawsuits. Due to the current social climate, these lawsuits are one of the biggest threats employers face.
Potential lawsuits can stem from many different alleged wrongful acts including Wrongful Termination, Workplace and Sexual Harassment, Discrimination, Wage and Hour Disputes, Hiring and Harboring Illegal Aliens, and Breach of Employment Contract.
Employment Practices Liability insurance can be obtained to protect against employment related lawsuits. Many of these policies also include HR services to give guidance on tough employment decisions.
Protection against suits brought against the decision makers for their alleged mismanagement of the company
Protection against cyber events such as data theft, ransomware, virus attacks, cyber fraud, etc.
Additional limits of liability added onto coverages such as General Liability, Product Liability, Auto Liability, and Employers Liability
Protection against lost profits and continuing expenses when business operations are suspended or reduced due to a covered peril
Protection against perils such as fire and theft suffered while a tenant improvement construction projection or ground up construction project is taking place
Protection for property such as inventory while in transit
Form of complete or partial self-insurance for larger companies looking to participate in underwriting profits
Protection against events excluded in the Commercial Property coverage
It can be challenging for doctors who wish to prescribe medical cannabis to obtain Medical Malpractice Insurance. Independence Risk Solutions has relationships with insurance carriers that will cover doctors who prescribe cannabis.
Protection against bad debt created by customers who have defaulted on their credit terms
Protection against liability and management costs of a workplace violence event
