Insurance for Cannabis Grow Companies

Thanks to the passage of the 2018 Farm Bill, the industrial production of hemp has become legalized. The cannabis industry is booming, and businesses are seeing more profit-earning potential. When opening a cannabis business, it’s important to consider the demand in the area and how to differentiate your offering. It’s also important to consider how cannabis businesses can protect their investments.

Cannabis and the Insurance Industry

Like any type of business, cannabis-related businesses have insurance needs. Having the right business insurance is vital to risk management and protecting business assets. Today’s marketplace has limited insurance companies and underwriters that provide adequate coverage for the legal cannabis industry. There’s no set type of cannabis insurance; rather, business owners combine different types of insurance coverage to meet their insurance needs. Coverage options have been improving, but the challenge for insurers now is to provide quality coverage that’s inclusive and fairly priced.

Types of Cannabis Insurance

There are several different coverage options for cannabis-related businesses. A product liability policy is essential for any cannabis company that sells edible cannabis products, dispenses cannabis, or sells smoking devices. Product liability helps dispensaries and distributors pay their costs in the event of a product recall, as well as protecting against breach of warranty, failure to warn, and deceptive practices.

Cannabis growers and cultivators need crop insurance to protect their seeds, seedlings, and mature plants. This type of coverage protects against financial loss in the event crops are damaged by fire, theft, vandalism, or smoke. A director’s and officer’s insurance policy protects executives and board members of a cannabis company who fail to comply with state and federal regulations. Cannabis businesses collect personal data from customers who make online purchases, so given the risks of cyberattacks and data breaches, business owners need a cyber insurance policy to cover their liability in the event of a data breach.

Cannabis cultivation is a delicate and time-intensive process. The type of soil used for growing affects the health and outcome of cannabis plants. There are several factors to consider when choosing the best soil for growing, such as location, budget, experience, cultivation technique, and strain selection. The trusted cannabis resource Bloom & Oil explains the basics of choosing the best soil for weed.

Certain types of soil should be avoided. Non-organic soil with fertilizers, topsoil from your backyard, and wild cultivation should all be avoided. The best soil for cultivation is soil that is prepared. Unfertilized potting soil is a good option for beginners because it’s not too dense and has no nutrients. Potting soil is the least expensive option and can be used when growing cannabis plants in containers. Organic soil is a good option when growing outside in garden beds. Coco coir is a good option for indoor and outdoor growers. It’s less dense than other soils because it doesn’t need perlite or vermiculite, making it great for drainage. Hydroponics benefit from coco coir, expanded clay pellets, perlite, and rock wool. When choosing a soil option for your cannabis crop, it’s important to consider the drainage, density, and pH level.

Coverage Challenges for Growers

Product liability coverage is essential for cannabis operators and those in the hemp industry. Product liability is an extension of general liability coverage and provides financial protection in the event of an issue during the harvesting process. Cannabis cultivators also benefit from excess liability coverage. There is no set cannabis insurance for cannabis businesses, but insurers do offer comprehensive packages that together provide adequate coverage.

GreenWrap Insurance Solutions is one of the largest wholesale insurance companies that meet the specific needs of the cannabis insurance marketplace. The insurer provides coverage options for growers, consultants, seedmen, transport, retail, dispensaries, and more. They offer general liability, professional liability, product liability, property, directors and officers, and cyber/data breach coverage in addition to other insurance products.

Different sectors of the cannabis industry have different insurance needs. Having the right type of insurance in place is key to risk management and protection against financial loss.


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