Cannabis & Hemp Insurance
Click on the hot spots to reveal hidden areas of risk.
Visit our cannabis insurance website at:
Commercial Auto
In October 2018, a cannabis delivery truck was robbed. Three men followed the truck around Oakland as it made deliveries, and waited until the driver returned to San Francisco with tens of thousands of dollars to commit the holdup. (1)
The transportation of marijuana is a necessary part of the cannabis industry. Dispensaries have turned to delivery services to protect their product from loss. Insuring the delivery of the finished product with Delivery & Transport Insurance is a must. There are several options to insure the first party and third party from theft associated with this transportation process. Liability, Commercial Auto and property are insured against for direct physical loss due to a covered peril.
Protect your business, staff and any other hired drivers against financial responsibility in the case of a work-related vehicle accident involving injury to people or property with Commercial Auto Insurance.
1. Read Article
HVAC System
Expensive systems such as HVAC units, generators, computers and camera systems are subject to breakdown or to being damaged in the event of an electrical failure. Equipment Breakdown Coverage applies to the cost to repair or replace the equipment and any other property damaged by the equipment breakdown. Resulting business income and extra expense loss is often covered as well.
Front door & garage-style doors
Cannabis dispensaries’ security risks are significantly higher than most retail businesses given the nature of the industry, as well as the street value of what is considered a Schedule I drug by the U.S. federal government. In fact, 90% of insurance claims in the US cannabis industry involve theft.
Exterior doors should be secured and exterior cameras placed at entry and exit points, receiving door/docks, curbside pickup/customer driver lane, etc.
Vault
Crime & Theft Insurance
As an all-cash industry, vaults are a must-have to protect against security-related risks. Ideally they should be constructed of reinforced concrete with steel or all metal with no windows/or security bars across windows and a steel door with secure locking system. If product is stored in a safe it must weigh at least 800 lbs. and be bolted to the ground.
Inventory
According to the American Banking Association, roughly one in five cannabis business is burglarized. Dispensaries face both the risk of passive theft by an employee or customer making off with product while the budtender’s back is turned or smash-and-grab robberies that can involve deadly weapons.
The right product liability coverage is also critical for dispensaries and is often paired with a strong commercial general liability policy to protect your business’s commercial property, including inventory, from the perils of fire, theft, and natural disasters. If a product results in harm, illness, or unwanted side effects, a customer may hold you liable and you would need to defend your company and any potential settlements.
POS Computer
Consider the possibility of your customers’ personal data being exposed in a data breach of your sales system. That is the harsh reality of the increasing threat of cybercrime to the cannabis industry. In the event of a cyberattack, such as a data breach or social engineering attack, cyber liability enables your businesses to transfer the costs involved with recovery.
Given the value of dispensaries’ products, they are especially vulnerable to inventory hacking. Plus, most state regulations require internet-based surveillance and alarm systems: adding more entry points for hackers.
Wholesale platforms, loyalty programs, advertising, point-of-sale (POS) systems, and even employee training all require some form of technology, usually software. Putting in place a proper technology errors & omissions and cyber liability insurance program will cover a wide array of issues tied to the critical nature of software and its use.
The point of sale is typically the first point of litigation, even if you weren’t at fault for the incident. Utilizing risk transfer tools such as requesting an additional insured endorsement from your partners is critical in the cannabis supply chain. Depending on the state in which you are operating, seed-to-sale tracking technology will be required for your dispensary to operate.
Security
Adequate dispensary security requires interior key fob security entry points separating the public customer/patients and employee staff/back office restricted areas.
Properly or improperly trained staff – the budtender working behind the counter or the armed guard monitoring surveillance systems – if they are not properly trained, they can create vulnerabilities that can be hard to counter even with advanced physical and technical security measures in place.
Security Cameras
Smash-and-Grab — Around 3:00 a.m. one night, a crew of four burglars smashed a stolen Ford Taurus through the front door of a retail cannabis store in Seattle. The thieves backed the car to the curb, then ran into the store with empty duffels and black plastic bags. About one minute later they ran out of the store with the bags full of cannabis products, and drove away. The whole event was caught on video. (1)
Adequate security includes interior security cameras with a 24/7 monitoring system, motion detectors and a burglar/fire alarm connection to a central station burglar and fire alarm systems.
1. Read Article
Fire Alarm
Insurance companies often require a 24/7 central station monitored fire and burglar alarm system.
If your state’s regulations require internet-based surveillance and alarm systems, that is an entry point for a cyber attack. Cyber liability enables your businesses to transfer the costs involved with recovery.
Computer Systems
Given the value of dispensaries’ products, they are especially vulnerable to inventory hacking. Plus, most state regulations require internet-based surveillance and alarm systems: adding more entry points for hackers.
Budtender
