Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a medical marijuana shop.
This article will discuss the primary insurance coverage for medical marijuana shops, general liability insurance, as well as additional policies that are appropriate for this industry.
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Medical Marijuana Dispensaries Need General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
Common Situations That A Medical Marijuana Dispensary’s General Liability Insurance May Cover
Example 1: While using your bathroom, a client stumbles on a damp floor and falls to the ground. His arm is broken as a result of the incident, and he needs medical attention. His injuries will most likely be covered by your general liability insurance coverage.
Example 2: One of your staff is transporting a stack of boxes containing edibles from a delivery van into the shop when the dolly accidently collides with a customer’s expensive sedan. The automobile was extensively damaged in the crash. The cost of fixing the automobile will most likely be covered by your general liability insurance policy.
Example 3: One of your clients is enthralled by some of the latest goods in your display case and leans too strongly on the glass, causing it to shatter and their hand to fall through. The consumer has lacerations that need medical attention. The consumer sues your company, alleging that you are liable for his injuries. Your legal fees for defending oneself in a lawsuit are covered by a general liability insurance policy. You also have coverage for the payment of a settlement if the matter is settled out of court.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
In America, the typical medical marijuana shop pays between $350-$750 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Medical Marijuana Dispensaries
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all medical marijuana retailers should have are as follows:
Insurance for Commercial Property
In the case of a covered occurrence, such as a fire or severe weather, commercial property insurance covers the cost of repairing or replacing equipment, inventory, and any owned real estate. Even if you don’t own the facility where you operate, the expense of replacing damaged or destroyed goods or equipment might be substantial.
Insurance for Workers’ Compensation
If you have employees, the state in which you conduct business will almost certainly require you to have workers’ compensation insurance. Workers’ compensation protects both your employees and your organisation in the event of a work-related accident. Your coverage will cover the employee’s medical care in the case of such an accident. It will also assist to cover the employee’s lost salary when he or she is unable to work due to the injury.
Insurance for Product Liability
Even if you do your best to guarantee that all of your medical marijuana goods are of high quality, one of your clients may allege that a product you sold caused them harm. If a consumer believes that one of your items caused him or her damage and initiates a lawsuit against your company, defending yourself might be pricey. However, with product liability insurance, you are protected by your insurer. If you are sued because of a product-related damage, your insurance will cover your legal bills, as well as any payment if you reach an out-of-court settlement.
Coverage Options for Medical Marijuana Dispensaries
In addition to the policies listed above, your medical marijuana shop may need other forms of coverage based on particular features of your activities. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance Against Crime
Medical marijuana shops may become victims of criminality, both from outsiders and from their own staff. Crime insurance provides financial protection regardless of who commits the crime. For example, if a big portion of your inventory is stolen, your crime insurance coverage should assist to cover part of the expense of replacing it.
Insurance for Data Breach
In the case of a cyberattack, data breach insurance may help secure your dispensary. For example, if a cybercriminal breaks into your system and steals customer information, some of those consumers may initiate legal action against your company. If you have data breach insurance, it will cover the cost of your legal bills as well as any settlements that you may be compelled to pay.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.
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