Cannabis is a booming industry projected to be worth over $40 billion by 2024. With laws becoming more favorable towards the industry with each day that passes, it’s an exciting time to own a cannabis business.
With the industry expanding, many cannabis dispensaries are attempting to differentiate themselves from their competition by offering delivery services. And while you may already have a range of insurance policies that provide general protection for your cannabis business, business owners will also need commercial cannabis delivery auto insurance to put employees behind the wheel of a delivery vehicle, even if the employee owns the vehicle.
Personal auto insurance isn’t enough.
There’s a common misconception that personal auto insurance is all that’s required when driving a vehicle for business purposes. Unfortunately, if the driver gets into an accident while making a delivery, the claim will be the liability of the business.
Most personal auto insurance policies exclude coverage when using the vehicle for business purposes. Thus, if an employee had an accident while making a delivery, the employee may not receive any coverage at all, and the business is on the hook for the claim entirely.
Just as importantly, the goods within the vehicle will not be insured. That means the business owner will have to come out of pocket to cover all the product that was lost in the accident.
But wait, shouldn’t my other specialized insurance policies protect my goods?
Let’s say you purchased stock and inventory coverage to protect your goods in the event of an accident or theft. That should be enough, right? Most policies only cover property WHILE AT THE LOCATION that is insured. However, once product is in transit from one location to another, coverage may be significantly reduced or no longer apply at all.
Another factor to consider ownership of the inventory in question. A personal insurance policy might not provide coverage for goods that don’t belong to your business. For example, coverage likely wouldn’t apply if you or your employees got into an accident while delivering cannabis products for another dispensary.
Get the Right Type of Auto Insurance
If you deliver cannabis in any capacity, you need cannabis delivery auto insurance. Specifically, there are two types of coverage you need to consider – commercial auto insurance and cargo insurance (also known as property in transit).
Commercial auto policies offered by Cannabis Connect Insurance Services has a $1,000,000 limit*, and provides coverage options for employees who are using their personal vehicles for business purposes.
Commercial auto insurance provides coverage for both comprehensive and collision, covering any damage to insured vehicles regardless of fault. Furthermore, if an employee were to get into an accident with an uninsured motorist, coverage can be purchased to pay these expenses.*
That said, commercial auto insurance won’t be enough by itself to protect any cargo that may have been lost or damaged during an accident; that’s where cargo insurance factors into the equation.
Where commercial auto insurance is designed to protect the vehicle and its occupants, cargo insurance is designed to protect the products and goods being transported.
Whether you or your employees are transporting cash, cannabis flower, vape pens, or other items of value, cargo insurance will provide coverage for your goods in a worst-case scenario. In addition, a business can opt to purchase cargo insurance provides coverage for the transit of goods that don’t belong to you (if you’re running a cannabis distribution company for hire, for example).
Cargo insurance will provide coverage for lost, stolen, or damaged goods, and will pay the actual cash value of inventory lost. Also, if the cargo is irreplaceable, coverage can be added to cover the income you have lost.*
*Coverage is subject to the type of options purchased
Final Considerations
If you or your employees are transporting cannabis without proper coverage, you’re putting yourself, your employee, your cargo, and your business at serious risk of substantial financial loss. Consider the totality of the risk you face every time you or an employee climbs behind the wheel:
- Wrongful death lawsuits
- Bodily harm to employee, passengers, pedestrians
- Damage to the vehicle
- Damages and injury to the other driver
- Lost goods/inventory
The consequences are too high to get onto the road without cannabis delivery auto insurance.
We understand the need to protect your business with insurance policies specifically designed for the cannabis industry. If you’re looking for a team of specialists who can help you craft a comprehensive insurance package, contact Cannabis Connect today for a free quote.
Get an Insurance Quote
If you’re looking for a team of specialists who can help you craft a comprehensive insurance package, contact Cannabis Connect today for a free quote.
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