Cannabidiol (CBD) has taken the world by storm. Its health properties have become mainstream, and thousands of suppliers have stepped into the industry to take part in the “green rush.” If you hold a stake in this industry, there are a few factors you need to consider in regards to CBD insurance.
The need for effective risk management in the hemp industry is ever-growing. With the FDA as vigilant as ever, it’s critical to stay complaint with the law to maintain your license to sell CBD products.
Transferring risk from your business to a third party is essential to operate in this industry, potentially saving you hundreds of thousands of dollars in the event of a claim.
What you should look for in good CBD coverage:
CBD insurance is a blanket term for the various policies that fall under its umbrella. When looking for coverage, it’s essential to work with an agency that provides a wide range of specialized policies. Examples include crop insurance, product liability, general liability and workers compensation.
With most major insurance agencies not willing to work with the cannabis/hemp industry, it’s essential that you find an insurance agency that offers highly specialized insurance policies to mitigate the risks faced by your business.
What exposures and risk factors are unique to your business? It’s not enough to consider the obvious exposures such as theft and fire. You should also take stock of the risks involved with moving materials back and forth, security, and storage.
Before signing the dotted line, make sure your CBD insurance protects your business from all of your risks and not just the obvious ones.
Understand when your coverage begins and when it ends. In most instances, coverage will start when you sign the contract. However, your policy may state that your coverage doesn’t officially begin until a later date. The same is true for when your contract ends.
One of the worst things that can occur for your business is for a claim to be filed, and you find that you’re not covered due to a misunderstanding.
It’s tempting to get the cheapest policy if you’re cash strapped, but leaving gaps in your coverage is an even bigger risk. Choose the policy that covers all of your risks sufficiently without leaving room for gaps.
If someone files a claim against your business, you might find that your policy will only cover a small portion. You will have to come out of pocket to cover the rest of your policy while wishing you hadn’t been so frugal with your money in the first place.
Finding the right CBD insurance for your business
No matter how many times you read your insurance policy, you may skip over or misunderstand an essential clause in your contract. Make sure you fully understand the full terms of your CBD insurance by working with a broker who specializes in the cannabis/hemp industry.
It’s their job to decipher the nuances of the law that you may not understand, allowing you to pick the coverage that’s best suited for your business.
To allow your CBD business to thrive, you must understand the full range of available insurance policies in the market. There’s too much at stake to not get CBD coverage. With that being said, you need a company that understands the cannabis and hemp industry inside and out.
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At Cannabis Connect, our team of professionals work tirelessly to match businesses with the specialized coverage they need to thrive in the cannabis and hemp industry. We’ll put our expertise to work for you, so you can sleep soundly at night knowing your business is covered.