Excess Insurance for Cannabis Businesses
What is Excess Liability Insurance?
Excess liability insurance is a way for you to provide coverage for your business in the event of catastrophic losses. Rather than increasing the limits of each insurance policy, you can purchase an excess policy which will provide additional coverage over your other insurance policies.
Excess policies are a cost-effective way to offer higher limits for your business and protect you from catastrophic losses.
What businesses should consider excess liability insurance?
Excess liability insurance is designed to provide coverage for underlying liability policies that have reached their limits. As such, any cannabis operation that has a liability insurance policy should consider investing in excess liability insurance to guard against catastrophic loss.
For instance, if you’re found liable for $4 million in damages, but your policy only covers $2 million, you can make a claim on your Excess Liability policy to cover the difference.
What is Included in Excess Liability Insurance?
Excess Liability insurance can provide coverage for the following situations:
- Litigation related to your business
- Bodily injury and property damage
- Additional protection for the various policies you already have in place
What are the benefits of having Excess Liability Insurance?
Provides an Extra Layer of Liability for your Primary Insurance Policy
While you should always plan for the worst by investing in insurance designed to protect your business from litigation, there’s nothing wrong with having a backup just in case you exceed your policy limits. In most instances, Excess insurance will cover claims that are covered under your primary liability insurance policies.
Protect Your Assets
Many cannabis businesses have extensive assets to protect. If a lawsuit should not rule in your favor and the monetary payouts are large, you may be asked to sell off assets to cover the award. Excess Liability insurance helps you avoid this situation, allowing you to protect the assets needed to keep your business running smoothly.
Provides Extra Protection for High Claim Industries
The cannabis industry is no stranger to litigation. Cannabis business owners should always be on their guard against a potential lawsuit, and Excess liability insurance allows them to be prepared for any scenario that should present itself.
Tips for Choosing Excess Liability Insurance
Is defense covered outside the limit?
Your insurance policy should explicitly state that the insurer will pay defense fees in addition to the policy limit. This is imperative because court fees are often very high. If the court fees have a significant impact on your insurance limit, you may have little to no coverage to cover damages.
Talk with your insurance agent to ensure you’re fully covered to meet the needs of your business.
Find What’s Excluded from your Insurance Policy
Before signing the dotted line, always check to see what’s excluded from your policy. For instance, if you have General liability and Cargo insurance, your Excess liability policy should include these coverages, amongst other policies relevant to your business.
Work with an Experienced Insurance Broker
While most insurance brokers can provide the necessary legwork to provide coverage for your business, they may not understand the nuances of the cannabis industry. As such, they may not provide the guidance needed for your business to avoid legal trouble. Select an insurance broker who understands the cannabis industry so they can tailor an insurance policy perfectly suited to your needs.
Get an Excess Liability Insurance Quote
For a quote or to learn more about excess liability insurance, reach out to us today.
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