CBD Oil And Hemp Insurance Policy Information
DISCLAIMER:: Marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such it remains a federal crime to grow, sell, and/or use marijuana. Any content contained herein is not intended to provide legal advice or to assist with violation of any state or federal law.
CBD Oil And Hemp Insurance. From aches and pains to anxiety relief, CBD oil has been touted as an all-natural cure-all. Because of the vast ailments that it can help to ease, and since there are very minimal side effects, countless people are turning to CBD oil as an alternative treatment for a variety of conditions.
Given the increased demand for CBD oil, you might be thinking about starting up your own business, either manufacturing or selling it. It can certainly be a lucrative business opportunity; plus, operating a business that offers CBD products can be very gratifying, as you'll providing the public with a product that can help them in a myriad of ways.
If you're thinking about starting up a CBD oil business, there are a number of things that you need to keep in mind so that you can set yourself up for success. One of the most important factors that you need to consider is insurance. Like any industry, there are a number of risks that can be associated with making or selling products that contain CBD oil.
Why do CBD manufactures and distributors need commercial CBD oil and hemp insurance? What type of coverage should they carry? Read on to find the answers to these questions so you can keep your business, your clients, your employees - and yourself - protected.
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Why Insurance Is Important For CBD & Hemp Manufacturers And Distributors
Despite your best attempts to offer the highest quality products and to ensure that your place of business is safe for your employees and clients, there is always a chance that something will go awry. If you sell CBD products, a client could have a bad reaction; or, if you run a facility that manufacturers CBD oil, an employee could be injured on the job, or a vendor could slip and fall while making a delivery.
These are just some of the problems that could occur. In the event that something does go wrong - a client sues you, an employee is injured, or your commercial space is vandalized or damaged in a fire, for example - you'll be legally responsible for covering the costs that are associated with mishaps.
Legal defense fees, settlements, repairing or replacing damaged or stolen property, and medical bills can be quite expensive; but, as the proprietor of your establishment, you will have to pay for these types of expenses. If you have the right type of insurance coverage, you avoid paying such exorbitant costs out of your own pocket. Instead, in exchange for paying your premiums, the company that carries your insurance policy, will cover the expenses, up to the limits of your policy.
In other words, CBD oil and hemp insurance insurance can help you avoid financial ruin; not to mention the fact you're legally required to carry certain forms of commercial insurance.
Types Of Insurance Coverage for CBD & Hemp Manufacturers and Distributors
What type of CBD oil and hemp insurance should you carry if you are making or selling CBD and hemp products? There are several different types of coverage that you should invest in, but the following are the most important:
- Commercial General Liability - If a client claims that your product caused them harm and sues you, or if a vendor slips and falls on your property and files a suit, commercial general liability insurance will cover the expenses for you. This type of insurance will assist with legal defense fees, settlements, and any medical bills that you are responsible for.
- Commercial Property - Your warehouse or store could catch on fire, or someone could vandalize it and steal equipment and inventory. In these types of situations, commercial property insurance will help to pay for the damages and repairs to your building, as well as the cost of replacing any lost or stolen items.
- Workers compensation - If any employee sustains a work-related injury, you, the employer, will have to pay any medical care that's require, as well as cover the cost of lost wages, and possibly more. Workers' comp insurance covers these types of expenses. It pays for medical care that an employee may require, replaces the wages that he or she lost while recovering, and can even help to pay for legal defense if the employee decides to sue.
These are just some of the different types of CBD oil and hemp insurance coverage that CBD oil manufactures and sellers should carry.
CBD Oil Derived From Marijuana Risks & Exposures
The legality of CBD can vary from state to state and federally, but in general, one of the main determining factors is whether the CBD is derived from hemp or marijuana. The 2018 Farm Bill legalized the cultivation and transportation of cannabis products, including CBD oil, on a federal level - as long as the hemp being grown and transported contains 0.3% or less of the cannabinoid THC.
Introduction: Marijuana products manufacturers start with raw cannabis leaves. The stem is removed from the leaf and the leaf is cleaned and cured. Curing involves drying the leaves and sometimes adding flavoring agents. Additional processing converts the leaf into a liquid, loose-leaf, oil, powder, pill, rolled or vapor form that can be sold.
Some manufacturers develop creams, lotions, and other topically applied products that are infused with marijuana. Others may develop edibles that are made with marijuana-infused butter. As marijuana becomes more normalized, additional products will be developed.
Some research indicates that marijuana is useful in pain relief for conditions such as chemotherapy-induced nausea, glaucoma, multiple sclerosis, and neuropathy, and as an appetite stimulant for such disorders as AIDS wasting syndrome. However, the FDA has not approved it for any type of medicinal or recreational use as no studies have been done in clinical trial settings. Conducting clinical research involves the FDA along with the DEA (Drug Enforcement Administration) and the NIDA (National Institute on Drug Abuse). Concerns have been expressed as to the lack of consistency in drug purity and potency, impact on fetuses by pregnant women, and long-term usage implications such as drug dependency.
Currently, over half of the states have approved the use of medicinal marijuana under specifically defined circumstances, while nine states have approved its recreational use in small quantities. Manufacturing and distribution guidelines vary by state, as well as the form in which the product may be sold. However, the federal government continues to criminalize the growth, cultivation, and use of marijuana regardless of the circumstances. It is unclear how the differences in state and federal law will ultimately be resolved.
Premises liability exposure is normally low due to limited access by visitors. If tours are offered, visitors may be injured by slips, trips, or falls, or may be exposed to toxic or caustic chemicals. Floor coverings should be in good condition, no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Enough exits must be provided and be well marked, with backup lighting systems in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. If the business is open after dark, there should be adequate lighting and appropriate security for the area. Toxins released in a fire or fumes, spills or leaks from chemical tanks may cause serious injury or property damage to neighboring properties.
Products liability exposure is currently unknown as no long-term scientific studies have yet been completed evaluating the effects of marijuana on human health. There could be serious adverse impacts as users tend to hold the smoke in their lungs longer than tobacco smokers. However, tobacco products receive a federal exemption from most types of product liability claims as tobacco has been a known carcinogen since the 1960's.
Such an exemption is not available for marijuana manufacturers. A concern with edibles is that they are visually indistinguishable from non-marijuana infused products and packaging is attractive to children.
Environmental impairment exposures are moderate. Sudden or cumulative discharges of chemicals used as additives (which may be toxic or combustible or both) may contaminate air, surface or ground water, or soil. Disposal procedures must adhere to all EPA and other regulatory standards.
Workers compensation exposure may be high. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, hearing loss from machinery noise, and back injuries from lifting. Employees should be provided with safety equipment, trained on proper handling techniques and have conveying devises available to assist with heavy lifting. Flammable liquids and chemicals can cause skin and eye irritation.
Cumulative exposure to marijuana dust may create a potential for lung and respiratory diseases and injuries. Drivers of forklifts and vehicles may be injured in accidents. Appropriate ventilation of the facility is crucial because of the potential impairment of employees due to exposure to the product that may contribute to accidents and possible long-term health issues.
Property exposures include offices, drying facilities, processing areas, and warehouses for raw marijuana and finished goods. Ignition sources include electrical wiring, heating and air conditioning systems, dryers, and production machinery. The large draft spaces in storage warehouses can contribute to the spread of a fire. Chemical additives may be highly flammable and add to the fire load. Accumulations of dust can result in explosions. This hazard increases in the absence of well-maintained dust collection systems.
Raw goods and finished products, which are highly combustible and easily contaminated by smoke, temperature changes, and humidity, are also targeted by thieves due to the high resale value in the black market. Vandalism can result from trespassers and protestors. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Equipment breakdown exposures include breakdown losses to production equipment, dust collection and ventilation systems, electrical control panels, and other apparatus. Breakdown and loss of use to the conveyor and other production machinery could result in a significant loss, both direct and under time element.
Crime exposures are chiefly from employee dishonesty and theft of money and securities due to the high resale value of marijuana products on the black market. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), goods in transit, and valuable papers and records for customers' and suppliers' information as well as quality control testing results. Backup copies of all records should be made and stored off premises. Goods in transit may be damaged by fire, theft, collision and overturn, or contamination.
Commercial auto exposure may be moderate if the manufacturer transports raw materials or finished products. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location. If the product is in the vehicle with the driver, adequate ventilation is important to prevent driving impairment.
CBD Oil And Hemp Insurance - The Bottom Line
To learn more about the policies you should invest in and how much CBD oil and hemp insurance coverage you should carry, speak with a reputable insurance broker.
Small Business Economic Data & Insurance Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. Maybe you want to contribute to the economic growth of your community. Whatever the reason is, if you're thinking about starting a small business, it's important to understand pertinent information relating to small businesses in the United States; namely economic information and insurance regulations. After all, if you want your small business to succeed, you have to understand the economic trends organizations of a similar size in your area.
Likewise, you want to ensure that your small business is well protected with the right business insurance and that you are in compliance with the rules and regulations that pertain to commercial insurance in your region.
Read up on economic statistics and insurance information that relates to small business owners in the United States.
Small Business Economic Data In The United States
Here's a look at some information that was compiled by the Small Business Association (SBA) regarding the economic data that pertains to small businesses in the United States:
- In 2015, small businesses in the United States employed an estimated 58.9 million American workers, or 47.5 percent of the nation's private workforce.
- Largest shares = fewer than 100 employees. The small businesses that employed 100 people or less had the largest share of employment amount small businesses.
- Employment increased by nearly 2 percent. In 2018, employment amongst small businesses increased by 1.8 percent, which is an increase of 1 percent from the prior year.
- Increase in proprietors. In 2016, the number of small business proprietors increased by 2.3 percent.
- In 2015, small businesses were responsible for creating 1.9 million net jobs. Organizations that employed 20 people or less had the largest gains, as they added an estimated 1.1 million net jobs.
- There were 5.7 million loans that were value less than $100,000 issued by lenders in the United States in 2016. These loans were issued under the Community Reinvestment Act.
- Small business owners that were self-employed at the incorporated businesses that they owned reported a median income of $50,347 in 2016.
- Small business owners that were self-employed at the unincorporated businesses that they owned reported a median income of $23,060 in 2016.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage. The SBA recommends the following insurance plans for small business owners:
- Commercial Property Insurance: In the case of an unplanned disaster - fire, flood, vandalism, theft, etc. - this type of coverage will help you avoid paying for the damage out of your own pocket. Even if you rent the property, you should still carry commercial property insurance.
- Commercial Liability Insurance: In the event that a legal situation arises - a negligence lawsuit, for example - commercial liability coverage will provide financial protection. It will cover the cost of legal defense fees, court fees, and even moneys that may be awarded.
- Commercial Auto Insurance: If you operate a vehicle for any activities that are related to your business - transporting and/or delivering goods, or meeting with clients - commercial auto insurance is legally required for businesses of all sizes, including small businesses.
Additional Resources For Manufacturing & Wholesaler Insurance
Read informative articles on small business manufacturing and wholesale insurance. Manufacturing and wholesale companies face many risks due to the nature of their business operations.
- Canned Fruit & Vegetable Manufacturers
- CBD Oil And Hemp
- Machine Shop
- Product Liability
- Wholesaler Distributor
For manufacturers and wholesalers, having the proper coverage is very important. You will need Products/Completed Operations Liability Coverage to protect you against injuries or property damage cause my the products you make or sell.
Manufacturing is an extremely broad category that includes countless potential hazards and exposures in virtually all coverage areas. Because of this, every individual manufacturer is unique and a specific risk survey of every operation is advisable.
The basic insurance needs for every class of business or operation includes property coverage for buildings, machinery and equipment, as well as for raw stock and finished products. Liability insurance for premises exposures is important but products liability insurance presents greater concerns so these exposures and coverage needs must be evaluated carefully.
In addition, protection for injuries to workers, environmental coverages and automobile insurance are priority items.
Wholesale and distribution operations have many of the same physical damage and property coverage concerns as warehouse operations. In both, the value of both real property and stocks of merchandise is very high. Loss control and other techniques appropriate to the types of merchandise involved are needed. For these reasons, adequate and appropriate property insurance coverages are important.
The commercial auto exposure can also be significant, based on the extent of merchandise delivery. In addition, transportation or motor truck cargo insurance on the merchandise must also be arranged.
Employee theft is always an issue and can be a significant exposure, depending on the type of property involved. Finally, the types of merchandise and material handled makes workers compensation insurance another very important coverage.
What does the insured does that could result in a covered loss? The insuring agreement only requires that the insured be legally obligated to pay damages for injury to others or damage to their property included within the products-completed operations hazard covered by the insurance.
Because of this, every product manufactured and completed operation exposure for each named insured must be determined, described and evaluated to be certain that each represents acceptable exposures, or are acceptable classes of business to the insurance company providing coverage.
Once the extent of all business activities and operations is determined, the process of identifying hazards begins. The first step in the process is completely listing and describing all current products being manufactured and projects being worked on.
The next step is obtaining the same information for discontinued products and completed projects for the past five to 10 years, depending on the products or projects involved. This should include an explanation of why the products were discontinued. If some completed projects were of a different type than those currently being worked on, an explanation is in order, including whether the insured may resume them in the future.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Bailees Customers, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.