Medical Marijuana Dispensary 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.
Medical Marijuana Dispensary Insurance. Medical marijuana has been found to relieve the pain and suffering of many individuals with chronic and serious illnesses. As the legal cannabis industry continues gaining momentum as one of the fastest growing markets in the US, marijuana businesses are now facing certain challenges that comes with their new place in the world.
Claims and lawsuits against cannabis businesses ranging from inadequate warning labels, presence of pesticide residues in products, to unsafe handling practices during the manufacturing process are cropping up more and more.
If a consumer purchases a defective product from a retailer and becomes ill, that dispensary owner can be held liable, even if there was no prior knowledge of defects in the product. The rationale behind imposing liability on dispensary owners is that it will pressure them to vet manufacturers they do business with more carefully and only work with businesses that have a proven track record of making high quality, safe products.
Marijuana is sold for medical use only in only some of the states. The medical dispensaries are similar to drug stores. The patient must provide an identification card proving that they are eligible to receive the drug. Most stores provide a consultant who works with the patient to find the appropriate product for them.
It may be a loose-leaf product but could be liquid, oil, powder, pill, rolled or a vapor. The product may be provided as an edible or it may be butter infused with marijuana that the patient can use when making his or her own edibles. Additional accessories may be available in the shop.
In states where recreational use is permitted the shops are similar to the medical marijuana dispensary, but customers are not required to provide marijuana identification cards. These stores are more similar to liquor or vape stores.
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.
Whether it is a slip & fall claim at your actual marijuana dispensary, a product liability claim from consumption of the cannabis and other products you sell, or protecting your business from fire or theft claims, medical marijuana dispensary insurance can offer the necessary insurance protection to help you recover from any of these unexpected losses.
Medical marijuana dispensary insurance protects your cannabis shop from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked medical marijuana dispensary insurance questions:
- What Is Medical Marijuana Dispensary Insurance?
- How Much Does Medical Marijuana Dispensary Insurance Cost?
- Why Do Medical Marijuana Dispensaries Need Insurance?
- What Factors Do Medical Marijuana Dispensaries Need To Consider About Insurance?
- What About Mobile Cannabis Dispensaries Insurance?
- What Type Of Insurance Do Medical Marijuana Dispensaries Need?
- What Does Medical Marijuana Dispensary Insurance Cover & Pay For?
What Is Medical Marijuana Dispensary Insurance?
Medical marijuana dispensary insurance is a type of insurance coverage specifically designed for medical marijuana dispensaries. It protects the dispensary from various risks and liabilities that may arise during their operation. This includes coverage for property damage, theft, product liability, employee injury, and legal defense costs in the event of a lawsuit. The insurance policy can also provide coverage for loss of revenue due to business interruption and provide coverage for damages and injuries resulting from the use of marijuana products.
How Much Does Medical Marijuana Dispensary Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small medical marijuana dispensary ranges from $97 to $159 per month based on location, size, payroll, sales and experience.
Why Do Medical Marijuana Dispensaries Need Insurance?
"Do I really need insurance to protect my medical marijuana dispensary? Is it necessary? What are the advantages of having insurance? Is it worth it to pay for insurance?"
Well, if something were to happen to your dispensary business or your medicine such as a fire or theft, would you be ready to pick back up and get your business started again without monetary stress? No.
That's why medical marijuana dispensary insurance is important: you need to protect yourself and your business from losing money in the event of misfortune.
What Factors Do Medical Marijuana Dispensaries Need To Consider About Insurance?
If you are in the process of getting your cannabis dispensary opened, there are several things you will want to consider in regards to insuring your location:
- Will you need coverage for business personal property such as computers, registers, furniture, display cases, etc.?
- How much coverage will you need for your supplies/inventory, cannabis, edibles and other marijuana related products?
- What percentage of your inventory is going to be displayed for customers?
- Are you going to be renting a location that is ready to go or are you going to have to spend money to build out your space (tenant improvements)? Do you want coverage for these improvements?
- What type of security measures do you plan on having? Security doors? An intercom system? Metal detectors? Cameras inside and outside the store? A monitored alarm system? Armed or unarmed security guards?
- Will you have weapons on the premises?
- Will you have a safe? If so, how much will it weigh? What is its fire rating and will it be bolted to the ground?
- Will you have a grow room?
- Will you offer a delivery service or transport your medical marijuana and/or supplies?
- Will you be offering services which complement the dispensing of cannabis such as massage, acupuncture, selling herbal remedies, etc...?
All of the above questions need to be taken into consideration when purchasing medical marijuana dispensary insurance.
What About Mobile Cannabis Dispensaries Insurance?
In the past couple of years, we've seen the legal cannabis industry continue to grow tremendously. It is one of the fastest-growing markets in the United States, but with growth comes a laundry list of challenges.
Mobile cannabis dispensaries similar to regular cannabis dispensaries face a barrage of lawsuits and claims, ranging from the presence of pesticides in the end product to inadequate warning labels. Some lawsuits highlight unsafe handling practices, mainly during the manufacturing process.
Whether it is your mobile marijuana dispensary hitting a pedestrian, another vehicle, or selling an inadequate product, to theft and fire destroying your property, you need to be protected from financial liability just like any other business.
Is Your Mobile Cannabis Dispensary Protected?
Let's face it, just like a natural disaster, a lawsuit, accident, or any other event can disrupt your business temporarily or even permanently. It isn't uncommon for businesses that didn't have adequate coverage to be struck by a lawsuit that they go out of business. That's why it is so important that businesses be protected, especially financially.
Think about what would you do if something happened to your Mobile Cannabis Dispensary, if it was destroyed in a fire, or everything inside was stolen? Do you have the financial padding needed to get your business back up and running without putting yourself under financial stress? Well, most probably, you don't.
That's why mobile cannabis dispensaries need to be insured. Not only will it protect your business but also you from going bankrupt if there is a problem.
Understanding Mobile Cannabis Dispensary Insurance
One of the most common misconceptions, mainly spread by so-called experts who don't understand the industry, is that Mobile Cannabis Dispensaries are expensive to insure. Some even go so far as to say that it is very expensive and most can't get insured. However, if you look at it objectively, that isn't the case.
Mobile Cannabis Dispensaries will need quite a few different insurance policies, including:
- Product liability insurance: You probably heard of businesses getting sued because their product had an unexpected reaction. Also, it isn't uncommon for patients to sue companies, making claims that the medicines harmed them. Unfortunately, this is very common, and even a false claim can win. Product liability insurance provides your mobile cannabis dispensaries with the protection it needs from lawsuits. The insurance product you buy will cover smoking devices, edible marijuana, and vaporizing tools.
- General liability: mobile cannabis dispensaries can get general liability protection for up to $5 million and, in some cases, even more. If anything, it will help protect the company and yourself from injuries and damages. You may also need mandatory general liability coverage in certain states, and in many states, the laws may change sooner rather than later as regulations are being drafted. We foresee it (general liability insurance) becoming a requirement for state licenses sometime soon.
- Medicine insurance: Your inventory will also need to be covered against the risk of theft and fires. A good mobile cannabis dispensary insurance will ensure that your inventory is protected in the event of a fire, theft and when the product is in transit.
- Property insurance: Your business's property must be protected. A solid policy can offer your property the protection it needs to restore its inventory, fixtures, equipment, etc.; if you have an insured mobile marijuana dispensary, it will ensure that you can get back on your feet sooner and easier if there is damage.
- Business income insurance: Some mobile cannabis dispensary insurance policies will also cover your income and additional expenditures. Business income is defined as the net income your business would have produced if there wasn't a fire, theft, or accident. It would often cover extra expenses that the business would incur, like if the vehicle or mobile unit had issues with it.
- Vehicle insurance
All of these, when lumped together, make sure mobile marijuana dispensaries are comprehensively covered. Furthermore, it will help your business continuously stay on its feet in the event of an unforeseen calamity.
What Type Of Insurance Do Medical Marijuana Dispensaries Need?
Medical marijuana dispensary insurance can provide you with the protection you need, protecting you from risk if your business undergoes some type of incident. It's a common misconception that cannabis business insurance is very expensive and unattainable, but it is actually very reasonably priced. It can provide you with many types of insurance coverage, including:
General Liability - General liability insurance will help your company protect itself inclusively and includes damages and injuries, which is especially important when it comes to finding a good cannabis business insurance plan. General liability is almost certainly required by your landlord, and as the state laws continue to adjust and new rules and regulations are written, it is becoming a requirement for state licenses.
Business Property Coverage - Protecting your business's property is very important. This coverage provides you with property protection to restore your business' inventory, furniture, fixtures and equipment and cover tenant improvements, just to name a few. Purchasing a medical marijuana dispensary insurance plan will help you get back on your feet much quicker and easier in the event of property damage.
Medicine Coverage - This insurance can provide your cannabis dispensary with inventory coverage against risks such as fire and theft. It also offers coverage during the risky time when your product is in transit from the cultivation facility to your dispensary.
Business Income - Medical marijuana dispensary insurance also covers your business' income and additional expenditures. Business income means the net income that you would have realized if your business hadn't suffered fire, theft or another covered claim. This can also include the extra expenses faced by your business in the event that you must move it to another location.
Product Liability - How many times have you heard of businesses getting sued due to unexpected reactions to their products? How many patients have tried to sue different companies by making claims that certain medicines have affected them negatively? Unfortunately, this is all too common. Sometimes, even false claims end up winning.
That's why you need product liability that will protect you from lawsuits. Edible marijuana, vaporizing tools, smoking devices and dispensaries are all covered by product liability insurance.
Commercial Auto - The transport and delivery of medical marijuana and related products poses challenges unique to the cannabis industry. Don't risk your inventory with inadequate auto coverage. There are commercial auto coverages specifically for medical cannabis businesses.
Equipment Breakdown - This provides coverage for loss due to mechanical or electrical breakdown of nearly any type of equipment, including computers used in your dispensary. Coverage applies to the cost to repair or replace the equipment and any other property damaged by the equipment breakdown. Resulting business income and extra expense loss is often covered as well.
Cannabis Dispensary Risks & Exposures
Premises liability exposure is like other retail stores except for the need for extra security due to the value of the product. 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.
Products liability exposure will depend on the supplier and the type of services provided to the customer. If the dispensary is only providing a legal product, the exposure is limited. However, if the dispensary is providing lab services that certify potency and lack of pesticides and other harmful ingredients, the exposure increases significantly. The consultative role of the employees can also increase the dispensary,s product liability. The products exposure increases if the dispensary supplies its own product.
Workers compensation exposure can be significant because of the value of the product and the amount of cash on hand. Appropriate security must be provided, and training provided employees in preventing injury. Appropriate ventilation of the dispensary 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 are those of a retail store with a very valuable product, similar to liquor or jewelry stores. The products are highly combustible and easily contaminated by smoke, temperature changes, and humidity. They 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.
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 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 is generally limited hired non-owned of the employees running errands. This could increase if the dispensary offers delivery service or if it picks up product from its suppliers. If the product is in the vehicle with the driver, adequate ventilation is important to prevent driving impairment.
Medical Marijuana Dispensary Insurance - The Bottom Line
As the owner of a medical marijuana dispensary, you have additional regulations and legal issues to deal with in addition to the daily responsibilities and duties all businesses have. Protect your investment and all of the hard work you've invested with the right insurance.
What Does Medical Marijuana Dispensary Insurance Cover & Pay For?
Medical marijuana dispensaries can be sued for a variety of reasons, including:
Product Liability: If a patient suffers harm or injury from a product sold by the dispensary, such as a contaminated or mislabeled product, they may file a lawsuit against the dispensary. Dispensaries can purchase product liability insurance, which provides coverage for lawsuits related to product defects or injuries caused by a product. This insurance can cover legal fees, settlements, and judgments.
Security Issues: Medical marijuana dispensaries are sometimes targets of theft or burglary, which can result in physical harm to employees and customers or loss of property. Dispensaries can purchase commercial property insurance, which provides coverage for theft, burglary, and other property damage. This insurance can cover the cost of repairing or replacing stolen or damaged property, as well as the cost of any injuries sustained by employees or customers.
Employment Issues: Dispensaries may face employment-related lawsuits, such as wrongful termination or discrimination claims. Dispensaries can purchase employment practices liability insurance, which provides coverage for lawsuits related to wrongful termination, discrimination, and other employment-related claims. This insurance can cover legal fees, settlements, and judgments.
Regulatory Violations: Dispensaries must comply with state and local laws and regulations. If a dispensary is found to be in violation of these laws, they may face fines or lawsuits. Dispensaries can purchase regulatory liability insurance, which provides coverage for fines and lawsuits related to regulatory violations. This insurance can cover the cost of fines and legal fees associated with defending against regulatory violations.
Medical marijuana dispensaries can be sued for a variety of reasons, including: Overall, insurance can help medical marijuana dispensaries protect themselves from lawsuits and the associated costs. It's important for dispensaries to work with an insurance provider who understands the unique risks and challenges faced by the cannabis industry.
Additional Resources For Medical Insurance
Discover small business insurance for medical and dental professionals. Medical malpractice insurance is a type of professional liability that protects health care professionals from liability causing in bodily injury, medical expenses and property damage.
- Ambulatory Surgical Center
- Art Therapy
- Assisted Living Facilities
- Blood Banks
- Dental Lab
- Dental Office
- Diagnostic Imaging Centers
- Health Maintenance Organizations
- Healthcare Facilities
- Home Medical Equipment Dealers
- Marriage & Family Therapy
- Medical Clinics
- Medical Laboratories
- Medical Marijuana Dispensary
- Medical Practice
- Medical, Surgical & Hospital Supply Store
- Mental Health Counseling
- Nurse Registry
- Occupational Therapy
- Osteopathic Physicians
- Physicians Office
- Plastic Surgeons
- Skilled Nursing Facilities
- Speech Therapy
- Substance Abuse Counseling
- Telemedicine Business Insurance
- Specialty Medical Centers And Clinics
- Specialty Medical Malpractice
The medical industry is a crucial sector that plays a vital role in ensuring the health and well-being of individuals. It is a complex and highly regulated industry that requires specialized knowledge and expertise. As a result, the medical industry is exposed to a variety of risks, including legal and financial liabilities.
One of the main reasons why the medical industry needs commercial insurance is to protect against medical malpractice. Medical malpractice occurs when a healthcare provider deviates from the standard of care and causes harm to a patient. It can lead to costly lawsuits and significant financial losses for the healthcare provider. Business insurance helps to cover these costs and protect the financial stability of the medical facility.
Another reason the medical industry needs business insurance is to cover the cost of regulatory fines and penalties. The medical industry is subject to strict regulations and any violations can result in significant fines and penalties. Business insurance helps to cover these costs and protect the financial stability of the medical practice or facility.
In addition, the medical industry is vulnerable to data breaches and cyber attacks. These incidents can result in significant financial losses and reputational damage for the medical facility. Business insurance helps to cover the cost of recovering from a data breach or cyber attack and helps to protect the reputation of the medical facility or practice.
Overall, business malpractice insurance is an essential component of the medical industry. It helps to protect against the financial and reputational risks associated with the medical industry and helps to ensure the financial stability and success of medical practices and facilities.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Computers, Physicians and Surgeons Floater, Valuable Papers and Records, General Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Computer Fraud, Forgery, Cyber Liability, Employment-related Practices, Business Automobile Liability and Physical Damage and Stop Gap Liability.