With federal law still holding cannabis as an illegal substance, the cannabis industry may run into roadblocks when looking to insure its business. This division in federal and state law has created specialty insurance businesses willing to work with the cannabis industry. Just like any other business, the cannabis industry requires protection from several different types of liabilities.
General liability insurance would protect a cannabis business from claims including bodily injury, property damage, and personal injury. A person can still walk into a dispensary, slip on a wet floor, and bring a “normal” claim against the company, regardless of the legal status of cannabis itself. While general liability insurance is not mandatory, it could help a business if a small accident occurs on the property. The cannabis industry should not feel a need to forgo normal business insurance due to the nature of its business. Obtaining general liability insurance could protect a cannabis business from claims for bodily harm, medical expenses, and property damage, and limit legal fees.
Product liability insurance would protect a cannabis business if a defective product is sold to a customer, involving a product which caused illness or side effects. If a cannabis business obtains product liability insurance, it could mitigate damages for claims of cannabis use causing injury to a third party, product recall, or a lawsuit for defects in the product. This is a quickly evolving area of the cannabis insurance industry, as legalization opens more roadways to lawsuits.
For more information, please read our article Can an Employee for the Cannabis Industry file for Workers’ Compensation?.
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This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.