The post What is Cannabis Property Insurance? by Alison Plaut appeared first on Benzinga. Visit Benzinga to get more great content like this.
If you’re building a business based on cannabis production, distribution or sales, cannabis property insurance is essential. Any small business needs property insurance, but a cannabis business has additional considerations, from inventory to equipment and business interruption. Read on to understand how to protect the assets of your cannabis business.
Key Takeaways
- Specialized insurance coverage for cannabis properties is essential to protect against risks such as theft, vandalism, equipment breakdown, and crop loss.
- Working with an experienced insurance provider who understands the needs of the cannabis industry is crucial for obtaining comprehensive and tailored coverage.
- Risk management strategies, such as implementing security measures and conducting thorough property inspections, can help cannabis businesses reduce the likelihood of insurance claims and lower insurance costs.
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Understanding Cannabis Property Insurance
Cannabis property insurance combines commercial real estate insurance with other types of business insurance like inventory protection or crop insurance. Cannabis insurance can also be a type of small-business insurance policy customized to address the risks specific to the cannabis industry and the type of business. Your cannabis business insurance will typically cover property damage resulting from accidents or natural disasters, crop failure, theft, equipment damage and workplace injuries.
What Does Property Insurance for Cannabis Businesses Cover?
Insurance for cannabis businesses can be customized to fit the business. For example, a dispensary might require different coverage than a testing lab or grower. Below is an overview of the main types of insurance a cannabis business will need.
Property Damage Coverage
Commercial property insurance can help your business recover financially in the case of fires, theft, vandalism and other damage or loss to the business premises or property. This type of coverage is a commercial property insurance plan that typically covers physical structures but does not cover the building contents. For that, you’ll also need inventory protection.
Inventory Protection
Inventory protection insurance covers your physical cannabis inventory and any other products marketed by your business. This coverage protects your company in case of theft, vandalism or other damage. It is a way to ensure your company is protected even if the worst happens. Generally, inventory protection only applies to finished products and equipment stored in inventory. If you need coverage for a crop, you’ll need to get crop insurance.
Equipment and Machinery Coverage
Cannabis equipment coverage is a type of insurance you can get to protect the machinery and tools used at your cannabis cultivation facility or for cannabis production. This may also include heavy equipment or trucks used to transport the cannabis, although that may be covered by commercial auto insurance. Equipment and machinery coverage will cover the cost to repair or replace equipment damaged because of fire, theft, vandalism, natural disasters or equipment that simply breaks down.
Business Interruption Coverage
Business interruption or income coverage can help you offset lost income if your business is forced to close temporarily. Usually, this type of insurance will list covered perils and will only pay if the reason for closure is a covered peril. For example, it might cover business interruption resulting from property damage, equipment damage, inventory damage, natural disasters such as hurricanes or other specific situations.
Other Types of Insurance Coverage to Consider
In addition to property insurance, you should also consider the following if you’re a cannabis business property owner or tenant.
General Liability
General liability, or commercial general liability (CGL) insurance, protects a business’s products and property from liabilities. It should cover your cannabis business for issues arising from bodily injury, personal injury and property damage. Damage from a business’s operations or products or injuries that happen on the business’s premises are usually covered under general liability insurance. Average costs are just $42 per month for small businesses.
Workers’ Compensation
Workers’ compensation insurance is required in 49 out of the 50 states. Unless your business operates exclusively in Texas, you’ll be legally required to carry this insurance if you have employees. Workers’ compensation insurance provides cash benefits or medical care for workers injured or who become ill because of their jobs. Workers’ compensation insurance costs an average of $45 per month.
Professional Liability Insurance
Professional liability insurance, also called errors and omissions insurance, protects you from liability in case of professional mistakes. Physicians prescribing cannabis, dispensaries, distributors, testing labs and growers can all benefit from professional liability insurance. Average costs are $61 per month, but that varies by business type and activities, coverage limit and terms.
Commercial Auto Insurance
Commercial auto insurance covers your business vehicles and may include any heavy vehicles or farm equipment owned or operated by your cannabis business. It is designed to protect your company in case of potential loss from vehicle damage, theft or liability while employees drive the vehicles. Commercial auto insurance averages $147 per month. However, this can vary widely based on the number of vehicles, their make, model, age and condition.
Surety Bonds
Surety bonds are a type of insurance that guarantees your cannabis business will fulfill the terms of its contracts and pay its suppliers. Many states require cannabis businesses to get surety bonds as part of licensing. You can check your state requirements and compare costs to decide whether they make sense for your cannabis business.
How Much Does Property Insurance Cost?
According to Insureon, small businesses pay an average commercial property insurance premium of $67 per month or about $800 per year. Its data suggests that 62% of customers spend $100 or less for coverage. Your property insurance costs will vary based on the type of coverage, specific plan, property size, inventory volume and specific business risks.
How to Apply for Property Insurance
If you already have business insurance, you can contact your insurer to inquire about additional insurance needs. If not, the step-by-step process of applying for property insurance is simple:
- Research: Research property insurance for your cannabis insurance online. Many sites will let you compare rates for your property before contacting the lender directly. Or, start by looking at the best cannabis insurance companies here.
- Apply: You can apply for insurance by filling out a form with information about your business, registration, proof of your ownership, number of employees, estimated business revenue and contact information. You can also work with an insurance agent.
- Compare: It’s a good idea to apply to multiple property insurance agencies and then compare final offers with total costs, fees and coverage amount minus any deductibles.
- Finalize your choice: Double-check offers, coverage amount, exclusions and total costs before deciding on the best plan.
- Choose an offer and sign: The final step is to sign the paperwork and make the first payment.
Compare the Best Cannabis Property Insurance from Benzinga’s Top Providers
Find the best cannabis property insurance offers from Benzinga’s top providers this year. These trusted insurers can offer you competitive rates, excellent customer service and good coverage to protect your business.
Get started
securely through AlphaRoot’s
website
AlphaRoot bills itself as insurance designed specifically for growers of cannabis and psychedelics. You can choose from cannabis insurance, psychedelics insurance, holistic wellness coverage and industrial hemp plans that include attentive customer care and affordable premiums, deductibles and extras. Coverage options include general liability, product liability, directors and officers and more.
Best For
- Cannabis insurance
- Psychedelics insurance
- Growers and sellers
- Full range of coverages
- Affordable premiums
- Business coverage
- Not available in all states
Get started
securely through Reefer Protector’s
website
Reefer Protector is a unique insurance carrier that helps cannabis businesses of all types purchase the commercial insurance they need. Cannabis business owners or managers can get commercial auto, liability, product liability, property insurance and much more.
Best For
- Customized commercial cannabis insurance
- All types of cannabis businesses
- Creating unique insurance packages
- Even the smallest cannabis business can buy insurance here
- Insurance brokers help clients save money
- Safeguard everything your business handles
- Some policies may be more expensive than you anticipated
get started
Call Now
securely through The Hartford’s
website
The Hartford is a leader in casualty and property insurance. It brings more than 200 years of experience in developing and providing insurance products. The company uses a quote-based pricing scheme to offer insurance in 2 main segments: commercial and personal lines.
Its commercial segment serves over 1 million small businesses. The personal segment offers only nationally-endorsed home and auto insurance through the AARP® Insurance Program. The Hartford sells its products mainly through a network of independent brokers and agents.
The company is also a 12-time honoree for the world’s most ethical companies according to The Ethisphere Institute. It delivers the name recognition and reputation of an experienced insurance carrier.
Best For
- Those looking for an experienced insurance provider
- Multiple coverage options with 1 carrier
- More than 200 years of insurance experience
- Provides online quotes
- Has a solid financial rating
- Offers a wide range of commercial insurance products
- Pricing is entirely quote-based
Get started
securely through Simply Business’s
website
When you’re a small business owner, you have a lot on your plate. Finding the best insurance policies for your business probably isn’t on the top of your list. Simply Business makes it easy to get the coverage you need. It’s a digital small business insurance agency, which means it offers coverage from multiple insurance carriers.
With Simply Business you can compare quotes and coverage options from multiple companies to determine what’s best for you. Simply Business works with top providers like Hiscox, Travelers and Axis Insurance Company.
You can get policy options online in less than 10 minutes, and if you need more guidance or have questions, its licensed agents are just a phone call away.
Simply Business is a great fit for small businesses and sole proprietors. You can look at its recommended insurance options based on the type of work you do, whether it’s landscaping, accounting or photography.
While Simply Business doesn’t handle your claim directly (the provider you decide to purchase from does), it’s there to help you if you run into any issues. It can get you new copies of your policy documents and help you get in touch with your provider if you need assistance.
If reviewing or buying business insurance has been on your to-do list, Simply Business is an excellent place to start. You can get a quote while you take a coffee break.
Best For
- Small business owners
- Sole proprietors
- Quick quote process
- Licensed agents to assist you
- Can choose from top insurance providers
- No mobile app
get started
Call Now
securely through Tivly’s
website
Shopping for commercial insurance can be a daunting task. You need to contact multiple insurance companies, ask each for quotes on the different types of insurance and then finally compare quotes to make the best choice.
Or you could simplify things and visit Tivly. With Tivly, you can easily get a quote on the insurance you need from reputable insurance companies like Progressive, The Hartford and Liberty Mutual Insurance. You can start your fast, free quote online or call now.
Tivly can connect you with all types of business insurance, including general liability, commercial property and workers’ compensation insurance. It’s best for business owners who want to save time and money by getting matched with a provider that best fits your needs.
Best For
- Busy business owners
- Getting the insurance you need quickly
- Easy quote process
- Partnered with over 200 providers
- Will match you with the one that fits your needs
- No mobile app
- No tools for managing multiple policies from different providers
get started
securely through coverwallet’s
website
Shopping for business insurance can be a tedious process. It takes time to collect and review quotes and coverage unless you visit CoverWallet. CoverWallet, an Aon company, makes it easy to get quotes from multiple insurance providers.
With CoverWallet, you can start by talking with an insurance advisor or start directly with quotes. You can get quotes from multiple reputable insurers, including Hiscox, Chubb and Progressive. Choose from a wide range of coverage options to protect every area of your business, including workers’ compensation, general liability and commercial property insurance.
Once you decide on your insurance coverage, you can manage your policies through MyCoverWallet. This online dashboard allows you to send copies of your insurance certificates when needed, file claims and pay premiums. It keeps your policies organized and allows you to reach out to an expert at any time.
CoverWallet also offers extensive educational resources. You can review its recommended coverage by industry. You can also dig into more specific information based on your industry, location, number of employees and annual revenue.
The one drawback to the CoverWallet is that it doesn’t have a mobile app. You can still access the site through your mobile browser and you can call any time for assistance. Overall, CoverWallet makes it easy to shop for and buy business insurance, and it’s an excellent fit for small businesses and the self-employed.
Best For
- Self-employed
- Start ups
- Small to medium businesses
- Can get multiple quotes easily
- Can learn about recommended insurance for your industry
- Offers many types of insurance
- No mobile app
Do You Need Cannabis Property Insurance?
Cannabis business property insurance is essential to protect your assets and your company. You have a variety of insurance options to choose from to protect your company, from general liability insurance and professional liability to surety bonds. While insurance premiums for a cannabis business may be higher than some other businesses, the costs depend on the specific nature of the business, size and location. Getting customized quotes and comparing offers will ensure you get the coverage you need for the best available rates. If you need more options, check out the best business insurance here.
Frequently Asked Questions
Do I need property insurance if I own or operate a cannabis business?
Yes, you need property insurance if you own or operate a cannabis business. Property insurance will protect your asset value in case the worst happens.
Answer Link
Can I bundle cannabis property insurance with other types of insurance?
Yes, many insurers will let you bundle cannabis property insurance with crop insurance, general liability insurance, workers’ compensation or other types of insurance. Speak to several insurers to understand the types of insurance they offer and the possible savings from a bundled offer.
Answer Link
Are cannabis property insurance premiums tax deductible?
Generally, business insurance premiums are tax deductible. The Internal Revenue Service often views insurance premiums as a cost of doing business and may accept them as tax deductions. However, under Section 280E of the tax code, you cannot deduct expenses from gross income associated with “trafficking.” In some cases, this is applied to cannabis businesses. You can find a guide to business deductions, and consider speaking with a certified public accountant to clarify your business situation.
Answer Link
The post What is Cannabis Property Insurance? by Alison Plaut appeared first on Benzinga. Visit Benzinga to get more great content like this.