Cannabis legalization has created new business opportunities, but with new business opportunities come new risks. Massachusetts businesses in this space will find that cannabis insurance is generally well-suited to protect against many of the risks they face.
Cannabis insurance is specialized commercial insurance for cannabis-related businesses. The insurance’s coverages are normally adapted for the unique operations of these businesses.
Most Massachusetts businesses within the marijuana industry should have marijuana insurance. This broadly extends to businesses that grow, produce, process, sell or otherwise handle cannabis.
Some specific examples of businesses that may need mairjuana insurance include:
Because the cannabis industry is still relatively new, the coverages that marijuana insurance policies offer can vary significantly. Some of the coverages that policies might provide are:
There are still more coverages that businesses may need. An insurance agent who specializes in marijuana insurance can help businesses review all of their options, and potentially even combine insurance policies if no one policy offers all desired protections.
Cannabis businesses generally need workers compensation. Massachusetts broadly requires that most businesses with employees purchase the coverage. The purpose of workers compensation is normally to provide employees with compensation if they’re injured or become ill as a result of work.
Workers compensation may be purchased as part of a cannabis business insurance policy, or the coverage might be purchased through a separate insurance policy. The coverage is readily available in either case, and an insurance agent that’s familiar with cannabis business policies will undoubtedly also be able to help with workers compensation.
Segmenting is fairly common within the cannabis industry, as it can provide businesses with various protections. Segmenting creates complex considerations with regard to insurance, however.
Segmented businesses should work closely with a knowledgeable insurance agent when reviewing cannabis business insurance needs. An agent who specializes in the insurance will be able to review each independent business’s coverage needs and find suitable policies.
Subcontractors are usually treated as independent entities, and thus typically aren’t covered by another business’s cannabis business insurance. Subcontractors often have to purchase their own insurance if they want protection.
In some cases, however, businesses may designate subcontractors to be “additional insureds.” This designation might extend certain protections to the identified subcontractors.
Premiums for cannabis business policies can vary significantly, but costs tend to be much lower than what a major loss or lawsuit would otherwise be. Independent insurance agents can help businesses compare rates among different insurers’ policies.