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Cannabis Insurance Consulting

Cannabis Insurance Consulting

It’s a staggering statistic, but 75 percent of all businesses in the United States are underinsured by 40 percent or more. This is a more meaningful statistics within the cannabis industry since the risk is high enough to make businesses hard to insure. In fact, most cannabis companies pay more for insurance than other, less risky businesses. While legal in certain states, selling cannabis is still, technically, illegal at the federal level, which imposes a hefty risk for an insurance company.

Finding insurance providers comfortable working with a cannabis business can be difficult, but Industry Source Consulting (INSO) can help you get the coverage you need. We have established relationships with insurance carriers willing to provide services to business within the cannabis industry. Buying into our group options, we can also offer less expensive coverage to what you might find on your own. Already knowing who the cannabis-friendly insurance companies are, we’re able to guide you through the process of acquiring the coverage you need for full protection.

Seven different types of commercial insurance

Varying in price and purpose, having seven different types of business insurance to consider can lead to a lengthy amount of research. How do you know what you really need? How do you make sure you have enough coverage in the important areas? INSO can help evaluate your business and make informed suggestions as to what coverage would effectively protect your business. Chances are, you’ll need coverage in at least three central areas as a cannabis business.


General liability protects your business from claims against bodily injury or property damage related to your location, operations, and products. Liability is your blanket policy and the primary piece of insurance you need to stay protected across your business. You do have the option to segment liability and get more specific if necessary. Product liability, for example, is an option to consider due to the high value of what you sell.


Protecting the location where you grow, manufacture, or sell ensures the safety of your inventory and income. This coverage relates to direct losses to your building, improvements you’ve made to the property, inventory, and loss of income. As a second layer to your insurance coverage, this helps keep your bottom line safe, protecting you against anything that could cause an interruption in business.

Workers’ compensation

The last primary component to a strong insurance policy protects you and your employees. Workers’ comp provides wage replacement and medical benefits to employees hurt on the job. Once they accept the compensation, they waive the right to sue you for negligence being the cause of their injury. It’s a policy that helps protect your employees from any financial hardship after an accident and keeps you safe from paying the large fees associated with a lawsuit.

Special insurance considerations

Running a cannabis business often means your insurance won’t look exactly like policies for other types of businesses. Be prepared to see a marijuana risk rider on your insurance policy. INSO can help you interpret what specific riders, attached to your insurance policy mean, but in general they omit a part of the business risk you assume your insurance company covers. This means the insurance company deems something specific about your business too risky to insure because of the likelihood it will happen or the costs associated with dealing with a claim.

However, insurance companies don’t want you to end up facing the issue, so often, marijuana risk riders will ask you to take affirmative steps in order to prevent the issue from arising at all, such as:

  • Keeping product securely locked up.
  • Installing an alarm system, with motion detectors, linked to a central response center.
  • Having a licensed electrician certify your electrical work can handle the extreme power needs of your business.

Insurance companies will be transparent about adding these types of riders into your policy, but make sure you fully understand what they mean for your business’ coverage. You may need to add additional insurance to deflect the rider.

INSO insurance consulting

At INSO, our clear understanding of every state’s laws, where it’s legal to sell cannabis, means we’re able to get you the best policy to protect your employees and your assets from a trusted carrier. Our pool of expert insurance providers are not new to the cannabis space. Between our dedicated team and our superior vendors, we’re able to suggest the right level of coverage at a competitive price. In addition to keeping your business protected, our services extend for end-to-end support of your cannabis endeavor. From property to equipment, marketing to operations, we’ve got you covered. Contact INSO today to learn more.

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