General liability coverage, for the cannabis industry, is similar, in many ways, to the coverage provided to any other commercial establishment. The distinguishing factors include Admiral’s ability to offer higher liability limits along with business specific endorsements and waivers. We have an underwriting team which has a great deal of expertise and understanding of the potential liability risks within the cannabis industry. Our knowledge can help our brokers meet the needs of their customer, be it a marijuana dispensaries or other related business. Our underwriters will assist in reducing the customers’ risks and premiums, while avoiding potential gaps in coverage. Each liability insurance policy will be tailored to the policyholder’s needs.
We explore the three most prevalent exposures seen, to date, in our cannabis book of business in this blog.
1. Slip and Fall Claims
Slip and fall claims most commonly occur when parking areas, walkways, and entrances are not kept free from ice or other hazards. Other issues that may result in claims include steps or railings in need of repair, and wet floors from spills or cleaning that are not properly marked or cordoned off.
2. Assault and Battery Claims
Most dispensaries employ security guards, not just to deter would-be thieves from stealing merchandise or cash, but also to deal with the occasional unruly customer. If a customer refuses to leave after being asked to do so, the security guard may need to step in. Many assault and battery claims are a result of security guards becoming overzealous in their duties. Often, dispensaries contract security guards from third-party providers, which makes the terms of these contracts important when it comes to resolving claims. Risk transfer clauses in the agreement should benefit the dispensary.
3. Bodily Injury Claims
Most liability insurance policies in the cannabis industry include exclusions for abrupt and sudden injuries, such as an allergic reaction. Bodily injury claims that are covered have included supplements added to edible products, such as a supplement called corydalis, which was alleged to cause liver damage. Other claims have resulted from product giveaways not being clearly labeled, and recipients being unaware that the product contained THC.
Loss Prevention: How to Reduce Risk
One of the biggest factors in reducing risks involves having proper language in any leases or contracts with landlords, maintenance and snow removal contractors, security firms, marijuana product manufacturers and distributors, or other entities with which the dispensary does business. There should be language in these contracts that details what the landlord or contractor is responsible for, and “hold harmless” language that favors the dispensary and transfers risk to the responsible party when appropriate. For security firms, it is especially important to ensure the firm is properly insured, and its insurance does not include an assault and battery exclusion.
Another factor that can reduce the risk of claims is ensuring clear and proper labeling on all products, including any supplements or inactive ingredients.
Work with the Cannabis Insurance Industry Experts
At Admiral, our cannabis team includes dedicated claims experts who understand the risk exposures unique to the cannabis industry. We consistently monitor the trends in risk appetite, claims filed, and losses generated in order to provide our wholesale brokers, and their retail brokers who work with businesses that grow, process, and sell cannabis products with best-in-class liability insurance coverage policies and risk mitigation strategies. If you are a retail agent or broker, locate an Admiral wholesale partner. If you are a wholesaler, contact us about becoming a premier partner.
