Business owners consider risks when they start a cannabis company and sell the products to the public. The company must provide high-quality products to its customers and abide by the cannabis laws. It is vital for the business owner to conduct risk assessments to identify risks they face by operating the business.
The businesses must also address potential losses related to the crops and how they are secured. When it comes to cannabis, the business owner must evaluate local laws and stop customers from using fraudulent information to obtain it. By choosing the right policies, the business avoids financial losses.
Protection for the Crop
When growing their own product, the cannabis business must obtain policies that protect against losses generated by damaged crops. The damaged crops prevent the business from generating profits and succeeding.
When reviewing their options, the company must evaluate the equipment they use and evaluate better choices for protecting the crop. However, by purchasing the policy, the business can avoid circumstances that stop them from generating profits that could lead to a shutdown. Business owners who want to sell the crops start by reviewing Cannabis Insurance right now.
Business Liabilities That Could Emerge
General liabilities occur in business that could present a financial loss for the business. They include but are not limited to a breach of contract, property damage, and accidents that happen on the commercial property. The purpose of the insurance is to prevent the business owner from facing a financial loss in a lawsuit. If a customer files a lawsuit and wins, the insurance policy provides compensation to cover the monetary award provided to the customer.
Liabilities Related to Selling Cannabis Products
When it comes to selling cannabis products, the business owner must assess their customers online and ensure that they do not sell the products to anyone under 21, and they must ensure that the products are not sold or shipped into areas where cannabis is illegal.
If the company sells to a minor or in an area where cannabis is illegal, the company faces serious liabilities and penalties from the state where the product was delivered. Coverage for these liabilities gives the company access to funds to cover these financial losses and avoid a shutdown of their company.
Coverage for Their Workers
Workers compensation is required by federal laws to protect the workers if they become injured while performing their job. The coverage provides payments for all medical treatment needed by the injured worker. They will receive monetary benefits if they are unable to return to work immediately because of their injury. The insurance decreases the potential for a lawsuit filed by a worker after they sustain an injury. The claims adjuster for the insurer decides if the claim is approved or denied.
Protection for Theft of Product
When it comes to cannabis, there is a higher probability of theft of the products, especially if a worker is underage or cannot obtain or use the products legally in their location. Competitors may make attempts to steal the crops and prevent the company from selling their products to the public.
For this reason, the business owner must store their products in secure locations that prevent direct access to the product. An insurance policy that protects the crop against theft prevents a financial loss for the company. They can add a rider to their coverage if the crops are at a higher-than-average price than other products.
Coverage for Losses of Income
The business owner may also choose to set up a loss of income policy that helps them get funds to cover overhead costs and pay their workers. Whenever the company faces a shutdown that is beyond its control, it can file a claim to get funds to help them cover its expenses until the business can reopen.
The recent pandemic showed business owners that the government can stop them from operating in dire circumstances and prevent the company from generating profits. By filing a claim, the business won’t go out of business entirely and have a chance to restart once the shutdown is over.
Protection Against Fraudulent Prescriptions
Fraudulent prescriptions are a major problem for cannabis companies that must obtain a prescription. In specific states, cannabis and marijuana products require the customer to present a valid prescription to get the products. Some states will not allow recreational use of cannabis products, and they do not allow CBD oils. However, they allow medical marijuana if the patient has a prescription from their doctor. The cannabis company must verify all details about the prescription through the doctor before filling it and distributing the products.
Protection for Defective Products
Defective products present a risk to the customers, and the business owner must evaluate their products and ensure the products are tested thoroughly. If the cannabis products have defects, this could lead to customer-related injuries.
A product liability claim could generate a serious financial loss for the company as a customer files a lawsuit and wins. The product liability insurance provides funds to cover monetary awards in product liability cases and prevent the company from shutting down.
If the product liability isn’t managed out of court, it could damage the company’s credibility in their industry. If the company is damaged by the legal claim, the business could shut down and fail to sell products to the public in the future.
Business owners must assess ways to protect their company and avoid circumstances that damage their credibility or lose an asset. Proper insurance policies provide protection for the assets such as commercial property, vehicles, and their products.
Companies that are selling cannabis must consider other risks such as theft or damage to their crop. The company could lose profits because of shutdowns initiated by the government, and they can face a financial loss if they are the defendant in a lawsuit. When reviewing all these risks, the company owner must consider what risks damage their company or credibility. The right insurance policies protect the company and its assets more thoroughly.