Marijuana Insurance Coverage for Business Property

Mark StraussBusiness | Commercial Insurance, Business | Commercial Property

Marijuana business insurance coverage for business property will protect the contents usual to business operations at your premises. The following should be considered in determination of your business property limit for your marijuana insurance coverage program:

Furniture and Fixtures, including outdoor fixtures;

Machinery and Equipment

Stock; this would be defined as merchandise held in storage for sale, raw materials, and in-process or finished goods including supplies used in packaging or shipping.

Tenants’ Improvements & Betterment’s; these would include fixtures, alterations, installations, or additions.

Leased personal property for which you have a contractual responsibility to insure, unless otherwise provided for under Personal Property of Others.

You need to ask these pertinent questions as your marijuana business insurance coverage is put into place.

Are you going to be renting a location that is ready to go or are you going to have to spend money to build out your space (tenant improvements)? Do you want coverage for these improvements?

Will you need coverage for business personal property such as computers, registers, furniture, display cases, etc?

How much coverage will you need for your supplies/inventory, cannabis, edibles and other marijuana related products?

If you are going to operate a marijuana dispensary what percentage of your inventory is going to be displayed for customers?

Most policies have a limitation to how much protection is afforded to stock on display at marijuana dispensaries. All policies will require that a Central Station Burglar Alarm is in place as well as a Safe. Property protection for stock on display will have it’s own separate deductible from your other property.

What type of security measures do you plan on having? Security doors? An Intercom system? Metal detectors? Cameras inside and outside the premises? A monitored alarm system? Armed or unarmed security guards?

Will you have weapons on the premises?

Will you have a safe?  If so, how much will it weigh? What is its fire rating and will it be bolted to the ground?

 For marijuana dispensaries all policies require that all inventory of marijuana and marijuana containing items are kept locked in a safe at all times during business and non-business hours except for inventory on display. Policies will contain an exclusion if this requirement is not met and theft coverage will be excluded form the policy in its entirety.

In addition the safe used to house all marijuana stock and/or inventory will need to be bolted to the ground and weigh 800 lbs or more with a one hour fire raging.  

Operating a marijuana dispensary presents new risks for the insurance industry as such it is important that when you read through your marijuana insurance coverage you:

  1. Read the exclusions.
  2. Read the exceptions to the exclusions.

The following are notable marijuana insurance coverage property exclusions or limitations:

 Property displayed in show windows and in showcases not opening into the interior of the the premises is considered protected only when it is displayed behind swinging plate glass.

Property where the risk of loss or damage has been materially increased by changes in your premises.

Property located in expansions of your premises shown in the Declarations.

Invalid Payments Exclusion

Spoilage Exclusion

Marijuana Stock/Plants While Growing unless endorsed herein Exclusion

Property and/or Stock in Transit Exclusion

The marijuana business insurance marketplace is new, because of this there are only a handful of insurance companies that will provide coverage for marijuana related businesses. As more states go to vote on legalizing marijuana for medicinal and recreational use I expect the marketplace will change and provide new insurance products that will address the risks faced by this industry.

Mark Strauss
Insurance Broker & Advisor
As a trusted Portland Oregon Insurance broker I take a thorough approach in my work and listen to what you have to say and help solve your risk concerns. I don’t have an allegiance to any one insurance company, you can be certain not only will you be insured correctly but the insurance in place will be the most competitive premium that is available. Contact me to help diagnose what your insurance needs might be, my hands-on approach will offer you personalized peace of mind.