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?
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?
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:
- Read the exclusions.
- 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.