There is no standardization with insurance coverage that is made available to protect marijuana-related businesses. Included within a marijuana liability insurance policy there are 5 different limits of liability with one additional key liability insurance not included that needs to be purchased separately.
The 5 limits of liability that included within a marijuana business insurance policy are:
General Aggregate Limit: This limit is the total annual limit of coverage that will be paid out relating to your business location and activities.
Each Occurrence Limit: This limit is the most the policy will pay out over the course of any one policy term.
Personal & Advertising Injury Limit: A sub-limit of the general aggregate and pays out for non-bodily injuries such as false arrest, malicious prosecution, oral or written publication of material that slanders or libels a person or organization, disparages a person’s or organization’s goods, products or services.
Fire Damage Limit: This limit pays out for damage caused by any one fire to any premises while rented by you, or temporarily occupied by you with the owner’s permission.
Medical Expense Limit: This limit covers medical expenses for bodily injury caused by an accident on your premises as a result of your operations regardless of fault.
Marijuana Product Liability Insurance
The liability protection not automatically included in marijuana liability coverage is the limit for “Products”. Having marijuana product liability insurance included within your marijuana business insurance program will protect your business from claims when your customers hold you liable for bodily injury or property damage that takes place from consumption of marijuana flowers, edibles, and concentrates.
If you purchase marijuana product liability insurance the coverage will be issued as a separate insurance policy. The type of policy it’s issued as is a ‘Claims Made’ form, which is a type of policy that is designed to cover claims that are reported only during the policy period. The policy will respond only if a written claim is made during the policy period or any applicable extended reporting period (also known as a tail) which is offered by the carrier. The key is to make certain that you maintain continuous coverage as again the coverage trigger is when the claim is made, and the claim must be made during the policy period.
Having the proper checks and balances in place with your suppliers and manufacturing process (if you make your own edibles) will help eliminate the potential of a future incident. Marijuana product liability insurance included within your marijuana business insurance program will financially protect your business if it is named in a suit.