Questions About Marijuana Business Insurance Cost

Mark StraussBusiness | Commercial Insurance

The cost of marijuana business insurance is one of the more common questions I get from canna businesses. It seems like a very simple question to answer however due to the marketplace being so new and each business having unique characteristics it’s impossible to provide ballpark estimates. Insurance for canna businesses are issued as 2 separate insurance policies, one policy would encompass your General Liability & Property exposure and the other would cover your Products Liability exposure.

Marijuana Business Insurance Cost Factor #1: General Liability

Liability insurance is the most commonly requested product, a liability policy for canna businesses will encompass 5 different limits of insurance that are included within a General Liability insurance policy. They include:

  • 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 injury 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.

The premium for this policy is determined by the following factors:

  1. Your gross receipts
  2. The type of product you manufacture and sell

Every insurance company has a minimum premium that they will charge. If the insurance rate for a product multiplied by the gross sales per thousand, does not exceed that minimum then the premium charge will be the minimum.

Marijuana Business Insurance Cost Factor #2: Building & Business Personal Property

Property insurance is difficult to predict and the premium for this coverage will vary based upon what limits of protection you might need. The following needs to be considered to determine your Marijuana Business Personal Property limit:

  • 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 & Betterments; 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.
  • Business Income Limit; this will provide normal operating expenses and get your business back in operation after the suspension of your operations due to a covered loss.

The premium for this portion of the policy is determined by the following factors:

  1. How much protection you need for your business property
  2. The business income limit chosen, this is typically a minimum of 3 months of your projected receipts

 Marijuana Business Insurance Cost Factor #3: Products & Completed Operations Liability

Product liability is issued as a separate policy and will protect your business from claims when your customers hold you liable for bodily injury or property damage that results from the use of your product(s).

The premium for this policy is determined by the following factors:

  1. Your gross receipts
  2. The type of product you manufacture and sell

I did my best to make the answer short, sweet, to the point and informative although as you can see there are many factors that come into play and contribute to your overall marijuana business insurance cost. Each insurance company has their own pricing mechanism so the cost will be different among carriers.

Click here to request an application to start the process to receive an insurance quote for your canna business.

This article is intended for informational purposes only and is not insurance advice or a substitute for consultation with a licensed insurance broker to address your particular risk or circumstance.

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.