Starting any business is risky. Even more so when starting a business whose legality at the federal level remains, shall we say, murky. Luckily, some of those risks can be mitigated, if you've got the right insurance. So what kind of insurance is right for a budding cannabiz?
Here are four types of small business insurance essential to your marijuana startup, along with a couple others you might want to consider as well.
Yep. Any small business needs a general liability plan, but marijuana businesses might also want to consider product liability plans that can protect you from lawsuits filed by a customer or medical marijuana patient who suffered inadvertent or adverse side effects from your product. These policies can also guard against breach of warranty claims, failure to warn lawsuits, and deceptive practices claims.
In the event a crop or product is tainted, who pays for a recall? Without insurance, you do. First-party product recall coverage can take care of your cannabiz's expenses in conducting a recall, including the costs of notifying customers, shipping costs, and the costs to fix, store, or dispose of the faulty products. Third-party coverage can also handle claims if you're selling a component or ingredient in another manufacturer's product.
Just about every company needs cyber insurance these days, especially those that can be targeted by hackers. And cyber insurance will become more essential as marijuana businesses move from cash-only to credit and debit accepting shops.
Ransomware can hijack your small business and its confidential data until you pay up, or it can destroy it completely. One interesting response to ransomware threats for some small businesses has been kidnapping insurance.
There are many other kinds of small business insurance. To assess the risk of your marijuana business and identify the policies that might be right for you, talk to an experienced commercial attorney.