fbpx

Cannabis Business Insurance

Business
Cannabis Business Insurance

For more info, contact

Dusty Fournier

Account Executive

You’ve probably heard the cannabis industry referred to as the Wild West. It has been rapidly changing, developing and expanding landscape presenting unique risk management considerations for those involved in the cultivation, production, dispensing and sale of cannabis and cannabis-derivative products.

Effective October 17 of 2019, recreational marijuana use was legal in Canada. Propelling a new industry in our nation, and growing risk in insurance. In 2020, Cannabis sales doubled hitting $2.6 Billion (Forbes), by 2025 the Canadian cannabis market is forecast to reach 9.2 billion CAD (GlobeNewswire). Which means this “bud”ing industry is on one “blunt” growth trajectory.

Puns aside, cannabis retailing is unique. Unlike the standard retail operation, cannabis requires a deeper understanding of what coverages are mandated for the heavily regulated industry. As these mandates fall at both the national and provincial level, if your business business involves cannabis in anyway, it is important to have a team in your corner to make sure you are protected so you can grow your business.

Work with an expert who understands your business.

Leading up to legalization, Dusty Fournier worked with producers and sellers so they were prepared and coverage was in place and ready to “roll” come October 17, 2019. With experience working with cannabis dispensaries/retail, manufacturing and growing operations from start to finish, our expert will visit prior to construction to ensure coverage is in place as you grow. With an assessment based on the scope of work in your operation we tailor the coverage you need to protect your business, and will be straight forward with what you don’t. Connect with Dusty.

If you’re getting ready to open a cannabis business – whether its an online direct to consumer, wholesale, or a bricks & mortar store – trust in Gifford Carr to protect what matters most to you, and your business.

TYPES OF CANNABIS BUSINESSES WE WORK WITH:

  • Cultivators
  • Processors/Harvestors
  • Manufacturers (processing and manufacturing)
  • Wholesale Distributors
  • Recreational & Medical Marijuana Dispensaries
  • Cannabis Transporters
  • Cannabis Laboratories (including Testing, Research and Development Labs and Facilities)
  • Cannabis Landlords, Leasing Facilities and Business Owners
  • Property Managers
  • Security
  • Cannabis consultants
  • Cannabis directors and officers
  • Hospitality operations (including cannabis clubs and vape lounges)

RISKS FOR CANNABIS BUSINESSES:

Some of the business coverages, like commercial property, directors and officers, general liability and cyber liability, cannabis operations have unique risks to consider, including:

  • Spoilage (including mould/fungus affecting your cannabis inventory)
  • Product recall
  • High market/dollar value of products and inventory
  • Increased probability of fire
  • Misinterpretations in relation to Canadian cannabis laws and regulations

COVERAGE TO BE CONSIDERED FOR CANNABIS GROW OPS IN ONTARIO:

  • Agricultural and Manufacturing Coverage, cultivation and packaging operations means you likely have fields, crops, buildings, and equipment to also be considered for coverage;
  • Environmental, with fields and crops, you may want to consider coverage is in place to help with an environmental impact;
  • Transportation, including commercial vehicles (or fleet coverage, if more than 5 vehicles) and cargo.

FAQ

I'm opening a dispensary, where do I start? 

Start with builders risk with premises liability for your construction and renovations to get your shop ready. Note, many insurers will require all building updates to be done. For example, if the building is older, all plumbing, heating, ventilation need to be up to code for the insurance companies to provide coverage, and are more keen on these updates for cannabis operations.

For the type of operation there are minimum commercial general liability (CGL) requirements, which as of November 18, 2020 the OCS dropped to minimum of $5 million.

Stock and equipment needs to be inventoried, to ensure it is properly insured for the right value.

Do I need business interruption coverage? 

In the event of a loss where business could not continue as normal for a period of time, and there is an essential tie in to the business physical location, this coverage would help cover profit and ongoing expenses during repairs to help tied over the business until reopening operations at the same level of operations prior to the loss, or until your 12-24 month period of indemnity is exhausted, whichever comes first.

The key here is the time until you are back up to your level of operations prior to the loss. After all, continuity is critical in business. Connect with your local broker to understand more about this kind of cover and the indemnity period in place for your policy.

What happens if my stock goes bad?

Cannabis, unlike many other retail operations, has a stock with shelf life and is easily spoiled. Problems with temperature causing dampness and moisture can mold and ruin your stock.

Stock coverage provides coverage for your actual physical product, your cannabis, and the accessories you’re selling, in the event of insurable perils that impact your stock, like fire, theft, mold (caused by failing heating and cooling systems), and burst pipes.

Where can I get insurance for a cannabis company in Ontario?

Connect with your local broker. Whether you’re a licensed producer, distributor, or provide another legal business related to cannabis, you need full insurance coverage customized to your specific operation in a highly regulated industry. With access to insurance solutions from coast to coast, Gifford Carr can connect you with the coverage solutions tailored to your operation while providing the local expertise for your market.

Protecting what matters most to you.
It’s what we do.


Protect your green.


Coverage for Cannabis Landlords

Many standard insurance companies don’t offer coverage for landlords who own property leased out as legal grow ops or other cannabis-related operations in Canada.

Whether you lease to a cannabis grow operations, dispensary, or related craft business, connect with your local broker to ensure you have the right insurance in place to protect the use of your space.

Get in touch
Get in touch
Get in touch
Complete the form to connect with your local Gifford Carr broker to get a detailed quote. Trust us to ensure you are protected. So you can focus on what matters.



    What type of insurance are you shopping for? Select all that apply.







        Contact our team
        Contact our team
        Contact our team
        Complete the form to connect with your local Gifford Carr broker to get a detailed quote. Trust us to ensure you are protected. So you can focus on what matters.





          Builders Risk + Wrap Up Liability

          Builders Risk + Wrap Up Liability

          Protection for your renovations to your cannabis retail location, from beginning to end.

          Icon Contractor
          Icon Contractor
          This policy can be purchased on a project-specific basis. The Builders Risk policy has been specifically designed to meet the needs of the cannabis and hemp industry.

          Business Interruption

          Business Interruption

          If your business is on hold due to a loss, tied to the physical location of your business, this coverage can help weather the storm.

          In the event of a loss where business could not continue as normal for a period of time, and there is an essential tie in to the business physical location, this coverage would help cover profit and ongoing expenses during repairs to help tied over the business until reopening operations at the same level of operations prior to the loss, or until your 12-24 month period of indemnity is exhausted, whichever comes first.

          Commercial General Liability

          Commercial General Liability

          An essential for all business operations.

          Icon Market
          Icon Market

          In the event of property damage or bodily harm caused by you, your business or your employees to a third party, a comprehensive Commercial General Liability Insurance policy should protect you from litigation, out-of-court settlements, and judgements awarded by the courts.

          For Cannabis operations in Ontario, your Commercial General Liability (CGL) policy, when matched with the right insurance provider, will be specifically designed to meet the needs of the cannabis and hemp industry using both IBC and program specific coverage forms and endorsements.

          Learn more about Commercial General Liability.

          Commercial Property

          Commercial Property

          A fundamental coverage for the bricks and mortar of shop.

          In broad terms, this coverage protects your buildings, contents and—one of the most important assets for retails and wholesale operations—inventory. Ensure you are current with your inventory in stock for for your warehouse or shoppe. In the Cannabis industry in Ontario, this coverage is adapted to meet the needs of the cannabis and hemp industry using both IBC and program specific coverage forms and endorsements, ensuring the coverage is suitable for operations like:

          • Indoor/Outdoor Growers
          • Analytical Operations, Assaying
          • Drug, Medicine or Pharmaceutical Prep Compounding
          • Security (unarmed)
          • Store Wholesale NOC
          • Store Retail NOC/Delivery
          • Salesperson Outside
          • Clerical Office

          Cyber

          Cyber

          Online payment, personal identity information (PII) and marketing data, it’s all a part of your daily business operations.

          Icon Computer
          Icon Computer

          Personal or business information breaches can be incredibly damaging and costly.

          If your business or organization has sensitive commercial or personal information that resides online (website or social media accounts), or communication methods (email automation, digital ads and abc) that transfers information digitally, Cyber Liability Insurance is imperative.

          Learn more about Cyber Liability Insurance.

          Equipment Breakdown and Stock Spoilage

          Equipment Breakdown and Stock Spoilage

          In the event of equipment breakdown, especially in cannabis production, it typically means lost or wasted product.

          equipment breakdown
          equipment breakdown

          Can be a simple part, a thermometer or a light, but can end up spoiling hundreds of plants, seeds or product. Equipment Breakdown coverage can help cover the cost of repairing or replacing damaged equipment and the losses resulting from the breakdown.

          Product Liability

          Product Liability

          Quality control is an essential step in due diligence as a licensed cannabis producer.

          product liability cannabis
          product liability cannabis

          If you make and/or sell products to other businesses or consumers, you may be held responsible for any injury or damage caused by those products.

          Licensed producers are responsible for proper testing and labelling of cannabis products to ensure the percentage of THC and other cannabinoids is accurate.

          A defect or malfunction of the product you make or sell could cause bodily injury or damage to property. This is when product liability insurance will protect you against a lawsuit.

          Product Recall

          Product Recall

          Revenue losses, the cost of withdrawing a product from market, disposal, testing, and crisis management costs can add up. This can help.

          product recall
          product recall

          A defect in a product can threaten the health and safety of the general public and has the potential to bankrupt a company. Product Recall insurance can cover you for the costs of a recall such as recall expenses, disposal costs, replacement costs, lost profits and brand rehabilitation costs.

          In the event that your product is faulty, tampered with and/or contaminated, your loss may be protected with this coverage. It typically is designed to isolate a component of your organization’s first-party product exposure.

          Stock

          Stock

          Coverage for you product from seed to sale.

          cannabis product
          cannabis product

          Your cannabis plants, in all stages of growth along with their derivatives and ready to use products have high value to our operations.

          Stock coverage provides coverage for your actual physical product, your cannabis, and the accessories you’re selling, in the event of insurable perils that impact your stock, like fire, theft, mold (caused by failing heating and cooling systems), and burst pipes.