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Cannabis Insurance in Canada

November 4, 2022

Cannabis insurance in Canada is a policy that secures marijuana manufacturers and retailers from certain risks. In this fast-growing industry, minimizing the risks that hinder your cannabis business activities is essential. Such risks can be third-party body injuries, equipment protection, product recalls and general liability, etc.  

When it comes to difficulties and obstacles in reliable insurance coverage in many countries and Canada as well, we have to deal with state and federal laws controlling the sale of cannabis and CBD products. 

Many companies in Canada offer cannabis business owners insurance and risk consulting services that are adjusted to your needs. Whether you run a large marijuana production facility or a small retail store does not matter. You may protect your business with cannabis insurance. 

What type of Cannabis Insurance Does Canada Offer?

Here is the list of cannabis industries that qualify for insurance in Canada:

  • Insurance for cannabis stores or retailers
  • Cannabis dispensary insurance
  • Cannabis delivery insurance
  • Cannabis farm insurance
  • Cannabis manufacturers insurance
  • Cannabis transportation insurance

What Do Cannabis Insurance Companies Cover in Canada ?

Commercial General Liability Insurance This kind of insurance protects you from risks in daily operations, such as third-party bodily injury or property damage. It includes product liability insurance which covers canna-businesses for any third party or allegation emerging from the products they grow, produce, distribute or sell.

Commercial Property Insurance – It protects your building of a retail store, office, warehouse, storage, or greenhouse. If you suffer from damage or loss inflicted by severe weather, a natural disaster, fire, theft, or vandalism, Commercial Property Insurance will cover your damage. It also provides financial protection for indoor cultivation operations, including covering seeds, plants, and finished stock. 

Business Interruption Insurancethis type of insurance provides financial coverage of any net income you lose from the event that is insured, such as a fire or flood. It includes overhead operating costs, commercial property rent or lease payments, and your employees’ lost salaries if your business is shut down. 

Equipment Breakdown Insurance – you will have to protect the machinery and equipment you use for cultivation, growing, and/or manufacturing. Equipment breakdown insurance covers the costs for your equipment or machinery repair or replacement. 

Errors and Omissions Insurance – in case you fail to provide service as promised or face misconduct allegations, E&O insurance covers your finances for your legal defense costs and any court settlement. 

Many insurance companies in Canada provide the participants of the cannabis  business with other insurance services such as Marijuana distribution insurance and Marijuana retailers’ insurance. They help distributors get the right plan to ensure they have coverage for any issues that could arise during the distribution process. As for the retailers, they are offered the proper protection from unique threats their storefront face every day. 

How Much Does Cannabis Insurance Cost?

There are many factors that influence the price of cannabis-related insurance services in Canada. Deciding how much cannabis insurance coverage your business needs depends on the type of operation you’re running and what risks you face. Your province in Canada may require you to carry a specific coverage amount. For example, cannabis business owners must have at least $5 million in commercial general liability coverage in Ontario. Other factors that insurance companies consider when calculating the costs are:

  • Training and experience
  • Legal certification and applicable licenses
  • Years of operation
  • Your annual revenue
  • Your business’s claims history
  • The coverage limits you require
  • The products and services you provide
  • Number of employees

Who Can Use Cannabis Insurance?

Almost all cannabis-related businesses in Canada need insurance to protect them from potential threats, including different kinds of damages, losses, lawsuits, etc. They are:

  • Cultivators (Indoor, outdoor and greenhouses)
  • 3rd party processors / harvesters
  • Micro growers / craft growers
  • Cannabis related product manufacturers
  • Wholesalers / distributors
  • Laboratories / R&D
  • Medical cannabis dispensaries
  • Ancillary industry

Conclusion

Despite significant growth over the past decade, the marijuana industry in Canada is still facing never-ending obstacles by the provincial and the federal laws. However, cannabis insurance experts in Canada are ready to help you with compliance and slow down your risks. 

So, anticipate your business risks and protect your future with cannabis!