Information on Insurance Claims in the Cannabis Industry

Claims happen.  However, many claims could have been avoided if time was taken to consider certain risks and likelihood of those claims occurring.  

Questions to ask yourself:

  • Do you have a safety and operating manual?
  • Is top line management promoting a safe environment?
  • What resources are available to help avoid certain types of claims?

  • Do you consistently have your contracts reviewed by a lawyer before signing?
  • Do you have processes in place such as designated individuals to manage certain risks?

Most clients who have experienced a severe claim will tell you they wished they had spent more time on prevention. 

The tabs below is information on our top three types of claims. 

The theft of cannabis at the store or grow has been our most frequent insurance claim.  Our claims experience has shown this type of claim is not out of control, but occurs more often than any other claim.  

Examples include criminals entering the roof of a grow to automobiles being used to drive through garage doors.  In both of these examples, it becomes clear damage to the building will occur resulting if the insurance carrier will pay for those types of damages.  This is where agreements with the landlord and coverages selected with your insurance broker is relevant.     

Most cannabis companies are aware at what point they have the most to lose.  Protecting your living plants during critical periods such as harvest or flower are important for managing this risk.  Retailers must keep their saleable products locked in safes and vaults in order to reduce this risk. Active central station alarms and video help reduce your chances for theft.

Some of the most frequent employee injuries occur at grow locations in the cannabis industry.  Below are examples of various types of injuries:

  • Strain Lifting-Back
  • Strain Lifting -Shoulder
  • Cuts from trimming plants
  • Chemicals in the eye
  • Cut from using power tools
  • Fall from Ladder
  • Mental Stress
  • Hand Sprain
  • Vehicle Collision
  • Hit Head
  • Walking sprained ankle

Strains and cuts are the most frequent injuries with average cost for these claims ranging from a few hundred dollars to several thousands.   More severe injuries can easily approach six figures.

Relationships with landlords or vendors can deteriorate when problems arise or work is not performed correctly.  Disputes with landlords can be avoided if cannabis tenants are diligent with their lease agreements.  A careful reading of those lease agreements with you lawyer will help determine specific insurance obligations to meet in order to avoid potential conflict.