What to know – Cannabis Insurance Top 10

Educate yourself on Cannabis Inurance.

Before the confetti falls at your grand opening here are the Top 10 thing you should know on insuring your cannabis business.

1. Know your City and State Licensing Insurance Requirements

Many cities that are issuing cannabis licenses have their own set of specific insurance requirements each applicant must provide proof of, including the City of Los Angeles. It’s important to know what you must have in place in order to apply for your City license.  As of now, the State requires general liability and a $5,000 marijuana surety bond.

2. Coverage for when you have employees

It takes a team to build a dream.  One of the biggest risks a business takes on is liability of being an employer.  Coverage should include:

  • Workers Compensation- Work Related coverage for injured employees
  • Employee Benefits- Disability, Unemployment
  • Health Insurance & 401k
  • Employers Practices Liability-Coverage for claims made against Employers from Employees

3. Product liability Insurance

It’s a best business practice to have liability insurance for any products they make, sell or handle to protect the business-This is especially true in a newly regulated industry like cannabis. This is also commonly required by other cannabis businesses that buy or sell your product. 

4. Must Buy Cannabis approved insurance

Most insurance companies will decline to quote or issue insurance on anything cannabis related. An insurance company could easily decline claims or non- renew your insurance because of something like cannabis. 

5. Speak to a specialist 

Time and subject matter competence is what we are talking about here. The conversations and services from a specialist should help shorten the time both used and needed in a transaction. The competence of the specialists should be measured in both the questions answered and questions asked of the professional. 


Getting quotes on your coverage needs is important for pricing and coverage comparison.  Keep in mind items 1-5 of this list when doing so as this will greatly improve the insurance buying experience.

7. Compliance & Record Keeping

Most all the cannabis Insurance programs will require that you are 100% if full legal compliance with local and state governments. This means licensing, track & trace and any other city or state stipulations you may have to stay compliant.  Recordkeeping is even more important as this information may be needed if a claim needs to be filed.

8. Property & Loss of income

You should definitely insure any building you own. But you should also consider your inventory, equipment and property of others to be insured against claims like fire and theft.

9. Read Your Policy

The exclusions and endorsements of an insurance policy must be read and understood. This is the insuring contract of a policy and will tell you how good of a policy you have. Exclusions to the policy remove coverage and an endorsement changes something to it.

10. Filing Claims

When it comes to claims be quick to report and be available for investigation into a claim. Notify the insurance company’s claim department or your agent or broker as soon as possible. Gather all data you may have that could be helpful in investigations including data on sales, phone calls and witnesses.