Cannabis Business Insurance: 

The protection you need to grow amid

continued risk
Despite record growth, the cannabis industry is still stuck in a web of state and federal laws
governing the sale of cannabis and CBD products. This makes it difficult for industry
businesses to obtain reliable insurance coverage. HUB’s specialized cannabis insurance
experts and risk consultants help you manage the emerging risks that face your cannabis
business with the right risk transfer and mitigation.

Our industry brokers and risk control specialists offer cannabis insurance and risk consulting
services tailored to your needs. We make sure you’re covered, so you can focus on
maximizing growth and profit.

Less detail

Where does HUB offer Cannabis Insurance? 

With specialists in both the U.S. and Canada, HUB is ideally positioned to manage your
cross-border cannabis risk. We can help secure a multi-policy coverage that protects your
retail, warehouse and extraction outlets both north and south of the border, where cannabis is
legal (Canada) and federally illegal (U.S.). This requires a deep understanding of coverage
nuances and interdependencies. 

HUB’s industry experts can help you manage domestic cross-border challenges as well. This
includes obtaining the right insurance policies and instituting the best risk management
practices for cannabis sales and transportation across state lines. 

What types of Cannabis Insurance coverage does HUB

Offer?
Our relationships with leading insurance carriers and wholesalers that specialize in cannabis
insurance enable us to recommend optimal coverage across sectors. Our deep knowledge of
cannabis risk allows us to help you manage exposures and anticipate trends. 

 Cultivation and harvesting: Severe weather across North America can threaten and
reduce ROI for cannabis field owners and operators. Parametric coverage and other
unique policy alternatives may be an option for your business.

More farmers are setting aside land to grow cannabis, as traditional fruits and
 vegetables earn less than fair market price. Unlike these traditional crops, cannabis
plant growth is not covered by the Federal Crop Insurance Program (FCIP) and will
need to be privately insured, which can be costly and is harder to come by, especially
with the necessary limits and premiums. Make sure you have the right coverage to
transport the cannabis from your grow facility to an extraction or retail dispensary.

HUB’s dedicated Cannabis team can help you secure the following policies for your
cannabis cultivation and harvesting program: 

o Crop insurance
o Parametric insurance
o Product recall insurance
o General Liability insurance
o Policy for transportation/distribution of cannabis?  

 Extraction: Use of hazardous chemicals in cannabis extraction is replete with risk.

For business owners, this makes insurance both harder to come by and critical to
maintaining safe operations. 

HUB’s dedicated Cannabis team can help you secure the following policies for your
cannabis extraction operation:

o Property insurance 
o General Liability insurance 
o Product recall insurance
o Policy for regulatory fines/actions

 Retail and wholesale dispensary: As legalization continues to expand, cannabis

retail outlets are moving into neighborhood strip malls and high-traffic retail centers. 

Due to the influx of cash into stores and pressures from the underground black
market, cannabis retailers face theft and cyber breaches at greater proportions. At the
same time, real estate developers and property owners face liability and push back
from other tenants due to cannabis renters. 

HUB’s dedicated cannabis team can help you secure the following policies for your
retail dispensary, or for your facility that houses cannabis tenants: 

o Property insurance
o General Liability insurance
o Crime insurance
o Cyber insurance

 Ancillary cannabis businesses: Ancillary support businesses providing IT,

equipment, transportation and delivery, and consulting services to cannabis businesses
will face some of the same risks cannabis businesses do. Because cannabis isn’t
federally legal, your existing policies may not cover the products or services you
provide.
 HUB’s dedicated cannabis team can help you secure the following policies for your
ancillary cannabis business: 

o Errors and Emissions (E&O) insurance

o General Liability insurance
o Umbrella insurance
o Cyber insurance 

 Distribution: Interstate transportation can open cannabis organizations up to federal

fines and product confiscation. Understanding state and federal interconnectivity can
help inform your risk management for distribution. 
 Manufacturing: Rising product recall claims threaten to derail a grower’s mission of
delivering quality products. Instituting top risk management practices will be key to
safeguarding your products and manufacturing facilities. 
 Wholesale: Distribution outlets face security, theft and inventory challenges.
Offloading risk to contracts and insurance can reduce exposure.
 Retail outlets and dispensaries: Cyber breaches and theft are rampant at cannabis
retail outlets and dispensaries. Securing the right cyber and crime coverage are key to
fortifying your business assets. 

Support for Your Current and Emerging Risks

Cannabis insurance is available in Canada and all US states where medical and
recreational cannabis is legal. Our dedicated brokers, claims advisors, risk services
consultants and employee benefits specialists can advise you on a wide range of
insurance and risk management issues. Let’s work together to develop a tailored
cannabis insurance and risk consulting solution to meet your needs.
Insurance Contract
Wording Cannabis
Business Owners Should
Avoid
Nov 7, 2019 | Business Insurance, Hemp Insurance
It is important to note that every business in the chain of
custody (cultivation, processing, manufacturing,
distributing, wholesalers and retailers alike) are
responsible for product tampering and tracking. Below are
some forms that may be found on a general liability policy
that should be avoided at all costs, in plain terms:
Smoking Exclusion
Smoking exclusions in regards to cannabis and hemp use is a “no
brainer” for dispensaries, but since the grower, processors and others
in the chain of custody do not always know where the flower or oil will
end up, this endorsement would leave everyone in the chain of custody
exposed. This form excludes smoking of any “herbal” substance, which
is not defined and leaves the business exposed due to the ambiguous
nature of the verbiage.  To that end, these forms specifically exclude
vape equipment and its components entirely.
Conditions That Relate to Cannabis
It is important that this form be read through carefully, as many times
there are exclusions/conditions that relate to your business that
specifically excluded or coverage is severely reduced/limited regarding
cannabis and hemp.
Ingredient Exclusions
Be very careful to read this endorsement thoroughly!  ALL
CANNABIS/HEMP CARRIERS that offer products coverage will apply this
endorsement to their policy, however, not all Ingredient Exclusions are
made the same.
Designated Premises Limitation
These policy terms are used on many policies issued for
cannabis/hemp policies.  They are not necessarily harmful, unless you
have operations that extend away from your initial location, such as a
special event or delivery services.
Total Cannabis Exclusion
Unfortunately, this endorsement still lives in the cannabis insurance
marketplace.  By way of this form, the policy charges for coverage, but
then removes most claims because it completely excludes any claim
relating to cannabis.  Simply put, the only kind of claims that may be
covered would be slip and fall (in the parking lot, since a dispensary
would be a cannabis operation) and all cannabis products coverage
that is charged for would be excluded.  The coverage would only apply
to accessories that are not related to cannabis, such as a t-shirt or hat. 
For this reason, this is a very dangerous exclusion.
Vaporizing Equipment and Components
Exclusion
For manufacturers, distributors, wholesalers and retailers, this form
can be a massive risk to your operations.  If this is applied to your
policy, then there is no coverage for any claim arising out of the use,
handling or ownership of vaporizing equipment, or any part of the
accessories attached or used with the vaporizing equipment including
pens, cartridges, mouth pieces, batteries, chargers, coils and any
miscellaneous products used with, or attached to, vaporizing
equipment.  Considering the wrongful death lawsuits and bodily injury
lawsuits emerging recently, it is important to negotiate this form off
your policy if possible.
Class Limitation
This endorsement can be very tricky for Cannabiz owners as the
classification is limited to operations specifically listed on the
application AND agreed to on the hazards portion of the general
liability policy (which unless you’re a broker, you may easily look right
past this page!).  The danger in this form, is that if your in a state that
was or is medicinal only, and your state approves regulated adult use,
and your business moves in this direction, there will be no coverage for
your operations unless you report this to your insurance company, and
they agree to add it.  In states that have regulated adult use, this is the
majority of the sales since medicinal use charges a doctor fee to renew
a license once a year, and many patrons would rather just pay the adult
use taxes on their products then hassle with a license. Another reason
this form can be problematic is because if your insurance broker,
underwriting firm or carrier class this policy incorrectly, you could be
wrapped up in a time-consuming lawsuit to pay a claim that was
applied for due to an administrative error.
Assault and Battery Exclusion
By way of this exclusion, if you, your employees or one of your security
guards remove any “unwanted” patrons from your facility, even if to
protect others or property, there is absolutely no coverage for bodily
injury or property damage, and likewise there is no defense for a
lawsuit.  This would affect everyone in the cannabis/hemp industry due
to needed security measures.
Exclusion – Health Hazards, Tobacco &
Cannabis Business
This exclusion excludes vaporizers and its components and contents
from bodily injury.  It goes on to specify that any contraction,
development, aggravation or exacerbation of cancer, pre cancer, heart
disease, other diseases of the organ (and it does not specify WHICH
ORGAN – SUCH AS LUNGS!!) that are impaired are excluded.  This form
SPECIFICALLY EXCLUDES CLAIMS FOR DEPRESSION AND MENTAL
DISORDERS (which is a good majority of the cannabis/hemp using
community!).  Class actions are also almost entirely excluded. A very
small amount of bodily injuries would actually fall outside of the
categories listed.  For this reason, this endorsement cuts the protection
of product liability severely and leave the insured almost entirely
uninsured.