Business Basics: What My Consultant Taught Me

The cannabis sector is a lucrative area for any investor. As different states adopt permissive laws promoting the industry's growth, more and more businesses take up the opportunity to invest and earn. This incredible success also brings about a fair share of problems for you as the business owner. Some apparent risks include compliance risks, financial risks from theft and natural perils, and customer claims. These risks can cripple your cannabis business financially if you do not protect yourself sufficiently. The best approach to preventing this issue is to have your insurer evaluate your insurance needs and help you work out a viable solution. This article explores a few cannabis business insurance options for you.

General Liability

Your business needs general liability insurance coverage. This type of insurance covers various issues, including property damage and bodily injury. Insurers also make medical payments due to risks at the workplace, thereby preventing any claims. General liability coverage also pays for any damages caused by the vehicles you own or hire to carry items in your cannabis business. The general liability cover is also essential if you want to interact directly with customers at your place of work. Similarly, you need the general liability cover when accessing the customer's property. One of the significant problems arising after a risk occurs is the burden of the legal fees. A general liability insurance coverage pays for your defense and shields your cannabis business from indirect litigation risks. 

Product Liability Insurance

This type of insurance deals with the compensation claims your business faces after its products injure a person or harm their property. Another common risk you may face is withdrawing or recalling cannabis products. You may also encounter lawsuits resulting from claims of malfunctions or defects in your cannabis products. These liabilities are new and evolving, yet you cannot dismiss them. In addition, the emergence of new rules regularly may result in product recall and withdrawal. Such legal changes are costly for a cannabis business, but product liability insurance helps minimize the risk. 

Business Income Cover

Despite the lucrative nature of the cannabis business, the legal environment remains uncertain for most companies. As laws in most states shift towards adopting recreational and medicinal uses of marijuana, some states are still reluctant. Such legal problems expose your business to income risks. Therefore, you need a policy that protects your firm if any changes in the business environment pose a direct threat to your income by causing temporary suspension or slowdown of normal operations. 

Errors and Omissions

As your firm experiments with different breeds and flavors, the research process may have errors. The research and development team might exaggerate the benefits or understate the effects of other products. Still, it would help if your firm's research and development department were active and well-protected to ensure you become innovative in this competitive market. Therefore, ensure you get an errors and omissions cover that shields you from professional liabilities regarding mistakes and disclosure. 

Some of the cannabis business insurance policies needed for your firm include general liability, product liability, business income, and errors and omissions covers.