General liability insurance for cannabis businesses

General liability insurance covers common lawsuits brought by customers and other people outside your business.

Cannabis-related businesses (CRBs) face a high risk of customer injuries and property damage. A visitor could slip on the floor of a dispensary, or a customer could have an allergic reaction to marijuana or a CBD product.

General liability insurance can help pay for an injured customer’s medical bills, along with legal expenses if they decide to sue your business.

As the legalization of marijuana spreads, state laws increasingly require cannabis businesses to carry general liability insurance. You'll need to research the laws in your state to determine how much coverage you need.

If you rent a commercial space, your landlord might also require you to carry this coverage.

General liability insurance covers the basic risks of interacting with customers, clients, and other third parties. Your policy may cover:

• Customer injuries
• Customer property damage
• Advertising injuries, such as copyright infringement
• Harm caused by your product

If a customer or delivery person slips and falls at your cannabis business, there's a chance you could be blamed for the injury. If the person decides to sue, you could end up paying for medical expenses – plus the cost of hiring a lawyer. General liability insurance can cover:

• Medical bills
• Attorney’s fees
• Court-ordered judgments
• Settlements

General liability insurance provides coverage when a customer’s property is damaged. For example, if a customer trips over a box at your business, breaks their smartphone, and sues, your general liability policy could help pay for damages. This policy can also cover legal expenses if a customer sues to recoup costs.

For protection for your own business property, look to commercial property insurance. This policy can pay for repair or replacement of business property that's stolen, damaged, or destroyed.

While creating an advertising campaign for your cannabis business, it’s possible to inadvertently copy a logo or slogan you saw elsewhere. Accidental advertising injuries are covered by general liability insurance, including:

• Defamation, both libel (written) and slander (spoken)
• Copyright infringement

For third-party claims related to your products, you'll need product liability insurance. A product liability policy can help cover legal costs if a customer sues over an injury or property damage caused by your product.

This coverage is crucial for manufacturers, cultivators, and any other business involved in the production, sale, or distribution of cannabis products. You can often add it as an endorsement to your general liability policy.

General liability insurance may be the most important policy for cannabis businesses, but it's not the only protection you need. Owners of cannabis businesses should also consider:

Commercial property insurance helps businesses recover financially from fires, theft, vandalism, and other business property damage or loss.

Commercial auto insurance covers the legal costs and property damage from accidents involving your cannabis business's vehicle. It also covers vehicle theft and vandalism.

Workers' compensation insurance is required in most states for cannabis businesses with employees. Workers' comp also protects sole proprietors from work injury costs that personal health insurance might deny.

Surety bonds guarantee your cannabis business will fulfill the terms of its contracts and pay its suppliers. Many states require a surety bond as part of licensing requirements.

Product liability insurance covers defense costs if a product harms a customer or damages their property. It's recommended for growers, sellers, and distributors or cannabis products.

Are you ready to safeguard your cannabis business with general liability insurance? If you run a dispensary, you can complete Insureon’s easy online application to get quotes from top U.S. carriers. Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.