The demand for cannabis continues to increase daily. More than half of U.S. states now have some form of legalized medical or recreational marijuana. This growing interest is positive news for cannabis dispensaries that distribute this product to patients or clients.  
However, just like any other business, if dispensaries make a mistake or don’t do something correctly, they’re in a vulnerable position. Professional liability insurance, also referred to as professional indemnity insurance, can protect them against negligence claims.  

How Do I Know If I Need Professional Liability Insurance? 

You may already have general liability insurance. However, professional liability coverage can protect your business against customers’ potential negligence claims that general liability coverage cannot. For example, if you misadvise a customer and this results in direct physical damage or bodily injury to them, they may take legal action against you. If this should happen, professional liability insurance, also known as errors and omissions insurance (E&O), can help cover the resulting expenses.  

Your professional liability insurance will pay your legal defense costs up to the limit of your policy. Coverage generally doesn’t cover non-financial losses or losses caused by intentional or dishonest acts. Professional liability policies usually have deductibles ranging from $1,000 to $25,000. The amount of coverage you need depends on the size of your dispensary and its level of risk. 

Professional liability insurance also covers claims of misrepresentation, violation of good faith and fair dealing, and inaccurate advice. 

What Other Insurance Coverage Should I Consider? 

There are other types of insurance coverage you may want to consider adding to your dispensary business. These coverages include: 

• Directors and Officers Liability (D&O)—D&O insurance protects the people who serve as your directors or officers from personal losses should your employees, vendors, customers or other parties sue them.   
• Employment Practices Liability Insurance (EPLI)— Cannabis business growth has increased sector employment and employment-related lawsuits. EPLI provides coverage for wrongful termination, discrimination, sexual harassment and retaliation claims. 
• Cyber/Media and Crime—A crime insurance policy can provide coverage for theft of money by an employee, premises coverage for loss of funds by third parties, in transit coverage, forgery coverage, counterfeit currency fraud coverage, client coverage and expense coverage.

Cyber liability is also essential since you face elevated risks associated with network breaches.  

How Can We Help?

You face unique risks as a dispensary. The Sebrite Agency can educate you on your insurance options so that you can make an informed decision on the coverage needed for your cannabis business. Call us today at 800-366-6466 to get started.