If you are embarking on a new adventure in the legal cannabis industry, you must recognize that you are entering a new industry, too. Though recreational and medicinal cannabis use is becoming legal across the nation, it’s still an emerging market, and one that comes with considerable liabilities.
As a grower, manufacturer, distributor or dispensary within this industry, you must recognize that you are dealing with a product that until a few years ago was banned throughout the U.S. There are still considerable risks associated with cannabis use, and by providing it to the public you must take responsibility for any problems that consumers might experience.
It is when consumers experience problems that liability insurance will come in handy. It is designed to offer you coverage when you make mistakes that influence others. Two of the specific benefits that cannabis businesses might need are product liability and product recall insurance.
Cannabis Product Liability Insurance
Cannabis in any form is something that must be consumed by the user to have any effect. However, when it enters the body, there is always going to be a risk that the product will cause harm. If it does, then the consumer’s losses might be the fault of the cannabis provider.
A cannabis user consumed this product in good faith that it would not do them harm. When they do sustain harm, however, they might find fault in the supply chain. They might blame the dispensary, grower or other party for their losses, and could take legal action against the business as a result. It is product liability insurance that will provide the assistance necessary to allow the impacted businesses to compensate the impacted party appropriately.
Cannabis products, like all agricultural products, contain perishable goods. Throughout the growing, processing and distribution process, something could go wrong, and contamination might occur. Therefore, you might be forced to issue a recall notice, which could trigger a significant financial loss and a downturn in income because you can’t market your products.
This policy can help you cover your own financial losses and will also extend financial assistance to others in the supply chain if necessary. If you find that your consumers have suffered losses as a result of the recall, or that they suffered harm before the recall could take effect, then this policy can work alongside your product liability insurance to provide appropriate benefits.
All in all, you must be prepared to take responsibility for problems that consumers might experience with your cannabis products. Tailored product liability and recall insurance benefits are the policies that will help you do so. Speak to one of our agents today to learn more about the finer points of coverage.