Mandatory California Marijuana Dispensary Business Insurance Requirements
One of the biggest changes this year for businesses and business insurance is the legalization of adult recreational marijuana. It opens up a new industry that requires its own insurance guidelines that are now set in place. If you own a marijuana dispensary, you can start to get everything you need to comply with requirements as well as fully protect your business. Let’s take a look at what marijuana business insurance quotes you need to meet state regulations as well as some options for even more protection!
What Insurance You Need
Recreational dispensaries have similar regulations as medical dispensaries. California requires recreational marijuana dispensary owners, as well as other cannabis business owners, to have the following insurance quotes:
General Liability
General Liability provides coverage in the event that a third party (such as a customer or vendor) hurts themselves in your dispensary and sues. It also provides additional coverages including coverages for your rented space and for lawsuits over your advertising. California requires a minimum requirement of $1 million/$2 million limits.
Surety Bond
A bond provides financial guarantee to the state that you will be in compliance with state regulations before conducting business and the minimum requirement for this bond is $5,000. As a dispensary you will also need a Retail Marijuana License Bond which also guarantees that your business will meet license and permit requirements.
Commercial Property Insurance
Commercial Property insurance covers your property should you own the facility you are using. It also provides coverage for your business personal property such as furniture and equipment. This, along with extra security measures such as security systems, is mandatory for dispensaries specifically under new law.
These insurance coverage quotes must be obtained by an insurance company licensed to do business in the state and you are required to show proof of these coverages to the California Bureau of Cannabis Control.
When You May Need More Insurance
The minimum state insurance requirements are what you need to get your business started. However, this may not provide all the coverage your dispensary may need. Depending on how your business operates, it is worth considering the following additional coverage:
Workers Compensation
If you have employees, you must obtain a workers comp insurance quote, as mandated by the state. As the legal marijuana industry continues to find its footing in California, workers comp carriers have become more open to these businesses. For instance, the California Workers Comp Insurance Rating Bureau (WCIRB) has assigned the class codes for cannabis business operations which is part of the foundation that your workers comp premium will be based on. Recreational marijuana dispensaries will be categorized under classification 8017(1) which is Stores-Retail. This also applies if your dispensary operations include preparation for retail (such as trimming or packaging) as well as applies if you provide delivery services. Class codes for other operations found in the cannabis industry, such as cannabis cultivation, specialty trimming, manufacturing of cannabis-infused foods and beverages, have also been assigned, solidifying this industry in the workers comp market. If your business and employees also perform these operations, talk to a JVRC Insurance agent about how your business will be classified to get the best California workers comp quote you can.
Commercial Auto
If your business provides delivery services or your employees are running errands for the business while on the clock, commercial auto coverage is essential. Whether your employees use their own vehicles or you have business delivery vehicles, you can obtain coverage for your specific situation to ensure that your business is protected at every angle.
Professional Liability
This coverage protects against a mistake or error that you or your employees make that leads to physical damage or bodily injury. By advising customers what your products are good for or what their effects are provides an exposure for this type of liability. Because of this, it is important to look into this coverage and obtain California professional liability quotes.
EPLI
As workplace conduct is getting more attention in the media, it is important for you as a business owner to protect yourself in the event of any misconduct or discrimination allegations that could be made by your employees, whether potential, former, or current employees. Employers Practice Liability Insurance (EPLI) provides coverage against such allegations that could be made. Some would say it is now deemed essential for every business owner who has employees. If you have or are considering hiring employees for your dispensary, discuss EPLI quotes with a knowledgeable broker to discuss the best coverage for your business.
Where to Start
Now that you know what you need to comply with state regulations as well as what coverage your specific business needs, you must find a reputable broker who is willing to write your business exposure. JVRC Insurance Services is a great option as we provide every line of insurance that is required as well as the ones your business may need. Call us today and we can provide business insurance quotes at competitive rates and specialized coverage to fit your business’ individual needs so that you can thrive in this new and growing industry!