Cannabis Insurance in Ontario

Cannabis Insurance in Ontario

September 29, 2022 / 5 mins read

The cannabis industry is growing and evolving in Ontario, but it also comes with a variety of risks.

If you are a licensed cannabis producer or retailer, you need a cannabis insurance package to protect your investment.

Ask your Western business insurance expert about what type of cannabis insurance you need for your Ontario-based business, either medical or recreational cannabis.

We’ve got the expertise and knowledge to get you the right cannabis insurance package that fits your operation, whether you’re in the Greater Toronto Area, Port Perry, Aurora, Smith Falls, Bruce County, Brantford, St. Thomas, or elsewhere in Ontario.

What kind of cannabis insurance do I need?

A cannabis insurance package can help protect you from different kinds of risk, including business risks and risks specific to the legal cannabis industry.

Discuss what coverages you need with your Western business insurance expert to make sure your Ontario cannabis business has the right cannabis insurance package to protect your investment.

1. Product Liability Insurance: Product liability insurance protects your cannabis business from first-party and third-party claims of bodily injury, property damage, and other damages related to the cannabis products and services that you sell.

First-party claims are claims stemming from an accident, injury, or loss caused by manufacturing defects, improper labeling, or failure to warn consumers about potential hazards, such as the presence of carcinogens and inaccurate THC measurements.

Third-party claims refer to any type of claim in which your cannabis business could be held liable for damages from the use of a product, loss of wages, medical expenses, and bodily injury.

2. Commercial General Liability Insurance (CGL): Commercial General Liability Insurance protects you against day-to-day risks like third-party bodily injury or damage to a client’s property. It generally covers medical fees and legal expenses, regardless of the outcome of a lawsuit by a client against your cannabis business or operation. CGL also covers completed projects, damage to rented premises, and issues with the advertising of your business.

Without commercial liability insurance, you would be responsible for paying any liability costs out of your own pocket.

In Ontario, cannabis business owners must have at least $5 million in commercial general liability coverage.

3. Product Recall Insurance: A product recall can be devastating financially and to your brand’s reputation. Product Recall Insurance can help cover the costs of a recall if you become aware that your cannabis products could harm consumers. It can also help cover the disposal costs of the product, replacement costs, lost profits, and the marketing costs of getting your brand back on track.

4. Stock Insurance: Stock Insurance provides coverage for your cannabis seeds and plants, cannabis products and the accessories you sell in the event of insurable perils such as a fire, theft, mold caused by failing heating and cooling systems, and burst pipes.

Speak to your Western business insurance expert about the coverages you need for your Ontario cannabis operation or business.

5. Cargo and Transit Insurance: Cargo coverage can cover losses if your cannabis product is lost, damaged, or stolen while being loaded, transported, or unloaded. It can replace income loss for lost non-replaceable cargo such as a harvested crop.

6. Equipment Insurance: As a cultivator, grower, or producer, you need to protect the machinery and equipment you use. Equipment Breakdown Insurance covers the cost to repair or replace your equipment, such as electrical power panels and air conditioning units, if there is sudden or accidental breakdown of a mechanical or electrical piece of equipment due to an insured peril.

7. Errors and Omissions Insurance (E&O): You and your cannabis business could be accused of a professional mistake, professional negligence, or failure to deliver promised services. E&O insurance can help cover judgments or settlements of claims caused by services or advice provided to clients.

8. Cannabis Crime Insurance: This type of insurance will help protect your cannabis business or operation against an employee’s criminal behavior, such as theft of money, securities, and property or forgery, or a third party’s criminal behavior. You will need to purchase an endorsement for cannabis crime insurance in your package.

9. Cyber Liability Insurance: If you have customer data and other important information related to your business stored on computers and your server, you could be at risk for a cyberattack or data breach. Cyberattacks are continuing to grow and cyber liability insurance is one of the fastest emerging insurance coverages.

Your Western business insurance expert will go over in detail how you can benefit from cyber liability insurance.

10. Pollution Liability Insurance: If you are a cannabis grower you are exposed to pollution liability claims due to the use of fertilizers and other chemicals in growing your product both indoors and outdoors. Pollution Liability Insurance protects your cannabis operation in the event of bodily injury, property damage and cleanup costs due to the release or escape of pollutants.

11. Commercial Auto Insurance: If you have a business car, truck, or van that you use as part of your cannabis business, it needs commercial coverage as part of your cannabis insurance package. Your personal car or truck insurance usually won’t cover your cannabis business.

12. Commercial Property Insurance: This type of insurance can cover losses due to fire or lightning, including removing property to protect it from further damage. You can also include vandalism and malicious mischief in your commercial property insurance in your cannabis insurance package.

13. Business Interruption: Business interruption insurance is an additional property insurance coverage that covers loss of income if your business suffers a disaster, and your business premises or facility has to be temporarily closed. It can mean the difference between reopening and going out of business.

How much does insurance cost for a cannabis operation or business?

How much your cannabis insurance costs depends on what type of cannabis business or operation you own.

Factors when calculating your premium can include:

  • Legal certification and applicable licenses
  • Years in operation
  • Cannabis products and services you provide
  • Training and experience
  • Annual and projected revenue
  • Claims history
  • The coverage limits you need

Whether you a cannabis producer, distributor or retailer, your Western insurance expert will go over in detail what coverages you need.

Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get your Ontario cannabis business the right cannabis insurance package. Our experts are available now to help you navigate the business insurance journey to protect your cannabis business.

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