Many Hemp businesses are finding out the hard way that they don’t have the right coverage. Below summarizes the policies you need, depending on where you operate in the Cannabis and Hemp Supply Chain.
Contrary to popular belief, the 2018 Farm Bill did not free hemp businesses from volatility and risk. Given the complex state-federal regulatory regime for the hemp industry, business owners – no matter where they fall in the supply chain – must protect themselves from the risks associated with state-to-state regulations on hemp distribution, transportation, quality control, testing, reporting, record-keeping (track and trace), labeling/warnings, advertising and marketing, in the states in which they operate. Really, the only way to truly protect your business is to make sure your have the proper insurance policies in place.
As S2S Specialists, we are here to guide you through the intricacies of insuring your hemp business. Below, we explain the policies you need, depending on where you fall in the Cannabis and Hemp Supply Chain Cycle:
Directors & Officers Coverage (D&O): protects the heads of companies from lawsuits if their actions negatively affect the company’s profitability. This is often the most overlooked coverage because many hemp businesses are small or independently run and no one foresees the potential for operational failures and mismanagement. However, D&O should be considered a top priority for any hemp business across the entire supply chain because one expensive lawsuit can put a company out of business. D&O coverage will pay for legal damages and fees.
Employers Practices Liability: protects you if any of your employees file a claim against you for discrimination including age, race, disability, sexual discrimination, wrongful termination or some other type of discrimination. This is another must-have policy for any type of hemp business.
Professional Liability (E&O): this coverage is designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., growers, consultants) against liability incurred as a result of errors and omissions in performing their professional services.
General Liability: also known as commercial general liability (CGL) insurance, can help protect your business if someone sues you for causing property damage or bodily injury. General liability protects against physical injury to people or damage to property arising from your daily operations.
Product Liability: As a business owner, you can be sued by others for any damage resulting from the negligence of your business products that cause harm to others, such as a defective product. Product Liability insurance pays for your damages and legal expenses if you are sued up to your policy limits. Your liability policy will also pay for medical fees of others who are harmed by your business. This policy is recommended for Cultivators & Harvesters, Distributors and all retailers, whether you sell products in-store or online.
Cyber Defense: If your company stores private information on a computer or server, you are legally liable for protection of this personal information. This type of insurance protects business owners from legal liability resulting from this type of breach. Any business that has an online presence (social media), accounting, banking and payroll services, or stores customer data electronically is a potential victim to be hacked. In today’s technological environment, all companies need Cyber Defense/Data Breach Insurance.
Workers Compensation: A workers compensation policy will pay for medical care and lost wages for employees who are injured on the job. The coverage pays damages regardless of who is at fault in the accident. If the employee dies, the policy will pay compensation benefits to the employee’s family. Most states require employers to carry workers compensation insurance. Even if you are not legally required to do so, carrying this coverage is highly recommended to protect yourself from legal liability because accidents do happen.
Cargo Throughput/Warehouse: provides coverage against physical damage or loss of goods during shipping, storage/warehousing or in transit whether by land, sea or air. Because of the many dangers inherent in shipping, most individuals and businesses need to insure their goods while they are in transit.
Choosing the right insurance policies is critical as an unexpected event like a theft, fire, data breach, product defect, lawsuit or an employee accident can have a devastating effect on your business. Given the fact that hemp was only recently legalized and there are complex laws that vary state-to-state, many of the major, generic insurance giants turn down coverage for hemp businesses or do not offer products tailored to their specific needs and risks. That is not the case with S2S Insurance Specialists. We have over 30 years of insurance experience and deep knowledge of the hemp industry. No matter where your business falls in the hemp supply cycle, S2S Insurance Specialists has the coverages to protect you. Please contact us so we may examine your current policies, help you understand what is and is not covered, and adjust your policy, if necessary. To learn more about how we can protect you your business, click here schedule a free 15-minute consultation or call us at (954) 790-6604.