Dispensary tips

How to get the best insurance for your dispensary

By
Mauricio Comi
September 6, 2022

When applying for a cannabis dispensary license, protecting your investment with the right cannabis insurance policy is an important, yet often overlooked, step. This guide helps dispensary owners find an optimal insurance policy for their retail business. 

5 step checklist for buying cannabis insurance

Our simple guide below will help you find the best-fit insurance policy for your dispensary in just five steps:

  1. Find the right insurance broker
  2. Identify the necessary and best-fit coverage options for your cannabis business
  3. Complete your insurance applications
  4. Gather multiple insurance quotes
  5. Purchase your policy

1. Find an insurance broker

Your insurance broker should be someone who inspires confidence and will be a trusted business partner who can help you make informed business decisions. They should have deep knowledge insurance as it relates to the cannabis industry, in addition to demonstrating going the extra mile to find the best products—and provide you with upfront details about what's not covered (AKA exclusions).

2. Identify the right insurance products for your cannabis business

Once you decide on a cannabis insurance partner, you'll want to pinpoint the most important products and coverage you'll need as an operator in the cannabis sector.

Identify the processes, contract language, security systems, and other activities you can pull from that complement your insurance products. Creating a holistic risk mitigation strategy to protect your business can help reduce your overall insurance price.

Most dispensaries start with these four basic types of coverage:

  • Property Liability: Covers damage from theft, fire and most weather occurrences.
  • General Liability: Protection in the event a 3rd party (someone outside your business) is injured on your property. Also covers their personal property if it’s damaged as a result of your operations.
  • Product Liability: Protection if injury or damage is caused to a third party (or their property) due to a defective product.
  • Workers Compensation: Covers medical costs and lost wages if your employee is hurt or becomes ill from a work-related injury or accident.

You might also want to consider Employment Practice Liability and Cyber Insurance—regardless, all options can (and should) be reviewed with your insurance broker in order to select the ideal policy for your business.

3. Send out quote applications

Next, begin firing off quote requests for the various insurance products you're interested in.

Quotes are free, so it's worth completing the application for all relevant products. You'll make your decision once you've gathered prices from multiple brokers and have a thorough understanding of what a given product does (or does not) cover.

4. Analyze quotes and make a decision

On average, quotes take about 5-10 business days to come back—assuming all information collected is sufficient for the carriers to price your product. In some cases, carriers need additional information, so the process can take longer.

Review all quotes with your broker and make sure you categorize them by:

  1. Price: Which quotes fit your budget, while offering the protection you need for peace of mind?
  2. Coverage: Make sure you understand your coverage limits, and if they are per event or for the policy period.
  3. Exclusions: This is one of the most important things to understand. Not all insurance carriers pay out for the same claims. Know what they are, and make sure you understand the true price you're paying for the exclusion.

While not common, in some cases, brokers can negotiate with the carrier to remove an exclusion.

5. Purchase your policy

Once you decide to buy, your broker will tell you how you can pay for your policy.

Some brokers offer the option to pay in installments rather than a bulk one-time payment. This is an attractive option for smaller and newer cannabis businesses that may be budget-conscious.

Bonus step: partner with Dutchie!

Ready to talk to a cannabis insurance expert today? Dutchie Insurance is our full-service insurance agency that caters exclusively to the cannabis industry and is focused on providing the most competitive, best-fit coverage options for dispensaries in the United States.

Our insurance programs are designed to support the full spectrum of any cannabis business, from seed to sale—including cultivation, processing, wholesale distribution, and retail. We partner with industry-leading insurance carriers who have access to insurance solutions designed exclusively for the cannabis industry.

To learn more about Dutchie Insurance, contact our team of in-house cannabis insurance experts today.

*Dutchie Insurance is currently only available in the U.S.

About the author
Mauricio Comi
Head of Insurance @ Dutchie