Coast to Coast
& CannaShield Insurance Services

What types of insurance is required for my

cannabis business?

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Most states require general liability insurance (often $1M–$2M in coverage) and workers’ compensation for employees to obtain or maintain our cannabis license. Product liability is also critical due to the risk of product-related claims and is mandatory in Washington State.  Check state-specific regulations, as requirements vary ​

What does product liability insurance cover

for my cannabis business?

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Product liability insurance covers claims related to defective or mislabeled cannabis products, adverse health effects (e.g., illness from contamination), and recall costs. It also includes legal defense costs if a customer sues over product-related harm.

Is insurance required for cash and inventory theft? 

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Standard policies may not cover theft of cash or inventory, but you can add crime coverage or a theft endorsement to protect against burglary, armed robbery, or employee theft. Given the cash-heavy nature of dispensaries, this is highly recommended.

A liability policy DOES NOT cover your property or inventory

Does my insurance cover product spoilage or equipment failure? 

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Standard property insurance may not cover spoilage from power outages or equipment breakdowns (e.g., refrigeration failure). You’ll need a spoilage endorsement or equipment breakdown coverage to protect perishable cannabis inventory.

What happens if I don’t have insurance for my cannabis business

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Operating without insurance risks loss of your state license, fines, or inability to secure leases or vendor contracts. You’re also financially liable for lawsuits, property damage, or theft, which could lead to significant losses or business closure.

How much does insurance for a

cannabis business cost?

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Premiums typically range from $550 to $15,000 annually for small to mid-sized dispensaries, depending on location, annual revenue, number of employees, and coverage types (e.g., general liability, product liability, property). High-risk areas or larger operations may see higher costs.

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Does general liability insurance cover

customer injuries?

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Yes, general liability covers bodily injuries (e.g., slips or falls) and property damage to third parties on your premises. It also covers legal defense costs for related lawsuits but does not cover product-related claims or employee injuries.

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What is a certificate of insurance, and

why is it needed?

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A certificate of insurance is a document proving your business has active insurance coverage. It’s often required by state regulators, landlords, or suppliers to verify compliance with licensing or lease agreements. You can obtain one from your insurance provider.

Do I need cyber insurance for my

cannabis business

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Yes, if you use POS systems, online sales platforms, or store customer/vendor data, cyber insurance is advisable. It covers losses from data breaches, hacking, or credit card fraud, which are growing risks in retail cannabis operations.

Why is insurance for the cannabis industry

so expensive?

 

Premiums are high due to the cannabis industry’s federal illegality, high-risk profile (e.g., theft, product liability), and limited insurers willing to offer coverage. Lack of historical claims data and regulatory complexity also drive costs, requiring specialized policies from niche providers.