The Top 2 Insurance Claims Every CBD Business May Face

Due to its status as a highly controlled substance, cannabis can turn a promising business venture on its head if not carefully monitored. The two most common concerns that CBD businesses face, overall legality and medical usage, are a result of this closely-monitored status. Though it isn’t possible to eliminate all risks of working with controlled substances, being familiar with potential claims and having the insurance to combat them can help ensure your company’s success.

1. Legality

Despite widespread popularity and loosening state laws, cannabis is still illegal in many states. It is therefore critical that, above all else, CBD businesses ensure that operation is legal in their home state.

Since CBD is legal almost everywhere, it may be easy to fall into the mindset that all CBD-focused businesses are legal. Even the tracest amount of THC, however, can be enough to render a CBD product illegal. Knowing the exact state requirements can mean the difference in booming success and a litigation nightmare.

2. Malpractice

Another way legality can affect cannabis distribution is through medical malpractice suits. Although medicinal cannabis has been deemed legal even in a number of otherwise illegal states, its usage is still relatively new, meaning there’s a lot of medical experts still don’t understand about it.

Customers may not consider this caveat when purchasing cannabis products, and they may experience unpleasant or even harmful side effects as a result. Often, their ensuing anger is aimed toward distributors, making medical malpractice an unintended risk for those selling cannabis products.

Being aware of the legal status of every product you sell is the first step toward success in the cannabis industry. Noting these common CBD business claims and pursuing adequate insurance coverage to deal with them can ensure that your business endures the test of time and flourishes in this continually booming market.

Have You Considered Group Captive Insurance?

Business insurance can be tougher to shop for than it seems on the surface. Most insurers do their best to predict your risk, but very few employ people who have been in your line of business, at a company with your exact business model. That’s why more and more businesses are turning to alternative risk management options like captive insurance. Captive insurers are owned by the companies they insure, and they provide bespoke insurance solutions whenever you need a form of coverage that just isn’t cost effective in the general marketplace. Some companies even use them as a total insurance solution.

Group Captives Control Cost

While you can start a captive on your own for maximum control over its processes and costs, group captive insurance solutions significantly lower the investment up front while expanding the insurer’s risk pool, a move that usually saves on the cost of policies in the long run as well. The key to managing a group captive situation well is to work with companies who are well-matched to yours in terms of the depth of coverage and kinds of risks covered. By working with businesses whose needs are very similar to your own, your captive company winds up with a more specific insurance mandate and your partners wind up being able to understand your needs, making it easier to build the new captive together.