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Cannabis dispensary insurance in Delaware
Marijuana is legal for both recreational and medical use in the state of Delaware. Cannabis dispensary owners are not required to carry specific insurance, but several policies help small business owners avoid some of the most common risks associated with selling THC.
What types of insurance do Delaware dispensaries need?
Each state has different laws and requirements for cannabis users and marijuana dispensaries. In Delaware, cannabis has been legal for medical use since 2011 and for recreational use since 2022. Marijuana laws and regulations are managed by the Delaware Medical Marijuana Program (DMMP).
Delaware does not require dispensaries to carry a specific insurance policy or surety bond. However, all Delaware small businesses are required to hold two policies under certain circumstances.
- Workers' compensation insurance is mandatory for small businesses with one or more full-time or part-time employees. Workers' comp covers employees in the event of an accident or injury while at work. Sole proprietors can get workers' compensation for themselves, but it isn't required.
- Commercial auto insurance is required for small businesses in Delaware if they use company-owned vehicles for work purposes, such as cannabis deliveries or transportation. This policy covers accidents that happen during business operations with vehicles specifically owned by the company.
For personal vehicles used for company purposes, dispensaries should consider a hired and non-owned auto (HNOA) policy.
What other types of business insurance do I need for my cannabis dispensary?
Besides workers' comp and commercial auto insurance, there are no additional requirements for dispensaries. However, cannabis business owners are encouraged to consider additional policies to navigate the risks associated with selling medical and recreational marijuana.
General liability insurance will protect your dispensary if a customer is injured or their property is damaged on the premises. It can also help pay expenses if you're sued by someone claiming libel, slander, or other advertising injuries.
To avoid paying for costly property repairs or replacements, consider commercial property insurance. This policy will cover in the event of a theft or a fire, and many real estate companies require commercial property insurance before allowing you to rent their storefront.
Product liability insurance can provide protection for your business if a customer claims that the cannabis products they purchased from your dispensary caused them harm, such as an allergic reaction.
Cyber insurance will help you navigate a cyber attack or data breach. In Delaware, businesses that experience a data breach are required to contact customers whose personal information was compromised, which can get extremely expensive without the proper policy in place.
The status of cannabis is constantly changing, and Delaware has undergone a number of setbacks in the legalization process. Business interruption insurance can help cover income gaps if your dispensary has to temporarily shut down.
Finished stock insurance can protect your business from losses if your cannabis products are damaged or destroyed.
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What are the laws and requirements for cannabis businesses in Delaware?
According to the Delaware Medical Marijuana Act, only six dispensaries (officially called "compassion centers") operate across twelve retail locations within Delaware.
To receive a valid registration from the Delaware Department of Health and Social Services, small business owners must submit a compassion care center application, which includes:
- A proposed location with a physical address
- The names of all board members, with information pertaining to any prior legal convictions or license suspensions
- An operational outline
- A security and safety plan
- A comprehensive recordkeeping system
- An application fee determined by the Department of Health and Social Services
While marijuana is legal within the state of Delaware, not all cities allow recreational dispensaries to be established in their towns. Examples include the cities of Bethany, Dewey, and Rehoboth.
Check with your local city and municipal requirements before attempting to open a dispensary within the state.
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How can I get business insurance for my Delaware dispensary?
Start our easy online application to find the best policies for your Delaware cannabis dispensary. For all other cannabis businesses, call one of our dedicated insurance agents at (825) 260-5150, and they can help you pick the perfect policies for your needs.
Updated: May 14, 2024
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