How much does cannabis dispensary insurance cost?

Dispensaries pay an average of $167 per month, or $2,000 per year, for general liability insurance. This is typically the first policy purchased by small business owners, who often need it for commercial leases, loans, and contracts.

A general liability policy helps pay for common third-party lawsuits. For example, it will cover your legal costs if a customer slips in a spill and breaks their wrist, or if someone's wheelchair is damaged when your shop's door closes on it.

This policy also covers advertising injuries, such as slander, libel, and copyright infringement. Most general liability policies include product liability insurance, which covers legal fees if a product harms a customer or damages their property.

This is the average general liability coverage for dispensaries that buy from Insureon:

Insurance premium: $167 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The per-occurrence limit is the maximum your insurer will pay for a single incident, while the aggregate limit is the most your insurer will pay on any claims during the policy period, typically one year.

It's often possible to save money on general liability insurance by bundling it with commercial property coverage in a commercial package policy (CPP). A CPP covers your building, inventory, and equipment, along with providing liability protection.

The cost of general liability insurance depends on several factors, such as the policy limits you choose, the amount of foot traffic you have, the size of your business, years of experience, your claims history, and any endorsements, such as an additional insured.

When you buy general liability insurance, it usually includes product liability insurance. That means the cost will also depend on the risks associated with your products.

For instance, a dispensary that sells only hemp and CBD products can expect to pay less for this coverage than a dispensary that sells a broad range of cannabis products, including medical marijuana and edibles.

Product liability insurance covers legal expenses if a customer sues your business for a bodily injury or property damage caused by a product. For example, a customer might have an adverse reaction to medical cannabis, and end up in the hospital. In this case, product liability coverage would pay for attorney's fees, medical bills, and a judgment or settlement.

Even if your cannabis company wasn't responsible for a product defect that harmed a customer, you could still face a lawsuit. That's why retailers, distributors, and every other business in the supply chain should carry this coverage.

For commercial property insurance, the value of your business property determines your premium. Also called business hazard insurance, this type of coverage helps you recover from financial losses caused by a storm, fire, vandalism, or burglary.

Your building's location, its condition, and your risk of natural disasters will also have an impact on how much you pay for property insurance. For example, an older building in a flood zone will likely have a higher premium than a building in good condition with a new roof.

If you're looking to save money on your policy, you can opt for actual cash value coverage, which reimburses you for the current depreciated value of an item. The other option is replacement value coverage, which covers the cost of buying a brand-new replacement.

Insurance carriers sometimes offer a discount on commercial property insurance when you install a security system or take other approved risk management measures. It's also cheaper to bundle property insurance with general liability insurance in a commercial package policy or similar package.

As with other types of insurance, the policy limits and the deductible you choose will also affect the cost of commercial property insurance.

Marijuana dispensaries pay an average of $548 per month, or $6,574 per year, for a commercial package policy. A CPP bundles general liability coverage with commercial property insurance at a lower cost than buying the policies separately.

Small and medium-sized businesses in the cannabis industry are often eligible for a commercial package policy. It pays for the most common lawsuits brought by customers, along with damage to your building, equipment, or inventory. Most policies include product liability insurance as well.

This is the average commercial package policy for dispensaries that buy from Insureon:

Premium: $548 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The cost of a commercial package policy primarily depends on the value of your building and everything in it, including your cannabis products. Other factors that will affect your premium include your coverage limits, deductible, any policy exclusions, and the condition of your property.

Dispensaries pay an average of $374 per month for workers’ compensation insurance, or $4,490 annually.

Workers' comp helps pay for medical expenses when an employee is injured on the job or develops an occupational illness. It also provides disability benefits for injured workers.

Most states require this insurance coverage for marijuana businesses that have employees. It's also recommended for sole proprietors, as health insurance plans can deny a claim when an injury is related to work.

Employer's liability insurance is included in most workers' comp plans. It covers the cost of lawsuits related to employee injuries, such as an accusation that the employer's negligence caused a workplace injury.

The cost of workers' compensation insurance depends on several factors, primarily the number of employees you have and their level of occupational risk. You can save money on workers' compensation coverage by classifying your workers correctly and implementing safety measures that reduce the likelihood of injuries.