Mosaic Insurance Alliance knows that when it comes to cannabis companies, specific theft precautions are often needed for a covered claim
It’s a cannabis business owner’s worst nightmare: You show up in the morning to open your facility and you’ve been burglarized.
The cannabis oil you processed and stored last week—gone. That box of pre-rolls—gone. Laptops—gone.
But you bought insurance to cover your inventory and other property you own, so the insurance company will pay for the loss, right? The answer is maybe.
Most property insurance policies include theft as a covered cause of loss, so if you are a shoe store and you get burglarized overnight, your property—including any inventory, computers, etc.—would all be covered. However, most cannabis insurers require the business owner to take special precautions for the loss to be covered. For example, the insurer may require that burglar alarms be centrally monitored and operational at the time of loss, or the insurer may require that all cannabis inventory be stored in a safe or vault. If requirements are not met—the alarm is not operational, and/or the cannabis inventory is not stored properly—the loss MAY NOT BE COVERED. Some insurers take this one step further and state that if the cannabis inventory is not stored properly at the time of loss, any stolen property (even the laptops) will be excluded.
Bottom line: know the specific requirements of your policy and adhere to them. For instance, most cannabis insurance policies are specific about what qualifies as a “safe” or a “vault.” One insurer requires that a safe must weigh at least 550 lbs., and if it weighs less than 2,000 lbs., the safe must be bolted to the floor. In other words, if you’re using a standard gun safe to store inventory you probably won’t have coverage. Most policies are also specific about the type of vault that is required, such as one insurer who requires a “vault” to have steel lined walls, concrete flooring, and a central station alarm connected to the door.
It’s very important that you communicate to your insurance broker the type of property you want to protect. The worst time to find out what your policy requires is when you discover a theft loss and try to file a claim.
That is what Mosaic Insurance Alliance is here for—to answer any questions, help you get the coverage that you need, and walk you through what you need to do in order to abide by insurance regulations. We are cannabis insurance professionals who have access to top carriers in the country, write cannabis insurance in multiple states, and been in the cannabis insurance industry since 2012. We’re ready for you!
Steve Boone, Cannabis Program Director
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