Cannabis Business Insurance in Michigan

Navigating Michigan’s Cannabis Business Insurance Landscape

The complexities of Michigan’s cannabis industry demand more than just a basic understanding of business operations. To succeed, owners must secure comprehensive cannabis business insurance tailored to their unique needs. Below we will explore Michigan’s mandatory insurance requirements, specialized coverages, and the importance of working with an expert insurance agent.

What Is The Best Insurance Company For a Cannabis Business in Michigan

Below is a list of the top insurance companies and agencies that provide coverage for cannabis businesses in Michigan:

• Are you a Michigan-licensed insurance professional offering services to cannabis-related businesses? Request to be added to this list.

Mandatory Insurance Coverages for Cannabis Businesses in Michigan

Michigan law mandates specific insurance coverages for all licensed cannabis businesses:

• Product Liability Insurance: Required to protect against lawsuits from bodily injuries caused by defective or adulterated cannabis products. A minimum of $100,000 in coverage per license is required as of March 2022.
• General Liability Insurance: Dispensaries must carry at least $100,000 in premises liability coverage to address customer injuries or property damage on-site.
• Workers' Compensation Insurance: All businesses with employees must provide coverage for workplace injuries, ensuring compliance with Michigan labor laws.
• Commercial Auto Insurance: Required for vehicles used in cannabis transportation, safeguarding against accidents and cargo losses.

Failure to maintain these coverages can lead to license suspension, fines, and costly legal battles.

Tailored Insurance for Michigan Cannabis Businesses

Each cannabis operation faces unique risks requiring specialized policies:

Dispensaries and Retailers:

• Product liability and general liability insurance for common risks.
• Inland marine insurance for protecting products in transit.
• Data breach coverage to mitigate losses from cyberattacks.
• Crime insurance to safeguard against theft and vandalism.

Cultivators:

• Crop insurance for losses due to natural disasters or pests.
• Equipment breakdown insurance to repair or replace cultivation machinery.
• Property in transit insurance for moving cannabis between facilities.

Processors and Testing Labs:

• Product liability insurance to cover risks from processed goods.
• Professional liability insurance for testing inaccuracies.

Other Businesses:

Hydroponic shops, smoke shops, landlords, and delivery services also require tailored policies like cargo insurance, umbrella liability, or additional crime coverage.

The Risks of Non-Compliance

Operating without cannabis insurance in Michigan can result in severe penalties:

• License Suspension: Non-compliance with product liability insurance leads to immediate suspension.
• Fines: Businesses face hefty fines for failing to maintain required coverage.
• Legal Exposure: Without insurance, businesses are vulnerable to lawsuits and financial instability after incidents.

Regulatory Insurance Oversight in Michigan

Michigan’s Department of Insurance and Financial Services (DIFS) enforces insurance regulations, while the Commissioner of Insurance oversees compliance. The Office of the Attorney General also plays a role in ensuring adherence to state laws.

Why You Need a Knowledgeable Insurance Agent

Navigating Michigan’s cannabis insurance market requires expertise. A specialized agent can:

• Identify the right policies to match your operational risks.
• Ensure compliance with Michigan’s evolving regulatory framework.
• Navigate limited options in the cannabis insurance market.
• Advocate for you during complex claims processes.