How Much Will Insurance Cost My Cannabis Business?
Each and every business is unique and that also means the insurance requirements for each business are unique. The cost of your insurance will depend on a number of key factors including:
- Total Insurable Value (TIV) - This is the total value of property, inventory, equipment, and business income covered in an insurance policy. (Crop insurance limits may also be included in this limit.)
- Type of Operations - The exposure and rating will be much different for a grower versus secure transport or provisioning centers.
- Annual Revenue - Your annual sales are used as a key rating factor for General Liability, Product Liability and Excess Liability costs.
- Liability Limits - Each layer of liability you add on will increase the cost of insurance. Most operations use $1,000,000 as a starting point.
- Security and Safety Procedures - These are often requirements for certain coverage but can also provide some relief on pricing.
Pricing will also vary for each operation and with how segmented cannabis insurance solutions currently are, coverage is often secured through multiple companies. However, nothing is more frustrating when researching a purchase of a product or service than "contact for pricing". We understand that and have provided estimated ranges below to give you an idea
- Property Insurance
- Premium for very small operations tend to start around $1,500 - $5,000 annually while medium to large operations will see property insurance costs starting in the $30,000 - $100,000+ annual cost.
- General Liability
- Smaller operations will start around $1,000 with larger operations up to $30,000-$100,000+
- Product Liability
- Each license requires a minimum of $100,000 of Product Liability coverage without any exclusions. Depending on the operations, there are options starting at $1,500 per license but we suggest that you plan for about $5,000.
- Product Recall
- Some Product Liability policies may include optional coverage for Product Recall liability. However, you can also secure this coverage as a stand-alone policy. Limits range from $100,000 up to $2,000,000.
- Minimum Premiums start at about $1,000 and the price is rated on sales. The estimated cost for a business with $1,000,000 in sales would start at about $2,500.
- Cyber and Data Liability
- You can secure $1,000,000 limits with minimum premiums start at $5,000 ranging up to $20,000+ for medium to large operations.
You can access Spire's cannabis insurance calculator to help gauge what the cost of various insurance coverages are. Please note, that these are general rates and are on the higher end of the average. Many specific factors on your property, safety & security, sales, deductibles, etc. can provide a significant difference in pricing.
Unsure of where to start or have more questions? Contact us here.