What is Cannabis Event Insurance?

To host and participate in marijuana events, companies and entrepreneurs who are involved need cannabis event insurance to protect them from unforeseen incidents. Even if you have a business insurance policy, it might not cover you if you’re the host or participant at such an event. Learn the ins and outs of this crucial event insurance and get started with protecting your personal and business interests.

Understanding Cannabis Event Insurance

While many states have approved the sale and use of cannabis, federal law still lists it as an illegal substance. The conflicting state and federal laws around the product make for some complex situations, in which having cannabis insurance is beneficial to reduce liability. Companies involved in the manufacturing, agriculture and sales aspects should all maintain an insurance policy to protect against workplace injuries, property damage, crop failure and more. But those policies might not cover them when participating in or hosting an event. 

When a company is at an event, the insurance policy will kick in and is legally required in most circumstances. It offers equipment protection — if anything happens to one of your machines, you — can get it replaced — relocation coverage in case your event venue cancels on you at the last minute and coverage in case you must cancel the event outright.

What Does Cannabis Event Insurance Cover?

Because cannabis is still an emerging market with legal uncertainties, good insurance coverage is a smart move. Learn what cannabis event insurance covers and the value this can provide.

Event Relocation Coverage

Event planners can sign all the right contracts and coordinate with other parties carefully and still experience surprises with their event location. Sometimes circumstances beyond your control will dictate finding a new venue — and fast!

When your company incurs a financial expense for having to cancel an event resulting from venue disruptions, postpone it or abandon it altogether, the event coverage can reimburse your expenses.

Event Cancellation Coverage 

Once you’ve signed up vendors, accepted ticket fees and prepared for an event, canceling it can be complex. Without insurance coverage, it could leave your directors and officers susceptible to legal action. Get protection in case of event cancellation to avoid handling possible lawsuits.

Equipment Coverage

Event equipment can be expensive. And when you’re transporting it from one venue to another and your staff is following diagrams and information for setting it up, you can face damages. Some equipment that cannabis vendors commonly transport include vaporizing devices, presentation equipment, smoking tools and booth-related items, such as tables and marketing displays. Whether intentional or accidental, your insurance policy can help replace these items if they get damaged during an event.

General Liability 

Ensure you’re covered for any type of risk. This includes claims from harmful incidents that happen during your events or on the event premises. Some event hosts think they can skip this insurance. But imagine if a vendor was setting up and suffered an injury. Who pays for the worker’s medical expenses? They have legal recourse to ask that you pay for it. Without insurance, that could mean thousands of dollars that you are legally liable for.

This policy can also cover you in case of defamation or plagiarism in this constantly evolving marketplace. General liability insurance is a diverse safeguard from personal damages related to property and physical injuries. That way, you protect your assets throughout your event.

Compliance Liability

The cannabis marketplace is complex and evolving. Managing regulatory compliance is challenging because it’s an ever-shifting landscape. Compliance liability coverage can protect you if you fail to comply with a legal regulation.

Product Liability

You’re selling goods that consumers will use. Whether that means marketing third-party products from other manufacturers, such as smoking tools or the cannabis products you’ve grown and manufactured, there are risks to customers that you want protection from. Dispensaries are in a high-risk business, especially given the complex regulatory landscape between state approvals and the federal disapproval of cannabis.

Marketing and advertising cannabis products have massive limitations. A consumer can misinterpret your product descriptions and instructions easily, which can lead to product liability claims when the customer feels the products didn’t meet their standards or they have concerns about the effects.

This coverage provides financial protection for settlement and defense costs in case of a credible product liability claim. 

Crime Insurance

Many banks won’t work with cannabis companies, leading to a mostly cash industry. Criminals know this and prey on businesses. Events are heavily prone to thefts, forgery, employee misconduct and more.

When you have crime insurance under your event policy, you’ll get financial protection for crimes, such as stolen cash, missing inventory and other criminal-act-related damages. Whether your event takes place in a high-crime area or not, this is wise coverage to add to your insurance policy.

Property Insurance

Whether you own or rent your event space, you need to cover it and the items you store there. Fires, extreme storms or equipment failure can lead to immense financial losses that, without insurance, businesses cannot recover from. This coverage reimburses financial losses to property and can provide compensation for lost business income while you restore your business.

Average Insurance Cost

Cannabis insurance costs vary based on how long you need coverage and the coverage options you select. A basic short-term policy designed to cover a business during setup, the event and teardown can cost as little as $139. However, you’ll need to add product liability and inventory coverage to the policy to get full protection, which costs extra.

Who Is Qualified?

Whether you’re marketing cannabis products or selling other wares during a cannabis-related event, you can qualify for coverage. Here’s a look at common businesses that are involved in conventions, festivals and expos in the cannabis industry and might require coverage.

• Ancillary cannabis products
• Artisan and clothiers
• Artists and exhibitors
• Business solution companies
• Cannabis event organizers
• Craft, food and information vendors
• Glassblowers
• Jewelers and potters
• Retail sales and services
• Wholesalers and private labels
• Wood, leather and metalwork

How to Apply for Policy

Applying for insurance coverage is fairly simple, though you’ll need your business details and information about the event and coverage options you want. Gather materials before sitting down to request a quote. Here’s what you can expect during the application process.

• Select the insurance carrier you want to secure a policy from.
• Visit the insurance carrier’s website and click the application button.
• The application will ask for your company name, address, type of business and your contact information.
• Choose the policy effective date. Make sure that the policy covers you for setup and not just the day of the event.
• You’ll need to enter general business information, including your number of full- and part-time employees, annual payroll and gross receipts.
• Enter the event address and information about the building replacement cost and personal property replacement cost.
• In the general liability section, you’ll need to input the value of the coverage you’d like along with any information on additional insureds and how much equipment coverage you need. You’ll also have an opportunity to purchase workers’ compensation coverage.
• The insurance company will also want to know about losses within the last few years to determine your risk profile.
• Submit your application and await the insurance company’s decision on whether to cover your event and the cost based on your risk profile.

Compare the Best Cannabis Event Insurance from Benzinga's Top Providers 

When you’re ready to cover your business with the best cannabis event insurance, review this list of the top providers to get started.

Coverage for Unforeseen Circumstances

Cannabis event insurance covers your business for unforeseen circumstances and is a wise choice whether you’re hosting an event or participating in one. Protect your financial interests and the future of your business with this crucial insurance product.

Frequently Asked Questions