Why Your Business Requires Cannabis Manufacturing Insurance

The Cannabidiol (CBD) global market is currently worth north of $5 billion, according to Grand View Research. However, in the United States, the federal government has imposed stringent laws to regulate the manufacturing, advertising, and selling of CBD products largely due to the health and safety concerns associated with this compound. Hence, any businesses in the US operating in this space should take the necessary measures to protect themselves from industry-specific challenges and risks.

One way to do this is to carry the right insurance plan. In particular, manufacturers of CBD products should carry cannabis manufacturing. Read on to learn more about cannabis manufacturing insurance and its benefits.

What Does Cannabis Manufacturing Insurance Cover?

Cannabis insurance protects your CBD business against all financial losses you may incur from various perils. Cannabis manufacturing and selling is like any other business. Therefore, it faces the usual business risks, including lawsuits, business interruption, workplace injuries, and natural disasters. In 2019, for example, hail storms damaged $25 million worth of hemp crops. 

Beware of the Following Dangers

The cannabis business faces specific challenges that also require special solutions. Any CBD business is bound to face problems such as: 

• Product liability lawsuits – Cannabis is a psychoactive substance. This means that while it may have medicinal benefits, it can also have some effect on the user’s state of consciousness. For this reason, expect frequent product liability claims from users who abuse the product. For instance, a wrong dosage of cannabis can cause adverse effects on the user. Topical CBD products can also be allergens that will disrupt the normal functioning of your body.
• False advertisement claims – The hype behind cannabis products has greatly increased in popularity. Recent research reveals that cannabis can help improve health by balancing blood pressure, fighting cancer, preventing seizures, and treating gastrointestinal disorders. Even so, some cannabis sellers exaggerate the benefits of this product in their marketing. If your clients don't get what you advertised, they can easily sue you for misinformation or false advertising.
• Natural disasters – Cannabis businesses risk facing natural disasters such as floods, fire, and hail storms. Such perils can cause huge losses in your business.

What Are The Benefits of CBD Manufacturing Insurance?

Cannabis manufacturing insurance is suitable for business owners operating in the CBD industry, be it manufacturing, distributing, or selling. This coverage basically protects your business from the losses that may emanate from common insurance perils. 

For instance, if a client abuses cannabis and sues you for the side effects experienced, you will have to spend money on defense. It will take time before the court proves your innocence; by then, you will have spent a lot of money. The good news is that cannabis manufacturing insurance can shield you from such financial losses. 

This coverage is also a sign of compliance since the law requires CBD businesses to carry insurance coverage. Even clients feel safer working with an insured company. In general, cannabis manufacturing insurance can greatly help smooth operations in your business.

Cover Your CBD Business with GrayStone Insurance Group 

At GrayStone Insurance Group, we’re different and passionate about providing comprehensive solutions to hard-to-place businesses like yours. Contact us today to get started on your CBD business insurance.