Close up of a miniature shopping cart holding marijuana leaves

What Insurance Do I Need to Open a Cannabis Store in Ontario?

Sep 15 2020

After the Cannabis Act came into effect some years ago, we’ve seen cannabis stores emerge all over Canada. Currently, there are more than 1000 legal cannabis stores - however, researchers say that the numbers are not yet enough to make the product fully accessible. So if you’re someone looking to open your own cannabis store in Ontario, it can be a promising and exciting undertaking in this growing market. But like many who have been in the first steps of opening a cannabis store, you might be wondering if you need insurance for your store and if so, what kind? You’re definitely in the right place.

In this article, we will talk all about the fundamentals of cannabis store insurance and what coverage is needed so that you are protected from the most common legal and financial risks.

Let’s get started!

Woman walking into a cannabis store with a cannabis logo in the background

What is Cannabis Store Insurance?

Cannabis store insurance (AKA cannabis liability insurance) is a specialized kind of insurance policy that has different types of coverage needed by a cannabis store or retailer. With this insurance policy in place, business owners can focus fully on running the business, knowing that they are covered in case of property damage, theft, spoilage of stock, business interruption, product-related injuries, and various other liabilities.

Medical, legal, or repair costs due to liabilities can bring your business to a grinding halt if you’re not armed with sufficient coverage. This is why having a cannabis store insurance policy can be a real lifesaver for both established and new businesses in this growing market.

What Coverage Can a Cannabis Store Insurance Include?

Not all cannabis store insurance policies are equal. To have the peace of mind that you deserve as you open your new cannabis store in Ontario, you need a policy that will give you extensive coverage that can protect you from the most common liabilities that cannabis stores face.

Here at KASE Insurance, we work closely with our clients to give them the tailor-fit insurance policy that they need. You can think of your cannabis store insurance as a set of commercial insurance policies that you would need for your store - therefore it can include the following:

1. Commercial Property Insurance For Your Cannabis Store

With commercial property insurance included in your cannabis store insurance policy, you will be able to have coverage for the following:

Property damage

Any business that has a physical location where they do their operations needs coverage in case of property damage due to natural disasters, robbery, or vandalism. This coverage will help with the costly repairs associated with the above circumstances.

Damaged or Stolen Equipment, Documents, Employee’s & Personal Belongings

The coverage for property damage can be extended to also cover the costs associated if any of the following is damaged or stolen:

  • Equipment damage (computers, phones, boilers, etc)
  • Company documents (e.g. accounting records, client files, etc.)
  • Personal belongings of the employees.

Spoiled or Stolen Inventory

One batch of spoiled cannabis products can cost your business a lot. Furthermore, some cannabis products can be stolen by staff because of the product’s small size and high value. This is why coverage for spoiled or stolen inventory is very important for your cannabis store.

Income losses during business interruptions

There are a number of reasons why business interruptions can happen for your cannabis store - such as a natural disaster, weather anomalies, customers avoiding your area because it is considered unsafe, and orders of civil authority. With this coverage in place, your business is covered for the income lost during such circumstances.

2. General Liability Insurance For Your Cannabis Store

With general liability insurance included in your cannabis store insurance policy, you will be able to have the following types of coverage:

On-site third-party injuries

This coverage answers for the medical and legal costs associated with a customer injury happening within your place of business. This also applies to suppliers who might be in your cannabis store to make deliveries.

Damage to third-party property

If your employee would visit a customer’s property (such as when making a delivery) and cause property damage while doing so, this coverage will help with the legal costs and/or repair costs associated with the incident.

Reputational liability

In the occasion that libel, slander, or copyright infringement causes injury to your cannabis business, this is the coverage that you will need for the associated costs and losses.

Product liability

One of the most important types of coverage you will need is product liability coverage. As an organic drug that is taken into the body, cannabis can cause a few unexpected reactions which may be due to a person’s physiology or drug interactions. A few examples of unexpected side effects that can occur in some individuals include heart attacks, seizures, stroke, and cardiac arrest. For these reasons, your cannabis business should be protected from legal and/or medical costs by having this coverage.

Close up of cannabis buds in a jar

3. Worker’s Compensation Insurance For Your Cannabis Store

With worker’s compensation insurance included in your cannabis store insurance policy, your business will have these types of coverage:

Medical expenses and lost wages

In case one of your employees gets a work-related injury or illness, worker’s compensation insurance will cover the medical expenses and lost wages. This also applies to the ongoing care costs if an employee becomes severely ill or injured on the job.

Funeral expenses

In the unfortunate event that your employee loses their life due to a work-related accident, this coverage will help with the funeral costs and with the death benefits.

4. Commercial Auto Insurance For Your Cannabis Store

If your cannabis store has its own vehicle or vehicles (for transport and/or for delivery), then you will need the commercial auto insurance included in your cannabis store insurance policy. This way, your business will have these types of coverage:

Bodily injury and property damage

If one of your vehicles is responsible for an accident that results in injury, death, or property damage this is the coverage you need to cover the legal, medical, and/or repair costs.

Miscellaneous damage

This coverage helps in the event that your company vehicle/s is stolen, vandalized, or damaged due to natural disasters.

Where Can I Get Custom Cannabis Store Insurance That Fits My Needs?

As one of the leading providers of commercial insurance in Ontario and the rest of Canada, we at KASE Insurance, understand that each of our customer’s needs is different. This is why we make sure to pay close attention to what those needs are and put together the best insurance policy to address them. As you start out your journey in opening a cannabis store in Ontario or anywhere in Canada, we will be more than happy to equip your business with the insurance it needs to lessen risks and ensure success.

So take the next step towards having peace of mind as you run your business. Contact us today or get started with a quick quote!

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