Transporting Cannabis- What Should You Know?

Cannabis-related transportation coverage is becoming more widely available as more states legalize it. However, because it is still illegal at the federal level, insurers may be unwilling to partner with cannabis-related enterprises. As a result, agents and brokers must learn as much as possible about what is available, which businesses offer coverage, and, most importantly, whether the policy provided effectively protects their clients.

Fremont, CA: Regarding general insurance difficulties, cannabis firms incur the same general liability and property risks as other industries, including workplace accidents, property damage, crop failure, and product transportation to market. Cannabis firms, on the other hand, need more extensive commercial insurance due to the high hazards associated with moving cannabis-related items.

The availability of insurance is constantly fluctuating because of the changing market scenario, so make sure to shop around for all of your insurance and coverage possibilities.

Because legality differs by state, look for a transportation insurer who operates in the same state(s) as your insured. Because of the legal ambiguity surrounding cannabis, these firms are seen as dangerous, high-value cash operations. Other factors to consider include licensing and insurance requirements. Most jurisdictions require cannabis-related enterprises to carry specified amounts of insurance and provide additional information regarding drivers and owned and non-owned cars.

Because cannabis is primarily a cash business, financing premiums may be a hurdle for agents and brokers. According to the National Association of Insurance Commissioners, around 70% of cannabis-related firms accept only cash. Many financial institutions avoid cannabis-related firms due to legal concerns. According to the CATO Institute, just 518 of the almost 5,000 commercial banks in the United States dealt with the cannabis business in 2021. Shopping around for possibilities is critical because certain insurers can accept this cash-only business and provide legal services.

Cannabis transportation insurance policies vary according to the activity your customer runs. Some cannabis-related businesses may require coverage for a single van. In contrast, others may require armored transportation for cannabis products, necessitating significantly more coverage than ordinary cannabis-related local product delivery. Other considerations include the quantity and value of the items, how far they will be transported, and how many cars the company will have on the road at any given moment.

Harvested crops, such as cannabis and hemp, need months to cultivate before they can be distributed. This means that if the crop or products are lost, stolen, or destroyed during shipment, they are irreplaceable. Cargo insurance protects any cannabis-related products that are transported or held by the cannabis-related firm. Coverage includes seeds, seedlings, harvested crops, raw flowers, tinctures, consumables, vape pens, pipes, other accessories, and cash or securities. Cargo insurance is intended to pay out the actual cash worth of the shipment and replace any revenue loss caused by theft, fire, or accident. It should be emphasized that law enforcement seizure of items is not typically covered.

Cannabis firms can purchase cargo transportation insurance. The vehicle's owner determines the sort of insurance chosen. If you own a cannabis-related business, business auto is an excellent alternative. The company should look at both options if it uses hired and non-hired vehicles for distribution. Remember that the policy will necessitate underwriting, which includes understanding how many automobiles are on the road at any given moment, what kinds of products are being shipped, and, of course, the driver's driving records.