When starting a business, you need to consider all its aspects, especially regarding regulatory compliance. One of the main issues is business insurance coverage.
For most businesses, it is easy to find a policy. But cannabis-based companies may have a harder time. Let’s look at how marijuana laws affect Oklahoma business insurance and what you can do to find the right coverage.
The Federal vs. State Law Issue
Securing insurance is challenging because there is a conflict between federal and state laws. While Oklahoma has legalized medical marijuana, cannabis remains a Schedule I controlled substance under federal law.
Many times, this can result in coverage exclusions. Some insurers may exclude coverage for marijuana-related activities because of these federal restrictions.
Along with that, setting up a bank account can be another problem. Without access to federally insured banking systems, many cannabis businesses operate on a cash basis. As a result, that can lead to more concerns for an insurer. They may not want to provide a policy for those engaging in high-risk activities.
Can You Get General Liability Insurance?
General liability insurance is a cornerstone of business protection. These policies cover claims related to bodily injury, property damage, and other injuries.
For those businesses involved in the cannabis industry, a standard general liability policy often has exclusions for marijuana-related operations.
Even businesses not directly involved in cannabis cultivation, processing, or sales, such as landlords renting to dispensaries or transportation companies delivering cannabis products, can face issues with their insurance. For example, a slip-and-fall injury at a dispensary could lead to a liability claim. However, the insurers may deny the claim due to the business’s connection to the cannabis industry.
Fortunately, some insurers specifically offer policies to businesses in the industry.
Property Insurance
For businesses in the cannabis industry, obtaining property insurance in Oklahoma can be difficult. Most policies protect against product theft. However, since marijuana products are high-value assets that are vulnerable to theft, fire, and other perils, that can lead to policy exclusions or higher premiums.
Cannabis businesses will need to find an insurer that offers specialized property insurance tailored to the industry. These policies include coverage for cannabis inventory, equipment, and facilities.
Product Liability Insurance
Product liability insurance is important for any business involved in producing, distributing, or selling cannabis products. While all products are heavily regulated and tested, that does not mean someone might try to claim they were injured. In these cases, product liability insurance can provide protection against lawsuits.
Any business will need to secure product liability insurance that can protect against potential regulatory violations or consumer lawsuits. Typical policies may not be enough. These businesses will need to work with a company that specializes in protecting those in the cannabis industry.
Third-Party Liability Problems
Businesses not directly involved in cannabis operations can still be affected by marijuana laws. For example, landlords renting to a dispensary or grow operation may face increase liability risks. In turn, they may need additional insurance coverage.
Even those delivering cannabis products face the risk of theft, regulatory violations, or vehicle accidents involving high-value goods. As a result, they will need special insurance coverage to protect against these incidents.
Learn More About Business Insurance for Oklahoma Cannabis Businesses
There are many ways that marijuana laws affect Oklahoma business insurance. Whether directly involved in the cannabis industry or indirectly affected, business owners must carefully evaluate their insurance needs. Some companies refuse to offer policies due to the federal restrictions on marijuana.
However, there are policies that address the specific needs of those in the cannabis industry. Partnering with a knowledgeable legal team can help to make sure you stay compliant with both state and federal laws.
If you have any questions about the legalities of operating a cannabis-based business in Oklahoma, reach out to Brune Law Firm. Schedule your consultation by calling (918) 380-3628.