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What Is CBD Insurance? Do I Need It for My Business?

The CBD industry is undergoing massive growth, and projections for the future give us reason to expect a continuing boom in CBD’s popularity and profitability. CBD isolate, tinctures, topicals, and capsules can easily be attained from a number of online sources as well as brick and mortar locations.

Despite the comfortable position that many CBD businesses currently find themselves in, there are always certain looming dangers which have the potential to harm business models and sales. With that in mind, it’s important that CBD business owners – like entrepreneurs in any industry – consider taking action to protect their livelihood. One way of doing this is with insurance.

Do You Need Insurance for Your CBD Company?

The current state of the CBD industry is bright, and the future appears to be even brighter. But no crop-based industry is ever totally secure from the vicissitudes of nature. In August 2019, for example, a massive hail storm pummelled Central Oregon, causing as much as $25 million in damages to that area’s crop of hemp.

Similarly, the ever-changing legal landscape around cannabis makes it necessary for CBD business owners to protect their company with an insurance policy.

In this post, we’ll walk you through the two primary types of CBD insurance and how they can help to protect your business.

Two Types of CBD Insurance to Understand

CBD insurance coverage is important for any business that is seeking to protect themselves from legal or financial consequences. Insurance can be useful if the company has a claim filed against them or incurs product damages after a natural disaster. Here are the two major types of CBD insurance to know about for the security of your business:

  • Product liability coverage. Research into the myriad effects of CBD on the human body is continuing at a rapid pace, but is still an incomplete body of knowledge. As a consequence, it’s possible for CBD products to have unintended negative side effects for consumers after being ingested. Product liability coverage will help your business to cover the costs in case a claim against your product is ever filed.
  • General liability coverage. This type of insurance is a common investment for businesses hailing from almost any industry. A general liability coverage can financially protect your business from lawsuits, property damage (after a hailstorm, for example), and a host of other legal liabilities.
  • Obtaining business insurance is always a good idea, no matter the industry. CBD is no exception. Insurance can not only protect the well-being of your business, but also give you some comfort and peace of mind. Of course, we always advise seeking professional advice when it comes to legal and financial matters.

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    Have questions about starting a CBD business? We can help! Call our office today to speak to an expert and get more information.

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