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Insurance usually is the last thing you think about, but it’s not the thing you want to neglect. Talking about insurance may seem boring or complicated, but with a good broker, it doesn’t have to be.
Finding the Right Broker
The first thing to know about insurance for the cannabis industry is that there are not a lot of options—yet. Regardless of which broker you deal with, there will likely only be a handful of choices available, so you want to look at more than just policy options when choosing an insurance broker.
“Find specialists in the field because we already have those existing relationships with insurance companies, we understand the cannabis space, and we have the practical knowledge,” says Michael Nituda, Vice-President – Cannabis at BFL CANADA, a Canadian-owned insurance brokerage that’s been around for nearly 35 years.
The industry is so fresh that insurance companies (the coffers that pay out when things go wrong) are still a little skittish, but the BFL team not only already knows the ropes when it comes to what a policy should cost and what it should cover, but also has existing relationships with companies so that they can get you the best deal.
“The real value is working with brokers that have strong relationships with the insurance markets and get things done, but also have experience in the industry and can help guide you through it,” explains Marcus Sargent, Vice-President – Healthcare, Life Sciences and Cannabis at BFL CANADA who has been working with the cannabis industry since 2013. “That only comes with experience and a knowledge base of the regulations and insurance marketplace. That’s the value that BFL offers.”
The Basics
When it comes to coverage, make sure you at least get the basics—or as Nituda puts it: stuff you can get sued for and stuff you can lose.
The first part includes things like liability insurance, which covers mishaps like a customer slipping on a wet floor, as well as product liability that insures your business if someone gets sick or causes other damages as a result of a product they purchased from you.
The latter part covers the loss of everything from inventory to income. If there is a fire, flood, or similar disaster these policies can trigger and help recoup lost inventory, pay for damages, and even loss of income from a business closure. Sometimes there will be little nuances in your policy on how exactly the insurance companies will pay those claims, but that’s where the folks at BFL come in.
“No one actually looks at their policy,” laughs Nituda. “There are things that retailers don’t know they can negotiate. It’s kind of like a secret menu. It’s my job to understand those nuances.”
Preparing for the ‘What If…?’
In an evolving industry like cannabis, anything can happen. Whether it’s changing regulations, growing competition, or any other new challenge your business comes up against, you want to be covered, which is why Victor Terreri, Client Executive – Platforms and Program at BFL CANADA and the rest of the team aren’t waiting for better options to become available—they’re creating them.
“We asked, ‘How do we bring insurance companies into this space and break down barriers in the financial and insurance markets? Instead of focusing on placing cannabis retailers in a market, let’s actually bring solutions to the industry space,’” says Terreri. “We’re bringing a product to retailers that is going to protect the lifeblood of their business. It goes above and beyond a normal policy.”
Looking at the bigger picture, the team identified similarities in the risks and operations of other industries and the cannabis industry. In doing so, they were able to design a program that works for cannabis retailers by tweaking these aspects to make them fit.
BFL has created a first-of-its-kind legal expense policy that protects retailers if they fall out of compliance with changing regulations or a range of other legal disputes. If a retailer receives a Notice of Proposal for a suspension of their license, this policy triggers and gives them access to a lawyer to help fight the claim and $50,000 in legal fees. On top of that, clients get access to a practicing Canadian cannabis lawyer via a 24-hour hotline to answer legal questions in real-time.
It may not seem important now, but for small businesses, expensive legal fees can stack up. “We’re trying to make it as affordable and as easy as possible, and to provide a good service and knowledge so that retailers know they’re getting value for their money. For a small investment, it can help maintain your business or keep you in business,” says Sargent. “You want to protect the business you invest your blood, sweat, tears, and equity in.”
For more information, please contact Victor Terreri, Client Executive at 416-278-1142 or vterreri@bflcanada.ca. www.bflcanada.ca/cannabis
