Colorado Marijuana Business Product Liability Insurance
A recent lawsuit in Denver, Colorado helps stress the importance that all marijuana industry businesses need to purchase general liability insurance that includes products and completed operations. Additionally, it enforces the significance of being added as an additional insured on all of your business partner’s general liability policies and require them to include products and completed operations coverage. Edible and other marijuana manufacturers may be required to purchase a separate product liability policy. Even if the lawsuit is frivolous and thrown out of court your company will still have defense costs that would be covered by a general liability or product liability policy (yours or your business partners). Please contact us to discuss product liability and your business.
A recent Denver Post article outlines a marijuana industry lawsuit. Sadly, a Colorado man shot and killed his wife after consuming edible marijuana in 2014. The company that manufactured and dispensary that sold the edible are being sued by the family members. From the Denver Post:
The lawsuit claims that the company that made the marijuana edible and the store that sold the candy to Richard Kirk recklessly and purposefully failed to warn him about the bite-sized candy’s potency and possible side effects — including hallucinations and other psychotic behaviors.
For more information please visit the denverpost.com article from 5-10-16.
Does your business have product liability in place?
We have found that most Colorado marijuana businesses are purchasing general liability insurance without products and completed operations liability. Without this coverage in place the insurance company excludes claims for bodily injury or property damage related to your products. The cost of one of these lawsuits would easily outweigh the increased insurance premium. For more information on products and completed operations insurance please visit our general liability overview page.
Do your partners have product liability? Are you additionally insured on their policy?
Another important item to note is that you require all of your business partners to also purchase products and completed operations insurance and that you are an additional insured on their policy. Your business can easily be pulled into a lawsuit, for example:
- Marijuana manufacturer purchases flower from various cultivators or growers
- Growers sell to various manufacturers
- Dispensary purchases multiple products from various marijuana manufacturers and growers
- Wholesaler sells various products to multiple dispensaries
In all of these cases the manufacturer, dispensary, grower or wholesaler could easily be pulled into a product related lawsuit due to the negligence of another party they do business with. If your business has products liability in place you would be protected from potential lawsuits.
Additionally, each of these businesses should require that all their business partners add them as additional insured on their general liability policies including products liability insurance. This will afford additional protection through their partner’s policies. Being added as an additional insured provides defense for your entity and essentially stacks their policy before yours. For more information on additional insured, please visit our website covering this topic.
Orcutt Insurance Group can help any company in the marijuana industry
If you operate a Colorado marijuana business you have a need for products and completed operations liability insurance that can be met by Orcutt Insurance Group. We will provide insurance and advice to help protect your business from potential liabilities including product liability. We can’t recommend enough that you purchase product liability and require all of your business partners to add you as an additional insured on their policies. Please contact us to discuss insurance or visit our marijuana business insurance page for additional information.
Thank you for your time.
The Orcutt Group Team