But, proving the right type of coverage exists can be difficult
There are many consultants in the cannabis industry who offer professional services when their advice as a consultant is relied upon by others. They could offer advice for testing, cultivation, and compliance. Historically, the need to prove these consultants were insured was overlooked either by choice, deficient contracts, or just simple laziness by the cannabis licensee.
However, a new trend has emerged as cannabis licensees seek proof of insurance exists from the consultants they are about to hire or currently using. Behind this change could be the insurance industry who is becoming more stringent with their terms and conditions before offering insurance. Or, the risk of using a consultant compared against a potential loss could be driving cannabis owners to seriously consider protecting their company.
To validate insurance, most companies will request a certificate of insurance produced by a retail insurance broker on behalf of their client. Below is an example of the coverage section from a certificate of insurance:
A review of the certificate of insurance indicates coverage amounts for a commercial general liability insurance policy of $1,000,000 for each occurrence. But, will this protect the company if something was to happen for the work being provided by the grow consultant. Probably not. Cannabis consultants need to have purchased professional liability insurance to protect them from their errors & omissions. A commercial general liability policy excludes this coverage and is intended to cover the risks associated with the premise. Consequently, the insurance coverages being presented by the cannabis consultant could be essentially worthless.
How to validate if my cannabis company is properly protected when using marijuana consultants?
If you have a certificate of insurance look for professional liability insurance. If in doubt, you may be able to request a copy of the insurance policy or by working with a licensed insurance broker in your state they may be able to offer further insight. Below is the section typically used for indicating if professional liability was secured:
Taking the extra time to discuss and review with the consultant the type of insurance they’ve procured is likely in everyone’s best interest should something go wrong.
DISCLAIMER: Material presented by Owner website is intended for information purposes exclusively. It is not meant for professional insurance or legal advice, to induce or solicit new clients, and shall not be construed as such. Each individual situation is unique and requires a licensed insurance broker or attorney in your state to evaluate and recommend insurance or provide legal advise respectively. Each insurance company, policy, and broker are unique with their terms,conditions, and product offerings placing the responsibility of the user to conduct and rely on their own due diligence.