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Testing Required for Product Liability Insurance
The majority of cannabis product liability insurance companies now require their applicants to test their product. This means your cannabis product has been tested at an independent lab or possibly in-house depending on the insurance carrier. If you don’t test your product, the insurance carrier will decline your insurance request.
This mandate comes as demand for product liability insurance continues to increase as cannabis licensees are discovering what they have a risk. While testing has become a standard business practice for most cannabis licensees, a small percentage of licensees don’t test.
How does the insurance carrier verify if you’re testing your cannabis product?
Primarily through their application. Below is an example of the question being asked from potential insurance applicants:
You should note, the application becomes part of the insurance policy and those answers you provide are relied upon before issuing an insurance policy. Consequently, truthful and accurate answers are important.
What if I start testing immediately in order to obtain a product liability insurance policy?
This depends on the insurance carrier. But, most of them are reasonable with their requirements. Discussing these issues with a professional insurance broker or attorney licensed in your state will help with responding correctly and appropriately.