What is Cannabis Business Insurance & Who Does it Cover in Canada?

Cannabis business insurance is a type of insurance policy that covers retailers and producers of cannabis and cannabis-related products. If you operate a pot shop in Canada, this policy can help you be on the right side of the law.

For emphasis, cannabis sales are regulated in Canada. According to the Department of Justice Canada, the regulation and legalization of cannabis are derived from the Cannabis Act. The Act controls the production, distribution, sales and possession of cannabis in the country.

Therefore, to run a cannabis shop or outlet, you need to understand what the law says. Also, it would be best if you had protection against financial loss to your business. That is where business insurance for marijuana comes in.

What is Insurance for Cannabis Business?

The insurance policy for cannabis helps protect cannabis producers, distributors and retailers from certain risks, especially financial-related risks.

These persons are protected from third-party risks, being the risks posed to other people outside the business. For example, you need cannabis business insurance to cover the company from bodily injuries to customers and damage to other people’s property.

The policy can also cover your business from loss of equipment, general liability and cannabis product recalls.

Why do I Need Insurance for Marijuana?

Getting cannabis business insurance helps to keep protect both the business and the products. For example, you need it to make physical contact with third parties at the business premises or the clients’ residences.

Since cannabis regulation is required in Canada, especially in Alberta, you must have the policy. For example, in Alberta, the goal is to:

  • Reduce the proliferation of illegal cannabis production and distribution.
  • Keep cannabis out of the reach of children and underaged adults.
  • Generally, protect public health that is endangered by cannabis usage.

What does Cannabis Insurance Cover in Canada?

Generally, cannabis business insurance covers different types of liabilities, including bodily injury and damage to someone’s property. It also covers the medical expenses for the injured and legal fees if the law court sues the business.

With that in mind, here are the standard CBD insurance policies you can buy in Canada.

1.    Commercial Property Insurance

This type of cannabis business insurance protects the physical location or office of the cannabis business.

It also covers the contents, including the electronic appliances. That is from the distributor or seller’s perspective.

From the grower or producer’s perspective, the policy covers the buildings, the crops and the fields.

The commercial property cannabis insurance policy would cover these properties only if they were destroyed or damaged by storms, fires, flooding, and other perils.

2.    Slip-and-Fall Insurance

It is also commonly referred to as “Commercial General Liability Insurance (CGLI).” It provides coverage for the cannabis business from third-party claims arising from the risks relating to doing business.

Whether you caused bodily injury to someone, hit someone’s car or lost an important document, the CGLI covers it.

3.    Building Insurance

This type of policy is required if you embark on construction projects for the cannabis business. It could be something as essential as repairing or fixing the property or building a new one.

If that is the case, you need the Builders Risk Insurance to cover the business from risks posed by the construction.

The Builders Risk Insurance is temporary and typically runs throughout the construction phase. Your insurance provider needs to be kept abreast with the latest update on the construction, especially when it is complete.

4.    Equipment Breakdown Insurance

It protects the equipment or tools you need for your cannabis outlet. It is commonly purchased by producers, cultivators and growers of cannabis or marijuana.

The equipment breakdown insurance provider can cover the cost of repairing the tools or purchasing a new one if necessary.


5.    Product Recall Cannabis Insurance

Do you realize that the marijuana or cannabis you cultivated, distributed or sold poses health risks to the buyers?

Although you are in the business for profits, keeping the buyers safe is also essential.

If cannabis is harmful, consider recalling it. The Product Recall insurance policy helps cover logistics costs and reimbursement for the recalled cannabis products.

Where to Buy Cannabis Business Insurance in Canada

Are you looking for who sells cannabis business insurance in BC? There are several providers and agents. In this section, we talk about some of the policy providers in Canada.


Arthur J. Gallagher Canada Limited sells cannabis business insurance. It is one of Canada’s first brokers to underwrite policy. You can rely on them to provide professional guidance and help you pick the best policy tailored for your cannabis business.

BFL Canada

BFL Canada provides risk management and insurance services to marijuana outlets in Canada. The company operates and offers these services in over 20 states, including Vancouver, Halifax, Prince George, Toronto and Winnipeg.

The services offered by BFL Canada include but are not limited to tailored cannabis insurance policies and negotiation with the policy providers on behalf of the clients.

How to Determine the Cost of Cannabis Insurance in Canada

Consider certain factors before buying a cannabis insurance policy. Here are some of the things you want to pay attention to as they would help you make an informed decision.

The Coverage Limits

What is the extent of the cannabis business insurance? What are the specific perils or damages it covers, and what is the worth of the coverage?

The Size of Your Cannabis Insurance Business

What is the size of your business? If you are a cultivator, how large is the farm? What is the worth of the crops you plant?

The Revenue

What is the yearly revenue of your cannabis business? Your cannabis insurance provider needs to know this to help determine the payout if you were out of business at some point.

Are You Licensed?

Lastly, do you have the license to run the cannabis business? If you sell online, are you licensed to distribute the products online?

Final Thoughts: What is the Cost of Cannabis Business Insurance?

The size of your cannabis business, the risk factor, the type of policy you want to buy and the location play an essential role in the cost. Your cannabis business insurance provider should be able to assist you with getting an accurate quote when you provide those pieces of information.


Please enter your comment!
Please enter your name here


Related Articles