Cannabis Business Insurance in Maryland

What Type of Insurance is Required for Any Business in Maryland?

In Maryland, most businesses must carry general liability insurance to protect against third-party claims and workers’ compensation insurance if they have employees. Commercial auto insurance is mandatory for any business vehicles. Additionally, cannabis-related businesses often require more specialized coverage, such as product liability insurance, due to the unique risks they face.

What Is The Best Insurance Company For a Cannabis Business in Maryland

Below is a list of the top insurance companies and agencies that provide coverage for cannabis businesses in Maryland:

• Are you a Maryland-licensed insurance professional offering services to cannabis-related businesses? Request to be added to this list.

Are Cannabis-related Businesses in Maryland Mandated to Have Specific Coverage?

Yes, state regulations require cannabis businesses to carry certain types of insurance. Commonly mandated policies include general liability, product liability, and property insurance. Additionally, surety bonds are often required for licensing, ensuring compliance with Maryland’s cannabis regulations.

Differences in Insurance Requirements for Cannabis, CBD, and Hemp Businesses

Cannabis businesses in Maryland face stricter insurance requirements compared to CBD and hemp operations. Cannabis businesses may need higher liability coverage and additional endorsements, reflecting the greater regulatory and financial risks. CBD and hemp businesses, while less regulated, still benefit from policies such as product liability, especially given FDA scrutiny on labeling and health claims.

Examples of Insurance Coverages Commonly Purchased

• General Liability Insurance: Covers third-party bodily injury and property damage.(Example: A customer slips and falls on a wet floor inside a dispensary, sustaining injuries.)
• Product Liability Insurance: Protects against claims related to defective products. (Example: A batch of cannabis edibles is improperly labeled with incorrect THC levels, causing adverse effects for consumers. Several customers file lawsuits for harm caused by the mislabeled products.)
• Property Insurance: Safeguards against theft, fire, and other damages.
• Workers’ Compensation: Required to cover employee injuries.
• Crop Insurance: Protects against crop loss due to environmental factors.
• Directors and Officers Insurance: Protects leadership from personal liability.
• Cyber Insurance: Shields against data breaches or ransomware attacks.

Workers' Compensation Laws in Maryland

Workers' compensation in Maryland is mandatory for businesses with employees. This coverage provides medical benefits and wage replacement for employees injured on the job. Cannabis businesses must ensure compliance to avoid fines and maintain good standing with regulatory bodies.

Health and Life Insurance for Employees in Maryland

Cannabis businesses in Maryland can provide employee health and life insurance through various methods, including purchasing group health plans for comprehensive coverage, self-funding plans for larger businesses, offering Health Reimbursement Arrangements (HRAs) to cover healthcare expenses, or assisting employees with stipends for individual coverage. To establish group health insurance, businesses must employ at least one full-time worker beyond the owner, cover a minimum of 50% of premiums, and ensure that at least 75% of eligible employees are enrolled.

Organizations Regulating Insurance in Maryland

• Maryland Insurance Administration (MIA): Oversees insurance licensing and compliance across the state.
• Commissioner of Insurance: Enforces Maryland’s insurance laws and consumer protection standards.
• Maryland Attorney General’s Office: Investigates fraud and ensures fair market practices within the insurance industry.

Importance of a Knowledgeable Insurance Agent

An insurance agent experienced in cannabis insurance can navigate the complexities of Maryland’s regulations, secure tailored coverage, and ensure the business is fully compliant. Such expertise minimizes risks and helps businesses find cost-effective solutions.