Insurance For CBD Companies: Why Is It Important?

Recently the law has changed in many countries making it legal to do CBD business including many hemp produced products like oil, tinctures, etc. Most industrialists are looking for an opportunity on the hemp and CBD products market.
Naturally, there are risks, as with any chance. And wherever risks occur, companies look towards insurance companies to help mitigate the risks by compensation. Here is what you need to know about CBD industry and why is it so important to have CBD operation Insurance:

1. Hemp and Cannabis belong to the same class

Due to the relation of hemp with the marijuana plant, hemp was declared as illegal until 2008.   Although there is very little THC in the hemp plant (a psychoactive cannabis compound)— it is still illegal in many states. However, if the product contains THC less than 0.3%, it can be grown and sold as per federal law.  But, if this ratio exceeds 0.3%, they are labeled as marijuana and remain illegal at the federal level.
CBD insurance protects companies from any allegations and possible loss due to the trade of hemp products.

2. CBD Oil as Alternative of Medicine

Although pharmacists are researching the applications of cannabidiol and its relational effect on the hemp plant, numerous people already use CBD as an alternative to health supplements. CBD oil has a strong claim believing that it can be used to cure or control a wide range of diseases. This extensive use has resulted in a market boom of CBD oil and has many investors looking for tinctures, gel caps and other products to manufacture.

Insurance for CBD companies gives satisfaction at both ends of the consumer and manufacturer.

3. CBD can be made from Both Marijuana and Hemp Plants

Many CBD oil manufacturers use marijuana plants for their manufacturing and use external processes to separate the THC from it. This means that there must be stringent quality control protocols and policies in place to ensure that the manufacturer of the CBD products does not surpass the legal limit set. This becomes possible with the help of CBD insurers. They devise policies and restrictions that prevent illegal products from commencing in the market.

4. CBD Products can cause Potential Injury

Although CBD products are generally swallowed, inhaled, or topically applied, somebody always can have an adverse response from the product. This might be caused by a reaction to the CBD itself, or impurities like bacteria, mold, improper or unhygienic process or inorganic materials. If the injured chooses to sue the concerned department of the CBD industry, getting CBD insurance involves means that the dispute is resolved efficiently and fairly, which protects the insured from being personally responsible for paying the settlements or vice versa.

There is a considerable amount of overlap between the conditions encountered by companies that create THC products, like those that produce CBD products. Therefore, it is recommended to think wisely when you make any decision. 


Now that we have look at the importance of CBD Insurance, its time to briefly discuss the types of insurance that the brokers offer.

Types of CBD Insurance:

Commercial General Liability:

A general liability insurance policy protects all CBD business operators against every kind of risk. It covers claims of third party liability, such as damage to property, injury to the body, etc. Typically, the policy is a requirement if you rent property, attend conferences or contracts with the partners. 

Product Liability Insurance:

This kind is the expansion of the general liability policy that offers coverage if the product causes the product consumer bodily injury or damage. This is a complex and constantly developing problem for the cannabis and hemp industry because of the differences in the types of licenses. Any CBD company that produces a variety of cannabis products, requires a good product liability policy.

Commercial Property Insurance:

This insurance covers properties such as houses, furniture, machinery and personal property used for business from fire hazards, fraud, and natural disasters. In addition, commercial property insurance also provides cover for income losses caused by these risks. This policy is particularly critical for CBD businesses that have costly finished product manufacturing facilities, physical stores or large stocks.

Cyber Insurance: 

In many CBD businesses, technology is heavily incorporated. Selling products directly to consumers and e-commerce is one of the most important growth areas for CBD businesses. Customer information gathered during e-commerce purchasing requires security and is often seen as sensitive information. On the production side of things, hemp farmers are required by state law to keep their inventory records updated.

Testing laboratories collect large quantities of sensitive data related to the product which retailers need to share with customers. Your business is legally responsible for protecting this data and cyber insurance policies that help mitigate the risk of losses from data breaches or cyber-attacks.