Stock Throughput Insurance for Cannabis Companies
What is Stock Throughput Insurance?
As the owner of a cannabis operation, protecting your stock throughout its entire lifecycle should be your top priority. Stock Throughput Insurance is designed to cover your goods when in transit (air, land, and sea) and during storage. This coverage will apply whether your business owns the storage facility, or if it’s owned by a third-party.
While Stock Throughput Insurance is recommended for cannabis manufacturers, distributors, and retailers, it can be used by any cannabis operation. Stock Throughput Insurance is designed to protect your investment in cannabis finished stock until your risk and/or interest ceases.
Stock Throughput Insurance will provide coverage for each stage of the cannabis product life cycle:
- When the cannabis seeds are sourced and planted
- Throughout the growth phase
- During processing
- When stored, no matter the current stage of the operation
- While in transit (air, land, or sea)
- In some instances, coverage will continue after the final delivery has been made (if a financial interest is evident) until it reaches the buyer.
What is included in Stock Throughput Insurance?
Stock Throughput Insurance is multifaceted in that it’s composed of three separate components:
- Ocean cargo insurance
- Inland transit insurance
- Property or storage insurance
Each insurance type covers a corresponding mode of transportation, ensuring that inventory on the move – such as raw materials, semi-finished, and finished products – have proper coverage at all times. Coverage will also apply to goods that are undergoing processing and/or being kept at a storage facility, whether owned by your business or a third-party.
What are the benefits of having Stock Throughput Insurance?
The primary benefit of Stock Throughput Insurance is that it covers your raw materials, goods, and merchandise from the moment you have an insurable interest in the product to the moment that interest ceases. This is known as “cradle to grave” and should provide peace of mind that your goods will be fully covered at every stage of production.
Stock Throughput Insurance is often compared to Marine Insurance and Business Property Insurance. However, Stock Throughput Insurance offers more comprehensive coverage that includes a broader range of exposures that include windstorms, earthquakes, and floods.
That said, Stock Throughput Insurance pairs well with Cannabis Business Property Insurance when purchased separately from one another. Should a catastrophic event take place, your Stock Throughput policy would cover all damaged or lost cannabis stock/products. In contrast, the Cannabis Business Property Insurance would cover damage or loss to buildings and equipment.
Tips for Choosing Stock Throughput Insurance
Work with a qualified broker
When choosing coverage, the most important thing is to pick a qualified broker who specializes in the cannabis industry. A knowledgeable broker will be able to walk you through the process and tailor the perfect insurance package that meets your unique needs. And they will take all of your business exposures into account before putting together your insurance package.
Have a firm understanding of your business exposures
When looking for a broker, ensure they have an established relationship with multiple underwriters. Additionally, have a firm understanding of your business exposures, so you can have a good idea of what type of premium you’ll ultimately have to pay.
Ensure coverage will be enough to cover your policy
Jumping on the cheapest insurance policy may be tempting to save a little bit of money upfront, but it can ultimately cost you more than you can bear down the line. In the event of a claim, gaps in your coverage could mean you’ll be forced to pay out of pocket to make up the difference. This could potentially cost you thousands if not more. Read your insurance policy thoroughly to ensure you’re fully covered.
Get an Stock Throughput Insurance Quote
Protect yourself and your business by reaching out to Cannabis Connect Insurance, so we can help you find the right policy for your business. Contact us today to receive a quote.
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