Product Liability Insurance for CBD


The CBD and Cannabis business is a booming industry. With more states passing legislation on the legalization of marijuana products, in 2018 alone hundreds of new cannabis products have come to market.

For these to reach their full sales potential, many need to appear in retail markets, pharmacies, and be added to web stores. In order to do so or be properly protected from claims and law suits, Cannabis based companies need to have their CBD products protected with a Product Liability Insurance policy.

Who Should Have Products Liability Insurance?

Anyone that is responsible for the design, manufacture, distribution or sale of a component or end user product. This applies to any individual or business that manufactures their own product or even if the product’s manufacturing is subcontracted out by another operation. Keep in mind that in the event that your operation is not technically manufacturing the product, if you designed the product, you are liable for it;  if you directly import the product, you are liable for it; if your name is on the product, you are liable for it.

Austin Insurance Group currently offers Product Liability Insurance for the CBD industry in Texas including coverage for:

CBD Vape Liquids
Dietary Supplements
Pharmaceuticals
CBD SkinCare Products
Foods and Snacks
Nutraceuticals

CBD Hemp Oils and products
Prescription Medicines
Topical Balms, Gels and Creams
Concentrated CBD Oils
Lip Balms
CBD Infused Drinks

Is Product Liability Insurance for CBD Difficult to Obtain?

Not for us. Product Liability for the CBD insurance market is much smaller and many insurance carriers will not insure this product, but Austin Insurance Insurance Group is one of the few Texas agents who can offer you coverage.

Insuring your CBD Products through our agency offers you optional benefits such as:

  • Product Liability Coverage for new and start-up businesses
  • Product Liability Coverage for discontinued products or prior acts
  • Product Liability Coverage for oils, concentrates, skin salves, food products, and more.
  • Premises Liability for your Retail, Distribution, and Manufacturing facility.
  • Blanket Vendors Additional Insured Endorsement Included
  • Waiver of Subrogation Endorsement Available
  • Primary & Non-Contributory Endorsement Available
  • Options available for product recall expense coverages

What is the average cost of insurance for CBD, Hemp, or Cannabinoid Products?

There is typically no “out of the box” price for the cost of insurance for a cannabis products, so terms like typical, average, standard, customary, or normal do not have any bearing. Several factors are taken into consideration with regards to rating, such as; the nature of the product, your sales stream, the annual sales volume, the origin of the product. In the same way asking the average cost of a CBD product means little or nothing when looking at an oil or concentrate, because no 2 products are the same. Prices can vary greatly, the same applies to insurance, and the company purchasing it.

So… What Does Products Liability Insurance Cost for a Cannabis product?

Products liability insurance costs for CBD is much like any other liability insurance product. There is no real average rate because they are based on the specific type of product you manufacture, retail or market. There are some products that pose very little potential to cause harm or damage and there are others that have a higher propensity to be risky, and therefore carry higher premiums. However, we can tell you that an entry level policy for a CBD company could cost you several thousands of dollars per year.

 

What Factors Play a Role in Products Liability Insurance Premiums for CBD Companies?

A Products Liability Insurance Policy is rated on several factors.

  • What is the product you are insuring
  • If you are not manufacturing the product, does the manufacturer name you as an additional insured on their policy?
  • How many of these products will be distributed into the market
  • What are they used for and who will be using them
  • Who formulated them
  • How long are they intended to last
  • What are the ingredients
  • Who is manufacturing your product
  • Where are they manufactured
  • How clearly defined are the usage instructions, directions and guarantees and or warranties that are provided with the product
  • What claims does the manufacturer or distributor make about the product, either in writing, demonstration or in media.

How much Products Liability Insurance do I need for my CBD Company?

The amount of coverage required can vary depending on:

  • How much coverage your vendors require to stock your product?
  • What do I stand to lose if our company is sued?
  • Because claims or allegations against cosmetic manufacturers can be severe or even more likely, you may want to discuss your insurance requirements with vendors or an attorney before making any decisions.

Because every company’s offerings and operations are different, underwriting a products liability insurance policy for your product is complicated. If you need a quote on Products Liability Insurance Coverage, please complete a product liability quote request. Austin Insurance Group currently offers Products Liability Insurance Policy Coverage throughout the state of Texas.  Call for a quote today.