If your cannabis dispensary offers home or curbside delivery, it is crucial to understand the associated risks and exposures that come with providing such services.
While the option is growing in popularity for both consumers and retailers, it also raises new insurance challenges that could result in disastrous outcomes if gone unchecked.
Here are a few answers to the top questions we hear regularly from cannabis business owners that offer delivery services.
Q: If my delivery drivers have their own auto insurance, I don’t need any additional coverage, right?
A: Wrong. Your driver’s personal auto policy won’t protect your business if they’re involved in an accident while on a delivery. In fact, many personal auto policies specifically exclude coverage when a personal auto is being driven for business purposes.
If an employee uses their own vehicle (or even a rented vehicle) to deliver your products, you and your company are responsible for the vehicle, the people inside, and any accidents that may happen.
Q: Will my business insurance cover a loss in the event a driver is involved in a theft incident or loses products in his or her custody and control while out on a delivery?
A: No. Cannabis goods that are out for delivery generally come with a high price tag. As a result, your drivers are at a greater risk for theft.
Cargo or property-in-transit coverage allows your business to recover the cost of goods if products that are out on delivery are lost, damaged or stolen while being transported, loaded or unloaded.
Q: My business won’t be held liable for medical expenses if a driver has a personal auto policy and is injured in an at-fault accident, right?
A: Not necessarily. As mentioned prior, personal auto policies typically exclude coverage for business use. Simply put, this means the delivery driver’s own policy won’t kick in for costs associated with injuries, medical bills, damage to vehicles or pain and suffering.
As a result, your business could be held liable for these costs – including damages the driver may have caused to other drivers and/or property. Commercial automobile insurance can cover owned, hired, borrowed, and non-owned vehicles that your business uses.
In closing, these questions only scrape the surface of this dynamic and developing segment of the cannabis industry. Do you have specific questions about delivery service related to your own business? Please let me know.