Moving into the cannabis industry requires finding the right team of professionals to help a business navigate into this blooming billion dollar market: the right banker, the right accountant, and the right insurance agent.

As more states legalize, the need for cannabis insurance coverage grows, but each state has its own unique rules and regulations. How do you make sure that you are working with the right insurance agent who will get you the cannabis coverage you need? Talk with your broker and make sure you know the answer to these 5 questions:

1. What are the broker fees? Other service fees? 

The cost of your policy may not be the “true” cost to you, as broker fees and other services can be added to the price. Just like you would verify the rate of any other consultant or professional, check the broker fees and other fees that come attached to your bill. Not all fees are set in stone, so there may be some room for negotiation with your broker.

2. Does the coverage you’re considering meet the requirements of your state (and/or your lender)?

Don’t just sign the paperwork without properly reviewing the coverage that you’ll receive. Each state has specific requirements that need to be met, and your lenders and investors may also have their own stipulations.  So take a close look at your coverage to make sure that it has what you need, otherwise what are you even paying for? Look especially at the limit requirements so you don’t have a gap.

3. Will you be audited by the insurance company during the policy period?

Audits are more likely for commercial insurance policies, and so it’s common to see insurers send auditors during or after your policy period to check in. Often this takes the form of an email to confirm your information. You should know how the insurer will conduct audits — by phone, in person, or by other documentation. Should you expect a site visit? These are the details you want to inquire about their auditing process.

4. Are there any crucial exclusions or restrictions?

The devil is in the details, and the gaps in your coverage can be caused by the exclusions and restrictions in your insurance policy. Does your insurance require you to lock up greenhouses? Are there restrictions to claims on major damage such as to a roof? Talk to your broker about the common restrictions and what to expect.

5. What does renewal look like?

Depending on the broker, some policies will be automatically renewed, and others will require confirmation or an audit. Be aware of when a policy auto-renews and how you will be notified to ensure you don’t overpay for a policy you may no longer need. It’s important to reconsider your insurance as the needs of your business change.

Setting a time to go over these details with your broker will get you the best cannabis business insurance, and you will be able to rely on the policy that you have reviewed and approved.

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What other questions do you think are vital to ask an insurance broker about a new policy? Let us know in the comments below.