Every CBD oil business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.
This article will cover the main types of business insurance and help you find the best CBD oil business insurance.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a CBD Oil Business
The most common and comprehensive type of CBD oil business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While a CBD oil business isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your CBD oil business is sued, you could face fees totaling hundreds of thousands of dollars (or more).
Find the Right Policy at the Best Rate
Using a fully online insurance provider saves time and money and offers the most accurate quotes.
Cost of General Liability Insurance
The average CBD oil business in America spends between $350-$750 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a CBD oil business to other professional industries using the graph below:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Finding the most affordable premium starts with getting accurate quotes from highly rated providers.
Common Situations That General Liability Insurance May Cover for a CBD Oil Business
Example 1: During the bottling process in a rented facility, one of your employees accidentally trips over a stray box in the middle of the floor. Your employee is fine, but they accidentally ruin the conveyor belt. General liability insurance would cover the costs of fixing the conveyor belt.
Example 2: One of your customers sues you for adverse side effects due to having allergies to the product. However, they don't realize that they had an allergic reaction and claim that your product must be fake. General liability will cover the legal fees to prove it was their allergies that caused the symptoms as opposed to the quality of your product.
Example 3: Your marketing campaign is extremely similar to a direct competitor. The direct competitor tries to sue you. General liability can help cover any financial losses due to the alleged violation.
Check out our review of the Best Small Business Insurance Companies.
Other Types of Coverage CBD Oil Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all CBD oil businesses should obtain:
If there are any legitimate damages caused by your CBD oil products then product liability would help you cover those expenses. So if one of your CBD oil bottles was accidentally contaminated during production, you can turn to product liability insurance to keep you out of financial hot water. This benefit is especially recommended for this product because it's still not widely understood by both researchers and the general public.
If you own your manufacturing or sales facilities, you’ll need property insurance to protect you from damage caused by theft, natural disaster, or employee/customer error. A CBD oil business is dependent on its property to manufacture quality products and present the right image to both business partners and customers alike.
This coverage is generally offered in a Business Owners’ Policy (BOP)
Workers' Compensation Insurance
If your CBD oil business has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.
Read more about workers’ compensation insurance.
Business Interruption Insurance
In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.
This type of insurance is typically included in a business owner’s policy.
Commercial Umbrella Insurance
Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your CBD oil business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Business Insurance Is the Best Way to Protect Your Business
If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.
Be sure that everything you've built is safe by getting business insurance.
CBD Oil Business Insurance FAQ
Can I buy business insurance online for my CBD oil business?
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a CBD oil business?
You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my CBD oil business from everything?
Not necessarily. Certain exceptions may be written directly into your CBD oil business insurance policy, and some perils may be entirely uninsurable.
Is general liability the same as business owners?
A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.
How do I choose the best general liability insurance?
The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles.
However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.
Do I need business insurance if I already have an LLC?
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.