Last Updated: February 22, 2024, 10:15 am by TRUiC Team

Medicinal Herbs Business Insurance

Getting insurance for your medicinal herbs business is essential.

Medicinal herbs businesses need to be protected against things like claims of false advertising, product liability, and breaches of contract.

For example, an employee overstates the benefits of one of your herbal medicines, or customers claim that consuming your herbs has made them severely ill.

We’ll help you find the most personalized and affordable coverage for your unique business. 

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Medicinal Herbs Business

General liability insurance is — generally speaking — one of the most important insurance policies for medicinal herbs businesses. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

The following insurance policies are also commonly used by medicinal herbs businesses in conjunction with general liability:

  • Workers’ compensation insurance: Provides financial assistance to workers for their medical bills/lost wages if they are injured or ill due to a work-related activity.
  • Product liability insurance: Covers the damages if an individual becomes ill due to one of the herbs or herbal products your business sold them.
  • Business interruption insurance: Covers lost revenue and reopening expenses if your business is forced to temporarily close due to an event like a tornado or a fire.

Insurance providers are generally categorized into these two groups: 

  • Traditional brick-and-mortar insurers — Those with a storefront (e.g., The Hartford and Nationwide).
  • Online insurers — Those based entirely online (e.g., Next and Tivly).

On the whole, small businesses tend to opt for online insurers as they prefer the balance they offer between reliable insurance and affordable prices.

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Cost of General Liability Insurance

The average medicinal herb shop 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 medicinal herbs business to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • 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.

Graph showing average price of general liability insurance prices per industry

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Find the Best Rate

Discover the best coverage at the lowest rate in our affordable business insurance review.

Common Situations That General Liability Insurance May Cover for a Medicinal Herbs Business

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Example 1: A customer visits your shop looking for a gift and opens a sample bottle to get an idea of the scent. Upon inhaling the scent, they tip the bottle too close to their face and begin choking on the fumes, falling backward into your glass display shelves. General liability insurance will likely cover medical expenses, repair costs, and other damages in a lawsuit.

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Example 2: New investors are touring your shop to get an idea of how your daily operations work. The tour takes place after hours during clean-up, and one of the investors trips over a vacuum cord, breaking their arm in the fall. General liability coverage will likely pay for any damages associated with the accident.

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Example 3: As you are unloading a delivery in the shop, you accidentally drop the pallet onto a guest vendor’s display stand, breaking the stand and damaging thousands of dollars worth of product. General liability insurance will likely cover the damage to their property.

Other Types of Coverage Medicinal Herbs 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 of the most common types of coverage:

Workers’ Compensation Insurance

If you have one or more employees, you will likely be required to carry workers’ compensation insurance by state law. This important insurance coverage is designed to pay for medical expenses if any employees become injured or ill in a work-related incident.

Product Liability Insurance

This type of insurance is important for businesses that create their own line of medicinal herbs to sell to the general public or sell other suppliers’ products. If a customer becomes ill or sustains an injury related to the products you sell, product liability insurance will cover damages.

Business Interruption Insurance

This type of insurance coverage works to protect your business if have to close your doors for an extended period of time due to an accident involving fire, tornado, vandalism, or certain other events. Your policy can help to cover some of the losses in reduced revenue and ensure that you can reopen your doors once again.

Commercial Property Insurance

If you own the building that your shop operates out of, you should invest in commercial property insurance. This type of coverage helps to protect not only your actual building in the event of a fire or natural disaster but all of the business items and inventory inside as well.

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 medicinal herbs 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.

Medicinal Herbs Business Insurance FAQ

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.

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.

"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.

It is imperative for the financial security of your medicinal herbs business that it obtains adequate business insurance before it launches.

Doing so will not only protect it from significant financial losses but also avoid the possibility of legal liability in instances where specific policies such as workers’ compensation insurance are a legal obligation.

Not necessarily. Certain exceptions may be written directly into your medicinal herbs business insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

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.