Professional Liability

Professional Liability Insurance, also known as Errors and Omissions Insurance, protects a               company from lawsuits that claim a financial loss occurred due to the negligent rendering of       a professional service. Professional Liability is to the cannabis industry as Liquor Liability is         to the restaurant industry. In Liquor Liability cases, firms have been sued for selling, serving,       or distributing a product that allegedly caused someone harm. As your cannabis business           will likely engage in one of those actions, the government requires you to uphold a ‘duty of           care’ within your business operations.

Due to the status of firms with cannabis licenses as professionals who are selling a controlled           substance, such firms are held to a higher standard than your average consumer, and must       maintain a legitimate standard of performance. If someone alleges that they had a negative         experience with a marijuana product you either sold or were involved in the transportation of,       they could potentially make a claim against your business. This means that you are                     accountable for the effects of your products, and any claims of negligence (regardless of           their legitimacy) could cost your firm thousands of dollars.

Professional Liability is specifically excluded from a General Liability or Business Owners                 Policy. While a General Liability policy covers bodily injury, property damage, and in some           cases, personal and advertising injury, and product or operations liability; professional                 liability provides coverage for negligence, inaccurate advice and misrepresentation leading       to a direct financial loss to the consumer. Both a General Liability Policy and Professional             Liability Policy should be secured for businesses involved in professional services, but it is         important to understand the difference in coverage provided by both types of liability                   policies, so as not to assume that a General Liability Policy will provide all necessary                   insurance coverage.