Spire Insurance Blog

Why Does My Cannabis Insurance Cost So Much?

Sticker shock? You’re not alone. Many cannabis businesses are wondering why their insurance costs are so sky-high. The answer isn’t simple—but there are ways to take control and manage the cost of cannabis insurance.

cannabis and hemp legal retail operation

If you own or manage a cannabis business, you’ve probably noticed how expensive commercial insurance can be. You’re not alone—many cannabis businesses are asking the same question: Why does it cost so much? Let’s break it down and understand what factors into the cost of cannabis insurance.

3 Main Reasons Your Cannabis Insurance Costs Are High

  1. The Industry Is High-Risk Cannabis businesses face unique risks like compliance issues, theft, fire hazards, and product liability. Insurance companies see these risks and adjust their premiums accordingly, thus affecting the overall insurance costs.
  2. Claims History If your business has filed claims in the past, insurers may see you as a higher risk. Even small claims can have a big impact on your premium.
  3. A Hard Insurance Market The entire commercial insurance industry is in a hard market, meaning there’s less competition among insurers and higher costs for businesses across the board. For cannabis businesses, this trend is even more pronounced, thereby impacting premiums.

What Can You Do About It?

The good news is there are steps you can take to manage your insurance costs. Here’s how you can reduce the cost of cannabis insurance:

1. Clean Up Your Claims History • Review past claims and address the root causes. • Implement strong risk management procedures like safety protocols and standard operating procedures (SOPs).
These steps show insurers you’re serious about reducing risks and managing the cost of cannabis insurance.

2. Increase Your Deductibles or Self-Insure • Raising your deductibles can lower your premium. • Decide if you can self-insure certain risks, like Living Crop coverage for cannabis growers. While this means taking on more risk, it can save you money in the long run and help you manage the cost of cannabis insurance.

3. Communicate With Your Insurance Agent • Talk openly with your agent about your concerns and any improvements you’ve made to your business. For example, upgrading security systems or implementing

employee training can make you more attractive to insurers and potentially lower the cost of cannabis insurance.

4. Due Diligence Around Your Insurance Program Consider getting a second opinion from another

agent. They can perform a detailed review of your insurance program and potentially find better coverage or rates.

Estimate the Cost of Your Cannabis Insurance

Don’t let high premiums hold your business back. Get started with our Cannabis Insurance Calculator to estimate the cost of your insurance.

Let’s Talk

At Spire Insurance Solutions, we specialize in helping cannabis businesses like yours navigate the challenges of commercial insurance. If you’re looking for ways to save or want a second opinion on your insurance program, let’s connect and discuss the cost of cannabis insurance further.

If you’re looking for a cannabis insurance agent, you may also like to take a look at these great resources for insurance:

Ready to Get Started?


Disclaimer: This Blog/Web Site does not provide insurance or legal advice. This site is for educational purposes only as well as to provide you with general information and a general understanding of insurance, not to provide specific legal advice or specific contract advice. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute a client relationship.

The information on this Blog/Web Site is not intended to be a substitute for professional insurance or legal advice. Always seek the advice of a licensed agent in your state pertaining to insurance and legal issues.

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