Running a cannabis dispensary comes with its share of challenges, and one thing you can’t afford to overlook is insurance coverage. Today, we’re talking diving into a crucial aspect of insurance coverage that every dispensary owner should consider: assault and battery coverage. We also want to highlight the difference between A&B and your General Liability policy.
The Importance of Assault & Battery Coverage
Dispensary owners, both seasoned veterans and newcomers alike, face unique challenges and risks in their operations, and this is one area your P&C broker should definitely be telling you about. One of the common risks facing dispensary owners is the potential for altercations on the premises, which can result in serious legal and financial consequences.
Picture this: A disgruntled customer comes into your dispensary and is creating a hostile environment. A member of your security team steps in to escort the customer off the property, and it turns physical. The scuffle results in an injury to the customer. Whether it was self-defense or not, the customer has every right to sue the guard and your business. That’s where assault and battery coverage comes into play.
How Assault & Battery Differs from General Liability
While general liability covers accidents, like slips and falls, it doesn’t always protect you when someone intentionally causes harm. Assault and battery coverage fills that gap, making sure you’re covered in the event violence occurs and there is a loss (i.e. your business is sued). Other scenarios that are covered include:
- Two or more patrons engage in a physical altercation
- Someone is mugged on your property
- Witnesses are affected by violence they see
- Sexual assault occurs
- Threats of harm
Why do Insurance Companies Automatically Exclude A&B?
Insurers almost always exclude A&B from general liability policies as a way to minimize their payout in the event of a loss. Additionally, with certain businesses like dispensaries, the potential for A&B claims is higher because of the presence of mind-altering substances, namely cannabis.
We get it—making decisions about insurance coverage can feel overwhelming, especially when you’re juggling countless other responsibilities, but we’re here to help. At PSA, a Hilb Group Company, we’re here to guide you through the process, helping you understand your options and tailor a coverage plan that meets your unique needs. If your broker isn’t talking to you about these issues, it might be time to switch to an insurance partner who will.
Mitigating Risk Beyond Insurance
While securing assault and battery coverage is essential, it’s equally important to take proactive steps that can reduce the likelihood of incidents occurring in the first place. By implementing preventative measures, dispensary owners can demonstrate due diligence to insurers, which can even improve insurability and premium rates. Consider:
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Employee Training: Provide regular de-escalation and conflict management training for all frontline staff and security personnel. This can help prevent confrontations from becoming physical.
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Clear Safety Protocols: Develop and enforce standard operating procedures for handling aggressive or intoxicated customers, including when and how to involve law enforcement.
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Surveillance and Documentation: Install and maintain high-quality security cameras to document incidents. This can help defend your business in the event of a claim.
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Customer Environment Management: Maintain a calm and orderly atmosphere through lighting, layout, music, and signage to discourage aggressive behavior.
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Vendor and Contractor Vetting: Ensure that third-party security or delivery services you partner with also carry their own A&B coverage.
These proactive risk management steps don’t replace the need for insurance, but they do add a crucial layer of protection, both legally and operationally.
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