Limit your exposure: How liability insurance can protect CBD manufacturers

(This is an abridged version of a story that appears in the March issue of Marijuana Business Magazine.)

CBD manufacturers risk paying thousands of dollars in legal expenses if they lack insurance to deal with rash-inducing topicals, exploding vape pens and other problems connected to their products.

Product liability insurance is especially important for CBD companies hoping to stock their products on the shelves of major retailers. Many big-box stores require at least some coverage as part of their retailer agreements, experts said.

In simple terms, a product liability policy essentially covers bodily injury and property damage that happens as a result of the use of your product, said Brett Lipton, vice president of Castle Rock Capacity Insurance Agency.

“My contention is, if you’re putting a product in the public’s hands, then you really should have product liability insurance, regardless of what the product is,” Lipton said

To read more about liability coverage in the hemp industry, click here.

One comment on “Limit your exposure: How liability insurance can protect CBD manufacturers
  1. Robin Standlee on

    The very idea that this is a thing- going without product liability insurance- tells me there are many producers who should not be in business.
    At some point the wholesale prices of CBD products need to reflect the true cost of running a food manufacturing company with all its regulations and risks. At present, they do not. You can be sure if there is a problem with the end product, no matter how many hands have touched it since it left your facility, that they will be coming back to the manufacturer. That is one of the reasons GMP is so important. Liability insurance is for the last resort. A good contract that spells out limited warranties and the need for full panel testing upon receipt of the product helps too.


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