A dispensary on Colonial Drive in Orlando closes at nine. Twenty minutes later, as the manager and an assistant carry the day’s cash to the safe, two men force their way in through the back door. Nobody is seriously hurt, but the robbers leave with cash and product, the back door and display cases are destroyed and the dispensary stays closed for three days. When the claim is filed, the owner finds that the property policy limits money to a small amount, the crime policy requires the cash to be locked in a safe after closing and the security company’s contract makes no mention of insurance. Cash, crime and security are where cannabis dispensaries face some of their most predictable losses.
Why Dispensaries Handle So Much Cash
Because marijuana remains illegal under federal law, many banks will not serve the industry, and card payments are often limited. Dispensaries can end up holding and moving far more cash than a typical retailer, and that cash, along with high-value inventory, makes them targets. The insurance program has to be sized to the cash actually on hand and in transit, not to what a standard retail store would carry.
What Crime Coverage Does
Crime insurance covers losses that property and liability policies exclude or barely address. Employee theft covers money and product stolen by employees, which is excluded from property policies. Inside the premises coverage pays for money and securities lost to robbery or safe burglary. Outside the premises coverage protects cash while it is being carried to a bank or picked up by an armored service. Some programs also include coverage for forgery and computer fraud. The limits for each should be set separately, based on how much cash moves through the business and how often.
The Conditions That Decide Whether Claims Are Paid
Crime policies written for cash-intensive businesses often come with conditions. The policy may require cash above a certain amount to be kept in a locked safe after hours, require a monitored alarm to be in service, require armored transport for deposits above a set amount or require two employees to handle cash. If a loss happens while those conditions are not being met, coverage can be reduced or denied. Owners should read the conditions as operating rules and make sure every manager knows them.
Security Systems and State Rules
Treatment centers operate under state security requirements that cover video surveillance, alarm systems and access control, and many of the same measures are what insurers look for. Recorded video covering entrances, sales areas, vaults and loading points, monitored intrusion and panic alarms, controlled access to back-of-house areas and documented opening and closing procedures all make the dispensary more insurable. They also produce the evidence needed to support a claim.
Contracted Security Guards
Many dispensaries use contracted security officers at the door and during cash handling. The security company’s insurance becomes part of the dispensary’s protection, but only if the contract requires it. The guard company should carry general liability that covers assault and battery at a meaningful limit, professional liability and workers’ compensation, and it should name the dispensary and its landlord as additional insureds. Our article on security company insurance requirements explains how to read a guard company’s coverage, and the same principles apply to dispensaries.
Employees, Robbery and Liability
A robbery affects more than the cash. Employees injured during a robbery are covered by workers’ compensation, which is required once a business has four or more employees. Customers injured on the premises may bring liability claims, sometimes alleging that security was inadequate. The dispensary’s general liability should be checked for assault and battery exclusions, and property coverage should include the inventory, fixtures and business income lost while the store is closed for repairs.
Worth Confirming on Your Dispensary’s Program
- Is crime coverage in place for employee theft, robbery, safe burglary and money in transit?
- Are the limits based on the cash you actually hold and move?
- What conditions does the crime policy impose for safes, alarms and armored transport, and are they followed?
- Does your security contractor carry assault and battery coverage and name you as an additional insured?
- Does your general liability exclude assault and battery?
- Does property coverage include inventory and business income after a robbery or burglary?
Talk to Prestige Insurance Group
We insure dispensaries, security companies and the property owners who lease to them, so we can review the whole chain of coverage. See our cannabis insurance page and our crime insurance page for more. Call the office nearest you. Se habla español.
Orlando: 407-993-2331
Miami: 305-969-8776
