A cultivation facility in Apopka runs its grow rooms on a carefully balanced system of lighting, air conditioning, dehumidification and irrigation. In August, a compressor on one of the rooftop units fails on a Saturday night, the alarm goes to a phone that nobody checks and by Sunday afternoon the temperature and humidity have ruined a flowering room. The building is fine. The loss is the crop, the cleanup and weeks of lost production, and the property policy was not written to pay for any of it. Grow facilities need coverage built around the systems that keep the plants alive.
The Building Is Not the Biggest Exposure
In a grow facility, the improvements and equipment are often worth more than the building itself. High-intensity or LED lighting, HVAC units, dehumidifiers, irrigation and fertigation systems, environmental controls, backup generators and security systems all need to be included at full replacement cost. When a cultivator leases the building, those improvements usually belong to the tenant and need to be insured on the tenant’s policy, not the landlord’s.
Equipment Breakdown Is Essential
A standard property policy covers sudden damage from causes like fire or wind, but it does not cover the mechanical or electrical failure of equipment by itself. Equipment breakdown coverage fills that gap. It pays to repair or replace equipment that fails from electrical arcing, motor burnout, compressor failure or similar breakdowns, and it can include coverage for spoilage and business income lost as a result. For a grow facility, where the equipment keeps the crop alive, equipment breakdown is not an optional add-on. It is one of the core coverages in the program.
Climate Control and Spoilage
Florida’s heat and humidity make climate control failures especially dangerous. Spoilage coverage, often attached to equipment breakdown, can pay for product lost when a system fails, but the terms matter: some policies cover only finished products, some include plants in certain stages and many limit the amount. Utility service interruption coverage is a separate issue. If a storm or grid failure cuts power away from the property, standard business income coverage may not respond, so it should be added. Backup generators, monitored temperature and humidity alarms and a response plan for after-hours failures make the facility more insurable and reduce the chance of a total loss.
Coverage for Growing Plants
Most property policies exclude growing plants entirely. Some specialty markets offer coverage for plants in grow rooms or greenhouses, usually for named causes of loss such as fire, theft or equipment breakdown, with sublimits and a defined way of valuing the plants. Mold, pests and disease are commonly excluded. Finished and packaged product is easier to insure, but cultivators should confirm whether it is valued at cost or at selling price. Our article on what cannabis insurance does not cover explains the most common exclusions.
Fire and Electrical Risk
Grow facilities draw heavy electrical loads for long hours, and electrical fires are among the most serious losses in the industry. Underwriters want to see electrical work permitted and installed to code, regular inspections, sprinklers where required and housekeeping that keeps combustible materials away from lighting and panels. Processing with flammable solvents adds a separate, more severe exposure and should be disclosed in detail.
Business Income and the Time to Recover
After a loss, a grow facility does not just repair the building. It has to replace equipment, possibly pass inspections and replant, and the first harvest after a loss may be months away. The period of restoration in the business income coverage should reflect that full timeline. A policy written with a short restoration period or a low business income limit can leave a cultivator without income long before production returns.
Worth Confirming on Your Grow Facility
- Are lighting, HVAC, irrigation and environmental controls insured at full replacement cost?
- Do you carry equipment breakdown coverage with spoilage included?
- Is utility service interruption added to business income?
- Are growing plants covered, for which causes of loss and at what valuation?
- Are temperature and humidity alarms monitored after hours, and is there a backup generator?
- Does the business income period of restoration allow time to replant and harvest?
Talk to Prestige Insurance Group
We work with cultivators and processors to build property programs that cover the systems their operations depend on. Learn more on our cannabis insurance page. Call the office nearest you. Se habla español.
Orlando: 407-993-2331
Miami: 305-969-8776
