The cannabis industry is growing like weeds… no pun intended! With how fast the cannabis industry is thriving and how quickly regulations are changing, cannabis businesses and their directors and officers (D&O) can be exposed to lawsuits due to mismanagement of business operations.
Because of these exposures to potential lawsuits, it’s important to protect board members, directors and officers with a Cannabis D&O insurance policy. Below we will discuss further on what D&O insurance covers, who it protects and why you need it for your cannabis business.
Who Does Cannabis D&O Insurance Protect?
D&O Insurance has three main coverages:
A – Provides protection for the personal assets belonging to the directors, officers, and their spouses
B – Gives protection to the company to indemnify directors & officers
C – Provides coverage for the cannabis business itself
Why You Should Have Cannabis D&O Insurance Policy?
- Protects personal assets of directors, officers, and spouses
- Provides litigation costs and resources to defend D&O claim allegations
- This insurance coverage will help attract new investors, lenders, vendors and board members
In conclusion, directors and officers in the cannabis businesses can be held liable for actions and decisions made in the management of the company. It’s important to have a D&O insurance policy in place to protect D&O’s personal assets, the business from lawsuits, and the costs to defend against these complaints. Equally important is to know that D&O insurance isn’t just for publicly traded companies but can be a useful resource for private companies looking to attract investors, lenders, vendors and new board members.
To learn more about how D&O insurance can provide protection for your cannabis business, feel free to contact myself or my team and we’d be more than happy to help.
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