Congratulations, you’ve decided to jump in on the psychedelics revolution by starting your own psychedelics company.
You’ve got your business plan, your funding is in place, and you’re getting ready to launch.
But there’s one critical factor you can’t overlook: proper protection for your company.
Maybe you already have some insurance coverage for your business… but is it enough to fully meet your needs?
Or, maybe you’re not even sure where to start.
This emerging industry is still developing, with highly complex regulations and a shifting legal landscape. The risk is high, and making mistakes with your insurance could cost you more than you know.
Here are some major landmines to avoid when it comes to keeping your company safe:
Not having the right insurance (or any insurance)
Every new business requires insurance coverage to protect it in the event of a lawsuit. For most entrepreneurs in established industries, a general liability policy might be sufficient to cover the bases.
But psychedelics isn’t your average business.
For one thing, it’s an incredibly young industry. Regulations are still evolving, and the laws vary widely depending on your jurisdiction (not to mention it’s still illegal at a federal level).
Secondly, it involves the use of psychotropic substances that are administered at specific doses.
These factors make it extremely difficult to find insurance providers, as most providers don’t offer coverage for drugs that aren’t FDA-approved.
- Professional Liability/Errors & Omissions (E&O) insurance
- Product Liability insurance
- Cyber Defense/Data Breach Liability insurance
- Directors & Officers (D&O) Liability insurance
Learn all about how these policies can protect your psychedelics business here.
Not understanding your coverage
Having insurance is just step one. As a psychedelics business operator, it’s critical that you understand what exactly your insurance policies protect you from.
Are you protected from a lawsuit in the event someone claims to have been given the wrong microdose? Is how you market or manage your business putting you at risk?
Or, does your specific policy include exemptions related to non-FDA-approved drugs? If so, you might find yourself in a serious bind when you go to collect on a claim—and you’re denied.
Understanding your policies allows you to sleep well at night knowing you’re protected from certain risks, and it allows you to understand the holes in your coverage so you can work to fill the gaps with the right policies specific to your business needs and operations.
Not using a specialized broker
Using the right insurance broker can make or break your psychedelics business. This is a risky, highly regulated industry, so you can’t afford to settle for a run-of-the-mill insurance provider that doesn’t understand the specific ins and outs of the psychedelic industry.
Make sure whoever you choose as a broker is knowledgeable about the specific laws and regulations, both at the federal level and for the state(s) in which you operate. Your insurance broker should be capable of answering all of your questions in depth, analyzing your specific risks and guiding you through every step of selecting the coverages you need to protect your business.
Additionally, an experienced broker works on your behalf. That means when it comes time to submit a claim to an insurance company—which may want to deny your claim to protect its own bottom line—a broker will act as your point of contact and middleman to negotiate your settlement. Because they’re knowledgeable about this industry, they’ll understand how best to fight to have your claim cover all your legal expenses and potential penalties and fines.
Because psychedelics is such a young, high-risk industry, competent insurance brokers may be hard to come by…
This is where R&A PSYINS, a division of Rahn & Associates, comes in. They are insurance brokers with decades of experience providing specialty lines of insurance coverages for highly regulated and complex industries, such as psychedelic medicine. R&A PSYINS is at the forefront of this new psychedelic movement providing licensed practitioners, psychedelic retreats and pharmaceutical companies, both in the U.S. and abroad, with custom policies.