Cannabis, as we’re now calling marijuana, is becoming a business like any other and cannabis distributors, dispensaries and so forth will soon be able to buy business insurance policies tailored to the needs of their fast-growing business, thanks to a program announced this week by California Insurance Commissioner Dave Jones.
“Cannabis businesses need insurance coverage to help them recover when something goes wrong just as any other legalized business does,” said Jones. “This first-of-its-kind Cannabis Business Owners Policy or CannaBOP program will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses. I encourage insurers to take advantage of this new standardized CannaBOP program to file more cannabis insurance products with the department to meet the needs of this emerging market.”
Jones said the American Association of Insurance Services (AAIS) designed the new CannaBOP program for cannabis dispensaries, storage facilities, processors, manufacturers, distributors, and other cannabis-related businesses operating in the state.
AAIS developed a California-specific business owners policy (BOP) program for the cannabis industry, complete with forms, rules, and rating information. The CannaBOP program provides a package policy containing both property and liability coverage for qualifying California cannabis dispensaries, storage facilities, distributors, processors, manufacturers, and other businesses participating in or supporting the California cannabis industry.
Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. As a result of Jones’ initiative, the first filing and approval of commercial insurance for the cannabis industry from an admitted carrier was announced in November of last year, the first surety bond program for the industry was announced in February and the first coverage for commercial landlords for the industry and a product liability and product recall program for the industry were announced last month. There are also approximately 20 surplus lines writers offering cannabis insurance.
Jones hosted a national webinar titled “Weeding through the Unique Insurance Needs of the Cannabis Industry” with the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research (CIPR). In April, Jones renewed his call for insurers to offer insurance products for California’s legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions’ policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California’s cannabis businesses.