Cannabis Crop Insurance: Is there insurance coverage in Colorado for your marijuana?

January 25, 2016

By Rick Cline
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Contrary to what many think, marijuana insurance is available!  Over the last 4 months, there have been many rumors as to what happened when Lloyds of London pulled out of Colorado's expanding marijuana market.  Why did they do this?  We have some answers.

  1.  In general, Lloyds of London is a carrier of last resort, not a carrier of "first" or "only" resort
  2. Many agents were selling products that we believe were not written with the right policy forms to accommodate the industry.  Claims that may be denied
  3. Lloyds was and is still concerned about the marijuana being a schedule 1 drug.  Clearly this makes the banking a difficult situation.
  4. Contrary to what many think, Lloyds did not pull out of this marijuana market in Colorado due to claims or fear of claims, rather the fact they shared over 80% of the risk.

What's the answer?

We have contracted with Next wave Insurance company, a wholesaler specializing in Cannabis Insurance.  They write many of their products through Hanover Re!  This partnership with Cannabis Insurance Solutions, Next wave and Hanover Re allows for our brokerage to place insurance on many business segments.  I have listed a few below.

  1. GENERAL LIABILITY
    1. Occurrence form A + Rated Carrier
    2. Up to $1mill in Occurrence coverage.  $2mill Aggregate
    3. Hired and Non Owned Auto
    4. Primary and Non Contributory Wording
  2. Product Liability
    1. Claims Made A + rated carrier
    2. $1mill per occurrence and $2mill Aggregate
    3. $2500 deductible
    4. $1500 minimum premium
  3. Excess Liability
    1. Occurrence A+ rated carrier
    2. Up to $10 million property limits
    3. Cargo: property in transit.  Includes cash and finished product
    4. Property Enhancements
    5. Several Deductible options
  4. Crop
    1. Non Admitted carrier A+ Rated
    2. Up to $5million in living plants.
    3. Finished stock is included in property limits
    4. Coverage for sprays and chemicals
    5. Mold/Mildew/Bugs (coming soon)
    6. Recall insurance (coming soon)
  5. Equipment Breakdown
    1. Admitted carrier A+ rated
    2. Up to $10 million limits
    3. Loss of Business Income
    4. Reputational recovery
    5. Data Compromise
  6. Cyber Liability
    1. Admitted and Non Admitted
    2. $1 Mill Occurrence
  7. Professional Liability
    1. Coverage for your employees who spray crops!  Yes, you can cover your liability if you damage or destroy a crop with chemicals.

Laboratory

Property Management

Landlord/Building Owners

Tobacco Retail Store

What do all of these coverage's mean?

Give us a call to review your insurance needs for your dispensary, crop, cultivation, laboratory or manufacturing company.

Insurance from Seed to Sale is our primary goal.  Don't trust just any insurance broker to put insurance in place on your business, look to the professionals that understand the product and insurance arena.