Cannabis Insurance in California
April 24, 2018
Today California Insurance Commissioner David Jones has repeated his request for carriers to provide insurance coverages for the cannabis industry. One admitted and 24 surplus lines carriers are currently providing coverage for these risks.
While cannabis was legalized by the state, but not by the federal government, carriers have hesitated to provide coverage for what could be considered an illegal activity. No federal prosecution of legal cannabis businesses has been reported, and with President Trump abandoning current existing federal law, chances of such prosecution are slim. The Commissioner promises to process rate filings quickly and will not object to rates that are rationally based.
Earlier, Commissioner Jones had approached AAIS to develop a program for the industry. AAIS has developed a BOP program specifically for cannabis dispensaries, storage facilities, distributors, processors, manufacturers, and other businesses active or supporting the California cannabis industry. Being a BOP policy, it does not provide coverage for larger operations such as grower, interstate transactions, and naturally does not provide coverage for any illegal or unsafe activities. We will provide more details on the AAIS policy as soon as it is available.