Several new farm property forms have been released with an effective date of June 2025. The FP 10 27 06 25 Cannabis Property Exclusion form can be attached to the Farm Property - Farm Personal Property Coverage Form FP 00 13 04 16. This endorsement excludes direct physical loss or damage to cannabis by modifying the Property Not Covered provision of the policy. Extra expense is also excluded due to an interruption of farming operations that is attributed to design, cultivation, manufacture, storage, processing, packaging, handling, testing, distribution, sale, servicing, furnishing, possession, or disposal of cannabis. Cannabis is broadly defined to include goods or products that contain any amount of THC or other cannabinoid, whether natural or synthetic.
A. The following is added to Paragraph A.2. Property Not Covered of Coverage E – Scheduled Farm Personal Property and Coverage F – Unscheduled Farm Personal Property under Section I – Coverages:
"Cannabis".
B. The following is added to Paragraph B. Extra Expense under Section III – Additional Coverages: Extra Expense Coverage does not apply to that part of extra expense incurred, due to an interruption of farming operations, which is attributable to the design, cultivation, processing, manufacture, packaging, handling, storage, testing, distribution, sale, serving, furnishing, possession or disposal of "cannabis".
Analysis
An exclusion is added to the Property Not Covered section of Coverage E and Coverage F under Section I coverages for “cannabis”. Therefore, any cannabis found on the property would not be covered from damage by a covered peril.
Under Paragraph B Extra Expenses in Section III - Additional Coverages, extra expense coverage does not apply to any extra expense incurred because of interruption of farming operations that is attributable to the design, cultivation, manufacture, storage, processing, packaging, handling, testing, distribution, sale, service, furnishing, possession or disposal of “cannabis”. So no activity related to the growing, harvesting, selling, or distribution of cannabis is covered in any way, shape, or form.
C. For the purpose of this endorsement, the following definition is added:
"Cannabis":
1. Means: Any good or product that consists of or contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, regardless of whether any such THC or cannabinoid is natural or synthetic.
2. Paragraph C.1. above includes, but is not limited to, any of the following containing such THC or cannabinoid:
a. Any plant of the genus Cannabis L., or any part thereof, such as seeds, stems, flowers, stalks and roots; or
b. Any compound, by-product, extract, derivative, mixture or combination, such as:
(1) Resin, oil or wax;
(2) Hash or hemp; or
(3) Infused liquid or edible "cannabis"; whether or not derived from any plant or part of any plant set forth in Paragraph C.2.a.
Analysis
Cannabis is then defined in the policy so that it is clear what is considered a cannabis product. Any good or product that contains any amount of Tetrahydrocannabinol (THC) or any other cannabinoid, whether the cannabinoid is natural or synthetic, is considered cannabis by the endorsement. It’s important to note that any amount of THC will make a product fall into the cannabis category, even if it’s a trace amount.
This includes but is not limited to any plants of the genus Cannabis L. or any part thereof including stems, seeds, flowers, stalks, and roots. Also included is any compound, by-product, extract, derivative, mixture, or compound, such as resin, oil, 1or wax; hash or hemp; or infused liquid or edible “cannabis” whether or not derived from any part of any plant of the genus Cannabis L.
Includes copyrighted material of Insurance Services Office, Inc., with its permission.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.