Jim Finnel
Fallen Cannabis Warrior & Ex News Moderator
London markets and some domestic insurers are underwriting products for businesses that cultivate and sell medical marijuana, specialty brokers who distribute the policies tell me.
Like brokers serving other industries, these medical marijuana insurance specialists also provide their clients with traditional risk management expertise to reduce losses and make their exposures easier to place.
In 1996 when California voters approved marijuana use for medical purposes, some Business Insurance colleagues jokingly asked when group health insurers would have to pay for someone's pot use.
Instead, I am hearing that risk management and loss control are popular topics at conferences serving the medical cannabis industry.
Studies estimate that the industry's revenues range from $10 billion to $100 billion, while observers say the business is in its early, budding stage.
Insurance brokers say the businesses could grow to need in-house risk management departments, like large liquor or cigarette manufacturers. Currently, though, most buyers of cannabis-related commercial insurance are far from Fortune 500-size businesses.
Still, some are “extremely large indoor grow operations,” with 20,000-square-foot buildings needing insurance, says Derek Ross, founder of 420 Insurance, a Woodland Hills, Calif.-based niche broker that places coverage in several states that allow pot for medicinal use.
The number 420 is a counterculture reference to cannabis.
Insurance available for medical marijuana and hemp businesses range from theft coverage for valuable crops to workers compensation policies for retail dispensary employees, says Michael Aberle, national director of MMD Insurance Services, a wholesaler and unit of Statewide Insurance Services Inc. in Rancho Cordova, Calif.
Property and general liability policies can be customized for industry businesses along with auto liability for operations delivering medical marijuana to patients' doorsteps, Mr. Aberle says. The auto liability policies resemble those sold to pizza delivery businesses, he explains.
“If you remove the element of marijuana, you literally have the same services (and insurance policies) any other industry needs,” Mr. Aberle says.
Other insurance includes product liability policies protecting kitchens baking the “edibles” that dispensaries sell and professional liability coverage for doctors writing prescriptions and attorneys advising marijuana establishments.
The medical marijuana industry is highly data driven, so available data breach policies would pay should hackers steal a dispensary's client information, Mr. Aberle says.
Regardless of industry, specialty brokers often won't disclose their insurance markets for fear of tipping off potential competitors. The medical marijuana brokers similarly declined to name insurers that manuscript policies for their clients, although they say the insurers are rated A.
But some insurers have declined to underwrite medical marijuana risks, Mr. Ross says. One problem is that pot is illegal under federal law, despite state medical marijuana laws.
But it appears that the marijuana industry will continue to grow, which could cause headaches for employers that are not prepared. It also means it will need more insurance and risk management services, especially if recreational use of pot becomes legal.
Consider that only 54% of California voters recently rejected legalizing recreational marijuana use. But voters under age 25, by a 2-to-1 margin, voted to legalize it. Legalization supporters expect the outcome could be different in the 2012 election because more young voters turn out to help choose a president than during midterm elections.
NewsHawk: User: 420 MAGAZINE
Source: businessinsurance.com
Author: Roberto Ceniceros
Copyright: 2010 Crain Communications, Inc.
Contact: Contact | Business Insurance News, Analysis & Articles
Website: Cover options sprout for marijuana growers - Business Insurance
Like brokers serving other industries, these medical marijuana insurance specialists also provide their clients with traditional risk management expertise to reduce losses and make their exposures easier to place.
In 1996 when California voters approved marijuana use for medical purposes, some Business Insurance colleagues jokingly asked when group health insurers would have to pay for someone's pot use.
Instead, I am hearing that risk management and loss control are popular topics at conferences serving the medical cannabis industry.
Studies estimate that the industry's revenues range from $10 billion to $100 billion, while observers say the business is in its early, budding stage.
Insurance brokers say the businesses could grow to need in-house risk management departments, like large liquor or cigarette manufacturers. Currently, though, most buyers of cannabis-related commercial insurance are far from Fortune 500-size businesses.
Still, some are “extremely large indoor grow operations,” with 20,000-square-foot buildings needing insurance, says Derek Ross, founder of 420 Insurance, a Woodland Hills, Calif.-based niche broker that places coverage in several states that allow pot for medicinal use.
The number 420 is a counterculture reference to cannabis.
Insurance available for medical marijuana and hemp businesses range from theft coverage for valuable crops to workers compensation policies for retail dispensary employees, says Michael Aberle, national director of MMD Insurance Services, a wholesaler and unit of Statewide Insurance Services Inc. in Rancho Cordova, Calif.
Property and general liability policies can be customized for industry businesses along with auto liability for operations delivering medical marijuana to patients' doorsteps, Mr. Aberle says. The auto liability policies resemble those sold to pizza delivery businesses, he explains.
“If you remove the element of marijuana, you literally have the same services (and insurance policies) any other industry needs,” Mr. Aberle says.
Other insurance includes product liability policies protecting kitchens baking the “edibles” that dispensaries sell and professional liability coverage for doctors writing prescriptions and attorneys advising marijuana establishments.
The medical marijuana industry is highly data driven, so available data breach policies would pay should hackers steal a dispensary's client information, Mr. Aberle says.
Regardless of industry, specialty brokers often won't disclose their insurance markets for fear of tipping off potential competitors. The medical marijuana brokers similarly declined to name insurers that manuscript policies for their clients, although they say the insurers are rated A.
But some insurers have declined to underwrite medical marijuana risks, Mr. Ross says. One problem is that pot is illegal under federal law, despite state medical marijuana laws.
But it appears that the marijuana industry will continue to grow, which could cause headaches for employers that are not prepared. It also means it will need more insurance and risk management services, especially if recreational use of pot becomes legal.
Consider that only 54% of California voters recently rejected legalizing recreational marijuana use. But voters under age 25, by a 2-to-1 margin, voted to legalize it. Legalization supporters expect the outcome could be different in the 2012 election because more young voters turn out to help choose a president than during midterm elections.
NewsHawk: User: 420 MAGAZINE
Source: businessinsurance.com
Author: Roberto Ceniceros
Copyright: 2010 Crain Communications, Inc.
Contact: Contact | Business Insurance News, Analysis & Articles
Website: Cover options sprout for marijuana growers - Business Insurance
