The American Association of Insurance Services has filed a Cannabis Businessowners Policy in California, noting that the growing market presents a huge opportunity for the insurance industry at large.
“The burgeoning cannabis industry represents a tremendous growth opportunity for insurers,” according to John Rich, AAIS Commercial Lines product manager. “At AAIS, we believe that it is important for our member carriers to have qualified programs in order to respond quickly to market needs.
The filing comes after the California Department of Insurance asked the AAIS in September 2017 to develop cannabis insurance products for the state’s cannabis market, in which marijuana use is legal for medicinal use and recreational use if over age 21. AAIS said it expedited development of a state-specific businessowners program (BOP) for the cannabis industry, complete with forms, rules and rating information. What’s more, AAIS said the filing is a first-of-its-kind policy.
This is yet another sign that the insurance market is responding to the growing use and acceptance of marijuana both medicinally and recreationally despite strict state regulations. According to AAIS, cannabis businesses in the U.S. are expected to generate more than $20 billion in medical and recreational sales and over 250,000 jobs by 2010. California has been at the forefront of this. In November, California Insurance Commissioner Dave Jones approved the filing of Golden Bear Insurance Co. to start covering cannabis businesses—the first commercial carrier approved in the state to do so.
Like most standard businessowners’ programs, the AAIS California 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.
AAIS has also filed a broad interline Cannabis Items and Activities Exclusion with the state of California. The mandatory exclusion endorsement will apply to all commercial lines policies in California, other than CannaBOP, and will be filed nationally to facilitate expansion of the CannaBOP program beyond California.
The CannaBOP program is effective upon approval.
AAIS bills itself as the only national not-for-profit insurance advisory organization governed by its member companies.
Source: AAIS