The insurance marketplace is already a confusing place, and when you introduce a product that the Federal Government and State Government can’t agree on, it only gets worse.
The Good News: There are great insurance companies that provide great coverage for the cannabis industry. These plans can be a bit pricey, depending on your specific business operations, but there are solutions for any size company in any part of the industry.
The Bad News: Not everyone likes the price for proper coverage, leading to an acceptance of subpar coverage.
When insurance carriers know that a cannabis operator cannot afford the proper coverage, they are still going to provide a CHEAP coverage option to satisfy contractual needs………. with hidden exclusions essentially barring the client from receiving any actual coverage at the time of loss.
This isn’t necessarily a bad thing if it is well documented to the client and the client is fully aware that they are essentially paying for only their certification to complete certain contracts or be able to operate in a certain space or store and not actual coverage.
The problem I have with this is that not all brokers provide full disclosure. Often, they are just trying to make a sale and they take advantage of the client through the complicated nature of insurance policies. Most policies I have reviewed have had a Products Exclusion that makes the coverage inapplicable if a loss were to happen. Despite this, the client is under the impression that they have insurance and are fully covered.
The main point to take away from this article is be careful during broker selection. You want to partner with someone who you are confident has your best interests at heart and who understands you built your business with your blood, sweat, and tears. Don’t be fooled by “too good to be true” prices and, when purchasing insurance, remember how much you spent to build your business. Don’t skimp on the protection needed to keep your business going.
Author Bio: John Burkhalter, AINS, AU, CRIS, RCIP, is the Vice President of the Cannabis Division at Assured Partners Insurance in Colorado. John has over 4 years of experience in assisting cannabis clients with their risk management, compliance, and insurance programs. You can find out more about him and Assured Partners here.