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Cannabis Insurance - A Product with Penty of Pitfalls

Posted By Administration, Tuesday, July 24, 2018

The PIA Western Alliance states of California, Oregon, Washington, Nevada and Alaska have legalized the recreational use of marijuana. Other states have legalized it as well or will soon make its use legal.

Patrick McManamon is the founder and CEO of Cannasure Insurance Services. In an interview with Insurance Business America he said with legalization has come more interest from business owners for insurance. “California, for us, has always been an important state, but — we’re usually lagging behind in other states — now California probably accounts for more than a third of monthly submissions that we get.”

Right now there is a lot of underinsurance for those getting the insurance.

“I think it’s [the insurance market] grown rapidly in probably the last two years or so, much more so than it was in 2007 when we started. We’re seeing a few more markets come into play, but they’re still picking and choosing. They’re not offering total comprehensive coverage all across the board,” he noted.

And that — McManamon said — is a problem. “You can have some that will not provide any coverage for vape pens or even potentially the effects of marijuana from a product liability standpoint. Others are going to have some potential exclusions related to pesticides or fertilizer or any other type of issue like that, so you just have to really look at each one and examine each one carefully,” he added.

Cannabis insurers are struggling right along with those they insure.

“We just got non-renewed for our E&O insurance because of the operations of the industry that we’re in, so that was a new, interesting one for me,” he said.

The bottom-line for the line of insurance? McManamon said it is going to require patience and perseverance.

He said, “It takes a long time — it’s still obviously very, very early — [and] a lot of education. The market is changing, the products are new. It seems on a daily or weekly basis, you have a new product. Roll up your sleeves and understand this market because it is moving so fast and it’s dynamic.”

Source link: Insurance Business America

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