Weeding through the unique insurance needs of the cannabis industry
News: 2018 Press Release
SACRAMENTO, Calif. — Today, California Insurance Commissioner Dave Jones hosted a national webinar titled Weeding through the Unique Insurance Needs of the Cannabis Industry. With the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research (CIPR), Commissioner Jones brought together nearly 400 industry professionals, stakeholders and media representatives from throughout the nation to discuss cannabis industry activities, its risks and how its first and third-party insurance coverage needs are similar to other industries.
“Cannabis businesses face various insurance gaps—which means cannabis customers, workers and business owners may not have access to insurance to help them recover if there are accidents, injuries, property damage, or any of the things commercial insurance typically covers,” said Insurance Commissioner Dave Jones. “The NAIC webinar provided an important opportunity to understand where the insurance gaps are for the cannabis industry and to educate insurers about the opportunities to provide insurance. As Insurance Commissioner, I will continue to ask insurers to expand insurance coverage for the cannabis industry so that they have access to the same insurance coverage as any other business.”
The cannabis industry continues to expand as more states legalize its use for medical and recreational purposes. In 2016, California voters decided that adult-use of cannabis is legal, and nearly 22 years ago, decided that medical-use of cannabis was legal.Cannabis is now legal in 47 states (adult-use, CBD only, hemp and medical).
The webinar covered an array of topics including how conflicting state and federal laws are impacting claims, the impact of policy exclusions and gaps in available coverage. Commissioner Jones also led a roundtable discussion on the future of the cannabis market and the impact of emerging trends such as on-site consumption, cryptocurrency and blockchain.
Commissioner Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. As a result of Jones' initiative, the first filing and approval of commercial insurance for the cannabis industry was announced in November of last year, the first surety bond program for the industry was announced in February, and the first coverage for commercial landlords for the industry was announced earlier this month.
Last month, Commissioner Jones renewed his call for insurers to offer insurance products for California's legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions’ policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California's cannabis businesses. Jones has convened meetings between commercial insurance executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.
Last October, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses. The hearing revealed that while there is insurance available from surplus lines insurers, coverage is limited in scope and, until the approval announced last November, admitted carriers were not yet writing insurance. Jones also announced that department staff would be allocated to expedite cannabis insurance filings.
# # #
- Webinar replay is now available.
- Information on Commissioner Jones’ Cannabis and Insurance Initiative.
- Photo from webinar.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.