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CA Department of Insurance

California’s cannabis insurance marketplace continues to grow with commissioner’s latest approval

News: 2018 Press Release

For Release: June 4, 2018
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
California’s cannabis insurance marketplace continues to grow with commissioner’s latest approval
Insurance market responding to Jones’ call for insurance products for cannabis businesses, as first-of-its-kind standardized cannabis policy form is approved
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today he has approved the first Cannabis Business Owners Policy (CannaBOP) in the State of California. The American Association of Insurance Services (AAIS) designed the new CannaBOP program for cannabis dispensaries, storage facilities, processors, manufacturers, distributors, and other cannabis-related businesses operating in the state.

"Cannabis businesses need insurance coverage to help them recover when something goes wrong just as any other legalized business does," said Commissioner Jones. "This first-of-its-kind Cannabis Business Owners Policy or CannaBOP program will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses. I encourage insurers to take advantage of this new standardized CannaBOP program to file more cannabis insurance products with the department to meet the needs of this emerging market."

AAIS developed a California specific business owners policy (BOP) program for the cannabis industry, complete with forms, rules, and rating information. The 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.

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 from an admitted carrier 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 and a product liability and product recall program for the industry were announced last month. There are also approximately 20 surplus lines writers offering cannabis insurance.

Commissioner 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). In April, 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.

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Media Notes:

  • The CannaBOP program is available for AAIS member insurance companies to adopt. Member companies have to submit a separate rate filing to adopt the program and those filings would be subject to the minimum 47 day waiting period. For additional information about the CannaBOP program, please visit: http://www2.aaisonline.com/cannabop
  • More information on Insurance Commissioner Dave Jones' Cannabis and Insurance Initiative.
  • 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. In October of last year, 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 additional department staff time would be allocated to cannabis insurance filings given the critical need for this insurance coverage.   


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.

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