Mainstream insurers anticipate federal legalization could lead to a 10x increase in cannabiz underwriting, Reuters reports:
“New policies cannot come soon enough for cannabis business owners, who say coverage is often hard to find and expensive. Cannabis dispensary owners [say] their premiums are 20% to 30% higher than an ordinary retailer would pay. Some types of vehicle coverage can cost four or five times more.”
Among other needs, its hard for PotCos to obtain directors and officers (D&O) liability policy, which protects senior executives from lawsuits, and is essential for attracting high-profile talent.
- They also struggle with coverage limits which can create operational challenges. For example, fleets can’t get enough insurance to cover entire shipments.
“There is an overwhelming need for the right kinds of insurance,” said Rocco Petrilli, chairman of the National Cannabis Risk Management Association (NCRMA), a trade group of 3,000 cannabis businesses.
- The group set up a captive insurer to offer coverage for property, general premises liability and product liability to members. It plans to add workers’ compensation and auto coverage in the fourth quarter.