legal limits / news / Insuring Cannabis: The Basics
Want to learn the basics of insuring cannabis? In this article for Law360, Jodi Green discussed the complexities of “Insuring The Ever-Growing Cannabis Industry,” starting with an overview of the rapid growth of the cannabis industry, the insurance coverage available, and common pitfalls for companies to avoid in obtaining insurance.
As discussed in the article, insurance for the cannabis industry is sparse due to the current status of federal legalization. With cannabis products (with a THC content greater than 0.3%) still federally illegal, many insurance carriers, including Lloyds of London and international carriers in Bermuda, are unwilling to serve the industry due to fears of repercussions.
‘Cannabis insurance policies implicate complex issues and require experienced scrutiny from educated providers to ensure that the policies provide appropriate coverage. Unlike most commercial insurance, standard insurance forms are insufficient because they do not address the unique needs of the cannabis industry, including the complexities of federal illegality and conflicting state and local regulations.
Companies operating in the cannabis industry should strongly consider obtaining the following lines of coverage and should work only with experienced cannabis insurance brokers and/or outside coverage counsel to ensure that coverage is adequate for the risks implicated:
Companies providing professional services (labs and extraction facilities, medical marijuana providers) should obtain E&O (errors and omissions) coverage.
You can access the entire article here or reach out for more information, including to retain Legal Limits to provide similar educational content for your organization: https://www.law360.com/articles/1123025/insuring-the-ever-growing-cannabis-industry-part-1