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22 Oct How to Minimize Uncertainty in Legal Cannabis Insurance
Legal Cannabis Insurance
If you’re an insurance agent who has prospective clients in the legal cannabis business seeking legal cannabis insurance, it can be tricky to know how to cover them. They face all the risks of a typical business, plus the additional risks of transporting expensive goods as well as growing and selling a consumable product. Here are two strategies you should keep in mind when looking at their policies:
- Use excess insurance coverage to minimize the cost of uncertainty
- Insurance is inherently a mathematical balancing act. With years of data regarding premiums, claims, and the cost of various risks for any type of company in every state, information is becoming more readily available for insurance companies to better calculate the risks of various claims and incidents to yourself and your clients. However, the medical cannabis industry does not have years of data regarding operational costs, liability risks, and legal hazards that face each type of business. It can be impossible to predict what claims your clients will face and how much those claims will cost.
- Quantify what you can
- The most certain elements of your client’s cannabis business are the hard costs they incur through equipment. As the industry faces new regulations and changing degrees of legality state by state, not only will your client’s growing and manufacturing equipment need to be repaired for typical wear and predictable damage, it may need to be replaced to match future industry standards. Having an excess insurance policy in place can help your client maintain new safety and production standards with equipment replacement that might have otherwise been placed on the back burner to the detriment of their business as a whole.
Legal cannabis clients can be a risky investment not only as the legal landscape changes but because of the lack of data surrounding the industry. Hedge against that uncertainty by talking to your clients about the advantages of excess coverage as you and they navigate the new and expanding legal cannabis industry. If you want to learn more about typical insurance claims that legal marijuana businesses can face, contact Prime Insurance Company for more information