This is part of a series of articles in the Insurance Journal’s annual review Cannabis Insurance Summit October 14. You can find more articles from the top to the bottom of this one.
Employee professional liability insurance, exclusions, on-site lounges, testing labs – there are as many pitfalls as there are opportunities for brokers looking to get into the cannabis insurance business.
Insurance Journal found a handful of cannabis brokers to take four minutes on their three hottest industry topics in a panel called “Broker Quick Hits” at Insurance Journal’s annual Insuring Cannabis Summit on October 14. .
“The challenge we have with our contracts is that they limit coverages, increase deductibles and don’t even provide the coverages that the industry needs,” said Jesse Parenti, director of programs for PCF Insurance Services, director of programs at Nine Point Strategies and program director for PizzaSurance. “For us, we need to challenge the industry to get better contracts and be able to provide better coverage for our customers.”
Exclusions were another point he insisted on. According to Parenti, there are many exclusions in policies sold to cannabis operators that could end up excluding the lion’s share of their coverage.
“You need to be aware of exclusions more than any other industry I’ve ever worked in,” he said. “One of the most important to know is obviously the health risk exclusions. The one to be aware of is a vape or hardware exclusion. It has to do with hardware being made in China rather than the US and carriers can and will exclude coverage. So, look at your exclusions.
TJ Frost, president of Symphony Grow, which works with the cannabis, hemp, and CBD industries, spoke about what he sees as a big opportunity for those who insure cannabis businesses: on-site lounges.
“As more states become legal and allow consumer fairs, it’s important to understand what’s out there for insurance coverage,” Frost said. “If they have past or current policies in place that don’t actually allow on-premises consumption, many multi-state operators are now buying those licenses or having those additions to their dispensary or other portfolio and often you’ I I will find that their current policy does not allow on-site consumption or allow a lounge.”
Danielle Hernandez, cannabis practice manager at Gilbert Insurance Group, saw another potential opportunity for those who insure cannabis.
Hernandez believes that not only does product testing provide opportunity, but those unfamiliar with the company could easily pass over their heads, he suggested.
“Testing is such an important topic for those of us in this space,” she said. “It is frequently discussed in political language and in applications of operators who end up being part of politics and keeping in mind that political language follows the rules and regulations of the state. This is where understanding the testing requirements is imperative to ensure your customers are covered in the event of a claim.
Nathan Bosza, National Cannabis Program Manager at ALKEME Insurance Services, stressed the importance of working directly with cannabis program underwriters or specialized cannabis wholesalers to help overcome barriers.
“This space changes every day,” Bosza said. “At the federal level, we have new laws at the state, county and city level. We have new license insurance requirements that we must comply with. So it’s really important to work with these underwriters so that we can overcome these new requirements that we have.
Cyber liability is one of the most important considerations in business, according to Danny Bozzuto, co-founder of Cannabis Connect Insurance and partner at Bozzuto & Associates.
He urged brokers to talk to their clients about risk management protocols, such as two-factor authentication or security checks and password management, which he says will save them from filing many claims. .
“And if you can really find a good IT partner, you’ll be able to help your customers,” he said. “And I’ve seen claims here ranging from $3,000 to $600,000 for small and medium businesses. And from there, I talk a lot about supplier management. And when we first entered this space, that was one of my main goals because most of my clients, most of my prospects were using verbal contracts, verbal agreements.
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