It’s no surprise that the rapidly-expanding marijuana industry has become a large opportunity for insurance brokers and agents. However, this highly complex industry presents a unique set of challenges.
Cannabis-related businesses have many of the same needs as any other industry — from property coverage to product liability — but with such a new and constantly evolving landscape, it can be difficult to estimate what losses could look like in relation to other industries.
So what can you expect when working with businesses in the cannabis industry?
Most common marijuana insurance claims
One of the top claims in the cannabis industry is theft, both of growing equipment and of the plants themselves. Therefore, when working with a cannabis client, it’s important to understand what kind of security measures they have in place.
Do they provide pre-employment screenings? Do they have motion detection cameras? Are they using a professional alarm system?
Many operators may be nervous about sharing too much of their business with a third party, and as a result, will attempt to handle risk control operations on their own. However, by using a DIY alarm system versus one that was professionally installed and is monitored by an alarm company and the police, they are opening themselves up to risk.
Loss due to fire or water damage is another common claim. For dispensaries, these losses can be mitigated by implementing rules about how much product can be on the showroom floor at one time. The remaining product is usually kept in a safe or vault that protects against fire or water damage. On the other hand, fire or water damage can be much worse for growing facilities with a focus on light installation as a mitigation factor.
Handling common claims
When it comes to processing the claims of cannabis businesses, one of the greatest challenges is getting all of the information necessary.
In this budding industry, business owners can be very tight-lipped as a result of historical challenges and because many of their processes are proprietary. They don’t want their information or knowledge making its way into the hands of their competitors.
The best way to obtain the information necessary to process a claim is to meet with your client in person. This helps reduce the back-and-forth and also puts their mind at ease to know that you are the one handling their sensitive information.
Additionally, be sure that you and the client are on the same page about the value of their product in relation to Living Plant coverages or determining estimated revenues. Marijuana prices fluctuate across state lines, and those prices can skew your client’s perception. Make sure you are very familiar with local pricing so you can help your client understand the true value of their claim.
An ever-changing environment
With more states legalizing medical and recreational marijuana each year, the cannabis industry’s insurance needs will only continue to grow.
In an industry that is changing daily, many cannabis-related businesses are lacking a comprehensive policy. As their agent, you can help them fill in the gaps and ensure they have the coverage that is right for their growing business.
Interested in working with Cannasure and growing your marijuana insurance practice? Get appointed.