Insurance market responding to Jones’ call for insurance products for cannabis businesses, as first-of-its-kind standardized cannabis policy form is approved
SACRAMENTO — Insurance Commissioner Dave Jones announced today he has approved the first Cannabis Business Owners Policy (CannaBOP) in the State of California. The American Association of Insurance Services (AAIS) designed the new CannaBOP program for cannabis dispensaries, storage facilities, processors, manufacturers, distributors, and other cannabis-related businesses operating in the state.
“Cannabis businesses need insurance coverage to help them recover when something goes wrong just as any other legalized business does,” said Commissioner Jones. “This first-of-its-kind Cannabis Business Owners Policy or CannaBOP program will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses. I encourage insurers to take advantage of this new standardized CannaBOP program to file more cannabis insurance products with the department to meet the needs of this emerging market.”
AAIS developed a California specific business owners policy (BOP) program for the cannabis industry, complete with forms, rules, and rating information. The CannaBOP program provides a package policy containing both property and liability coverage for qualifying California cannabis dispensaries, storage facilities, distributors, processors, manufacturers, and other businesses participating in or supporting the California cannabis industry.
Commissioner Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. As a result of Jones’ initiative, the first filing and approval of commercial insurance for the cannabis industry from an admitted carrier was announced in November of last year, the first surety bond program for the industry was announced in February and the first coverage for commercial landlords for the industry and a product liability and product recall program for the industry were announced last month. There are also approximately 20 surplus lines writers offering cannabis insurance.
Commissioner Jones hosted a national webinar titled Weeding through the Unique Insurance Needs of the Cannabis Industry with the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research (CIPR). In April, Jones renewed his call for insurers to offer insurance products for California’s legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions’ policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California’s cannabis businesses.