Impact of Coinsurance on your Business Property and Cannabis Coverage

Every cannabis business goes through the process of trying to determine the proper amount of property insurance and understanding key policy terms.  One of those terms is named coinsurance.  Basically, it's a calculation used by insurance carriers to determine the amount of a loss paid after a claim for business personal property coverages.  Property means building, cannabis,  grow equipment, computers, display cases, tenant improvements, or other property owned by the cannabis company.  Commercial liability policies will not have coinsurance.

Coinsurance is always expressed as a percentage.  For example, a cannabis licensee may insure their grow equipment for $500,000 with an 80% coinsurance factor.  A retail marijuana store might insure the building for $350,000 and cannabis stock for $100,000.  Other coinsurance factors may include 90% or 100% as insurance policies will have one coinsurance factor.

For this reason, a online tool is available to the cannabis industry to help figure out the impact of coinsurance for determining their property values.   You ba...more

FOR IMMEDIATE RELEASE:
  February 21, 2018 (#021)

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SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today he has approved the first surety bond program for the cannabis industry in the State of California. Continental Heritage Insurance Company is the first insurer in the state to be approved to offer surety bonds for the cannabis industry.

“Cannabis businesses should have insurance coverage available to them just like any other Califor...more

National Cannabis Industry Association Forms Insurance Sector Committee

Two cannabis Surplus Lines Brokers Cannasure and Next Wave Insurance have formed a committee to change the cannabis insurance industry courtesy of the National Cannabis Industry Association ("NCIA").  For NCIA members and non-members, the NCIA offers several committees involving industry experts on a variety of topics.  As such, a committee to tackle and parse through the myriad of issues associated with insuring cannabis made up of lawyers and insurance professionals. 

The chairperson is Cannasure's very own Mr. Patrick McManamon with Mr. Ian Stewart, Esq. as its vice chairperson from the law firm of Wilson Elser.  The committee has two members from Next Wave Insurance, Mr. Michael Aberle and Mr. Jeff Ward to be certain they are properly represented.  

The first committee of its type appears mandated to discuss risk management, insurance coverage issues, and deciding where the next lawsuit will arise involving insurance.  Cannasure and Next Wave Insurance are both licensed surplus lines brokers that operate throughout the United States appointing insurance brokers...more

California Requirements:  Licensing Bonds for Cannabis Businesses

The Bureau of Cannabis Control has indicated through the California Code of Regulations a bond will be needed as part of the annual license application requirements under Section 5002.   This means retailers, cultivators, manufacturers, distributors, laboratory testing, and microbusinesses will need to buy a bond. 

Section 5008 (Bond) of the code states:

A bond is a type of insurance product with features of a loan.  The face amount of the bond is paid to the party requesting their interests be protected based on certain conditions.   In this situation, the State of Caifornia.  Bonds are priced based on credit history, net worth, and business experience with the premium is paid annually. 

Demand is likely to be strong for finding the right type of bond.  Therefore, applicants are encouraged to begin the process early.

For more information, please visit Californiamarijuanabond.com

Correct Job Classification and Cost Containment are Two Areas to Reduce Premium

Workers compensation insurance is a necessary product when you have employees with each state mandating this type of coverage.  In Colorado, there are several key areas to consider to potentially reducing your premium if you're a cannabis operation. 

The correct job classifications of your employees is critical.  There is a significant difference in premium for employees working at a store versus a cultivation facility, bakery, or extraction company.  In fact, Greenpoint Insurance Advisors, LLC was the first insurance broker to have the workers compensation insurance industry recognize a different classification code for employees working at a extraction company as opposed to other manufacturing or bakery job classifications.  This change resulted in certain clients saving thousands of dollars on their insurance premiums in Colorado.  

Another area to reduce your insurance premium is through a "Cost Containment" program.  Essentially, a program that incorporates certain safety standards within the company that leads to a percentage reduction in your pr...more

Correct Job Classification and Cost Containment are Two Areas to Reduce Premium

Workers compensation insurance is a necessary product when you have employees with each state mandating this type of coverage.  In Colorado, there are several key areas to consider to potentially reducing your premium if you're a cannabis operation. 

The correct job classifications of your employees is critical.  There is a significant difference in premium for employees working at a store versus a cultivation facility, bakery, or extraction company.  In fact, Greenpoint Insurance Advisors, LLC was the first insurance broker to have the workers compensation insurance industry recognize a different classification code for employees working at a extraction company as opposed to other manufacturing or bakery job classifications.  This change resulted in certain clients saving thousands of dollars on their insurance premiums in Colorado.  

Another area to reduce your insurance premium is through a "Cost Containment" program.  Essentially, a program that incorporates certain safety standards within the company that leads to a percentage reduction in your pr...more

Golden Bear Insurance Company Using Per Cannabis Plant Valuation for Crop Insurance

by Greenpoint Insurance Advisors, LLC 
 

Filed with the California Department of Insurance, the first admitted cannabis insurance carrier Golden Bear Insurance Co is using a per plant valuation to calculate how much will be paid should a claim occur.  For example, a fire burns 200 cannabis plants considered "Flowering Plants," then $150 per plant or $30,000 would be paid for this type of claim according to the policy forms filed with the Department of Insurance.  A mother plant will pay $800 per plant if you have a covered loss. 

This is a unique approach we have not seen before with other cannabis crop insurance carriers.  Keep in mind, there have been only two carriers offering this type of coverage.     Historically, other crop  insurance policies would base the settlement on either a replacement cost or actual cash value depending on the carrier.   Determining the right value using replacement cost or actual cash value is tricky due to factors such as market conditions, genetics, and demand for certain strains of cannabis.&...more