The state’s growing cannabis industry has been greenlighted for its first packaged insurance policy, according to the California Department of Insurance.
Insurance Commissioner Dave Jones has approved the Cannabis Business Owners Policy, known as CannaBOP, a policy containing both property and liability coverage.
The announcement follows an initiative Jones launched last year encouraging commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry, according to the department.
“Cannabis businesses need insurance coverage to help them recover when something goes wrong, just as any other legalized business does,” Jones said. “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.”
CannaBOP is available to qualifying cannabis dispensaries, storage facilities, distributors, processors, manufacturers, and other businesses participating in or supporting the California cannabis industry, according to the Insurance Department.
The new program sounds promising to Santa Rosa-based CannaCraft, the state’s largest cannabis manufacturer.
“The CannaBOP program will certainly inch us closer to normalization in terms of what is available,” said Tiffany Devitt, CannaCraft’s chief compliance and information officer. “The difference between the program we’re currently operating under and CannaBOP is we have had to piece that coverage together with different carriers — all of whom have different appetites for different types of risk.”
CannaCraft has had property, product and general liability insurance for some time, she said.
The American Association of Insurance Services developed the California-specific business-owners policy program for the cannabis industry, including forms, rules, and rating information, according to the Insurance Department. AAIS filed the California CannaBOP program with department on April 20.
The program is available to AAIS member insurance companies, which must first submit a separate rate filing to adopt the program. Those filings are subject to the minimum 47-day waiting period, according to AAIS, an Illinois-based national not-for-profit insurance advisory group.
“We’re certainly pleased to be seeing insurance normalizing for our industry,” Devitt said. “Hopefully, we’ll see more flexibility and better rates in the near future.”
Read more about the North Coast cannabis industry: nbbj.news/cannabis