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How to deal with cannabis and ag business insurance claims

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I’m told that only one or two companies even offer it for cannabis, their requirements are steep, their coverage is very restricted, and the premiums are nuts.

As our profit margins shrink, it will be harder to justify their cost unless premiums go down dramatically.

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Definitely a good point but a few things that we see differently. While the market is certainly limited, new carriers are jumping into the space everyday improving products available, coverage, and ultimately premium.

It took a while but now there are very much industry specific policies that are intended to cover…cannabis! The tough part is usually what’s called subjectivities and the controls the insurance company would like the client to have in place to avoid a catastrophic loss. The requirements are largely based on best practices for any traditional agricultural business & insuring your facility is safe and secure for your employees, customers, and any 3rd parties that come into your facility.

For new states coming online insurance is one of the key areas of the application. This a way for the state to understand the applicant has contingency plans giving them better opportunity to scale while withstanding unforeseen “curve balls” that can arise is such a fast moving industry like cannabis.

As state laws continue to evolve around cannabis, insurance very much can become a mandatory tenement for any cannabis business. The goal for insurance companies is to provide support and help companies stay a float when they suffer a business loss. My team and I are in total agreement pricing needs to improve and there is a ways to go in terms of improving products.

At the same time we have a good basis to work off of and more options, brokerages, and opportunities arise everyday.

Hope this helps!

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I agree completely Alpha, competition will help a lot. I think insurers are rightfully hesitant to enter a market where losses are pretty easy, and the per unit price of replacement is 100 times what other crops are worth (generally speaking.)

I’d be curious to hear from some vintners on crop insurance for Cabernet vines or the like, but even then the price per ton of harvested berries rarely exceeds $300. We stand to lose 4 times that per plant for outdoor growers.

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