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Is there a need for additional insurance?

Hey Guys,

I’m reaching out here to ask you – is there a need in the industry for additional insurance or are you more or less covered?

We are just rolling out with this Group Captive Insurance program which offers insurance on what is otherwise un-insurable. Such as crop failure or government intervention. Is there a need for this type of coverage? Can you give me some feedback?

This cost is about $115K for each $1MM of coverage annually but you are guaranteed to see 65% - 80% of that returned to you at the end of the fiscal year. So cost would be $25K - $30K for each $1MM of coverage.

I would love your help to assess whether this is valuable to you and if so, if you have any suggestion for how to spread the word?

Thank you so much,
Elizabeth Becker
(Goddess of Phun)

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I think of the Old Millers Mutual insurance. They where one of the few places that offered greenhouse insurance.

I am sure there is a need.

I think it will depend on the policy structure. Millers was nice you got a dividend check in good years andin the year of hurricane Andrew, we had higher group premiums that year but back to normal.

I guess I would also want to know who is your underwriter.

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Ethan, I can put you on the phone with the underwriter if you want. They are an international firm specializing in alternative risk financing, providing financial services, risk transfer, and capital needs to all verticals. The captive group program is just starting out so they would be happy to chat with you, answer your questions and listen to your needs.
PM me: [email protected]

Cannabis Group Captive Draft Marketing _Elizabeth Becker.pdf (1.0 MB)

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Can anyone give me an idea of how often one looses a crop? How real is the threat?

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In my experience, total crop failure is rare and an experienced grower can spot symptoms before the symptoms decimate a complete crop. I think we also need to ask what total crop failure looks like based on stage of life of the plant: you will definitely experience a higher mortality rate at the propagation stage than you will at week 4 of flower, for instance. We would say 5%10% mortality in propagation, while not ideal, does not denote crop failure…if your grower was to lose 5% - 10% of a crop in week 4 of flower, that grower would also probably lose his or her job!

The most common causes of total crop failure usually boil down to unsanitary facility, poor IPM protocols, and environmental condition swings in cultivation spaces. While you can harvest a crop webbed over with spider mites or dusted with powdery mildew, it does not mean that crop was a success…

Hope this helps!

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Thank you so much. That helps a ton. I just got off the phone with Ethan and he was chatting with me about how to market insurance to cannabis growers. I realize you are a rare bunch. :slight_smile: If you have any guidance on that as well, I’d really appreciate it.

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We growers are sometimes a hard lot to find. We tend to get lost in the weeds :wink:

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I really appreciate all the people who have reached out to help educate me of the needs of the industry. I’ve realized that the group captive can also be used to pay for a deductible for your primary insurance - if there is a claim. This is how it would work:

  1. Your premiums for primary insurance go way down based on a deductible of something like $100,000.

  2. You can purchase $100,000 coverage to use for the deductible via the group captive for a cost of $11,000.

  3. If the savings on primary insurance is minimum $11,000, you’re golden because if there are no claims, you get approx $7,500 of your $11,000 returned to you at end of the fiscal year.

Sweet, huh? Anyone else reading, if you have any ideas or questions or thoughts, or even just some time to help me see through your eyes, PM me. :slight_smile: We would need a bunch of people to get on board with this in order to move it forward.

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