Marijuana Insurance | Cannabis Insurance https://cannabishempinsurance.com/ Cannabis and Marijuana Insurance Quotes Fri, 24 Jun 2022 04:18:28 +0000 en-US hourly 1 https://wordpress.org/?v=6.0.1 https://i0.wp.com/www.cannabishempinsurance.com/wp-content/uploads/2018/03/cropped-Free-Pixabay-Download-Pot-Leaf.png?fit=32%2C32&ssl=1 Marijuana Insurance | Cannabis Insurance https://cannabishempinsurance.com/ 32 32 140339022 Exploding lights is a Hot issue for insurance companies covering cannabis https://www.cannabishempinsurance.com/exploding-lights-is-a-hot-issue-for-insurance-companies-covering-cannabis/ Sat, 17 Apr 2021 00:52:19 +0000 https://www.cannabishempinsurance.com/?p=5597 The post Exploding lights is a Hot issue for insurance companies covering cannabis appeared first on Marijuana Insurance | Cannabis Insurance.

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Exploding lights is a Hot issue for insurance companies covering cannabis

Nervous insurance carriers offering checklists and recommendations meant to reduce the next grow fire

Cleveland based Cannasure Insurance Services is offering an industry first check list for cultivators to help reduce the chance of exploding lights.   A checklist is unique since it offers tangible recommendations on a weekly, monthly, and yearly basis. 

Why are they doing this? 

The material from exploding grow lights will cause plastic trays used to contain cannabis plants to ignite.  The damage from these events is a nightmare for the business and insurance carriers.  The damage can lead to millions of dollars in property damage with plants destroyed, soot filled ventilations systems, unusable ballasts, and inoperable electrical systems.   Worst case scenario is the building burns down and lives are lost.    

Recommendations by Cannasure include daily awareness of buzzing sounds from ballast, lights flickering, and lights that start in a delayed manner.  Before buying lights a conversation with the manufacturer to discuss failure rates is worth the time.  A red flag warning occurs when the lighting manufacture will not disclose or discuss their failure rates.  This is an excellent information to help determine if a manufacturer is worth the risk.  

Other carriers will list their recommendations on the quote

The list includes light fittings and lams are according to the operating instructions, position lighting to avoid particles from igniting combustible material, and replacing bulbs appropriate for the ballast.  


Grow Light Catastrophic Recommendations

Insurance risk too high when certain grow light combinations cause the most problems   

According to Canopius US Insurance, a 100% led lighting system is the gold standard for reducing possible insurance  claims.  If you’re not LED, then be prepared to answer a series of questions on the type of ballasts and lighting manufacturers being utilized.   

The one question to result in a automatic declination of your insurance request is if metal halide bulbs are used in high pressure sodium ballasts. The combination of these two products is problematic because of  electrical incompatibility.  In fact, the underwriting manual warns underwriters “The Leading Cause of Fire Losses in Cultivation Facilities Comes from HID Grow Bulb/Ballast Incompatibility.”

Between check lists and recommendations Cannabis insurance carriers are more assertive in their underwriting and recommendations to reduce the chance of claims being made.  Rightfully so, they are worried.  

 

 

   

 

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National Flood Insurance Unavailable to Cannabis–What are my Options? https://www.cannabishempinsurance.com/national-flood-insurance-unavailable-to-cannabis-what-are-my-options/ Fri, 02 Apr 2021 21:07:54 +0000 https://www.cannabishempinsurance.com/?p=5559 The post National Flood Insurance Unavailable to Cannabis–What are my Options? appeared first on Marijuana Insurance | Cannabis Insurance.

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National Flood Insurance Unavailable to Cannabis–What are my Options?

If the flood wasn’t bad enough.  Collecting insurance money will be even worse.

 

The cannabis insurance industry is fraught with complexity and coverage gaps when it comes to buying insurance.  Flood insurance is another example of how difficult it is to obtain coverage. 

The National Flood Insurance Program (“NFIP”) administers the federal program to provide flood insurance covering personal and business property in the United States.  Heavy rains or over flowing rivers will destroy buildings and business property.  If you are business other than operating in the cannabis industry buying flood insurance is relatively simple.  The NFIP becomes your preferred source for flood insurance.

Flood insurance is typically purchased when a property is located in a designated flood zone.  A lender may require flood insurance as a condition of a loan.       

However, if you’re in the cannabis industry you should be aware the NFIP will not cover your building or property if insured through them.  The underwriting manual recognizes even though cannabis licensees may operate in states where it is legal it doesn’t matter.  Federal law trumps state law.    

The NFIP may not knowingly insure a building or its contents used for the manufacture or distribution of a controlled substance in violation of federal law. Doing so would directly promote, effectuate, or encourage a violation of the law, which would violate public policy and general principles of insurance.   

2020 NFIP Manual

What’s the Big Deal if I don’t disclose my marijuana business to the NFIP?

The answer isn’t good.  The NFIP will deny your claim and void the insurance policy.  Both of these are harsh consequences.  This means a cannabis building located in a flood zone could suffer a catastrophic financial loss ending their business operation. 

The bottom-line is don’t apply for flood insurance through the NFIP.        

The NFIP will not issue a policy to a person or entity that acknowledges the property to be insured is used in violation of 21 U.S.C. § 856, for example: a marijuana grower or dispensary; and the NFIP will void a policy and deny a claim where the NFIP discovers the property is likely in violation of 21 U.S.C. § 856 because it is used primarily and principally for the manufacture or distribution of a controlled substance.

2020 NFIP Claims Manual

What to do if located in a flood zone and need flood insurance?

The number of carriers offering flood insurance to cannabis companies is very limited.  But, we were able to discover one carrier with a specific cannabis flood program.  If your loan closing requires flood insurance you have an option.  The program is new and pricing seems reasonable. 

For the sake of the cannabis industry, we hope the carrier will be a reliable source into the future for flood insurance.         

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You Cannasure a 180 Change is Coming for Cannabis Insurance https://www.cannabishempinsurance.com/cannabis-insurer-cannasure-is-sold-to-one80-intermediaries/ Tue, 09 Mar 2021 16:10:26 +0000 https://www.cannabishempinsurance.com/?p=5501 The post You Cannasure a 180 Change is Coming for Cannabis Insurance appeared first on Marijuana Insurance | Cannabis Insurance.

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You Cannasure a 180 Change is Coming for Cannabis Insurance

Cannasure Insurance Services Acquired by One80 Intermediaries

Change is coming for the cannabis insurance industry. 

Cannasure Insurance Services (“Cannasure”) has evolved from a retailCannasure Logo insurance broker to a wholesale broker specializing in cannabis and hemp insurance coverages over the past 10 years.  A wholesale broker represents the insurance carrier as opposed to a retail broker representing the customer. 

Knowing Cannasure has its roots firmly planted as a retail broker they have been innovative with their product offerings.  However establishing an efficient relationship that requires quick turnaround and high volume has been a challenge.

Cannasure has now been acquired by One80 Intermediaries according to this press release and change is likely coming.

Quoting times should improve for cannabis insurance companies who need a quick response

Currently it takes 7 to 10 days plus to receive a quote from Cannasure.  The Boston based company One80 Intermediaries appears to have underwriting offices located throughout the United States including Canada. 

This presence should likely help Cannasure with reducing the amount of time it takes to quote knowing a local office is available to serve retail insurance brokers specializing in this segment.

Future of Cannabis Insurance might be through online quoting platforms

One80 Intermediaries is able to quote online a variety of business classes such as special events, liquor stores, and Truckers to name a few.   This could be what’s in store for cannabis insurance.  This would greatly reduce the amount of time it takes for retail insurance brokers to turnaround quotes and possibly eliminate lengthy supplemental and acord applications that choke the quoting system. 

Simple cannabis operations with 1 or 2 locations who need basic general liability and property coverage would be perfect candidates for online quoting.  

Expansion into workers compensation, directors and officers, and transportation lines

The cannabis industry has been void of robust product offerings.  Currently, most workers compensation insurance is through assigned risk pools.  Directors & Officers is offered by a small number of carriers, and commercial automobile is practically a monopoly held by one company.

According to the One80 Intermediaries website they appear to have a substantial experience and business practice in these areas.

This would be good for the cannabis industry to have access to more products and services.

 

One80 Intermediaries Current Product Offering

Cannabis Product Offering

 

 

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Thieves Impersonating Insurance Inspectors is a Different Kind of Risk https://www.cannabishempinsurance.com/thieves-may-be-impersonating-insurance-inspectors-is-a-different-kind-of-risk/ Thu, 19 Nov 2020 22:50:10 +0000 https://cannabishempinsurance.com/?p=5395 The post Thieves Impersonating Insurance Inspectors is a Different Kind of Risk appeared first on Marijuana Insurance | Cannabis Insurance.

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Thieves Impersonating Insurance Inspectors is a Different Kind of Risk

Colorado MEDThe Colorado Marijuana Enforcement Division has issued a bulletin where it describes individuals impersonating in a fraudulent manner an inspection of a licensed cannabis business.

Their goal is to obtain images of fire extinguishers, exit signs, alarms, and safes.

Calls or texts seem to be the choice of communication when “impersonating a marijuana industry supplier requesting to inspect the premises”

Photographing safesLOCKED SAFE

These fraudulent inspections have similarities to the physical inspection required by insurance companies when initially buying a insurance policy.

Legitimate insurance inspectors will  photograph fire extinguishers, electrical panels, existing damage, and exits signs.  Safes are not typically photographed for the insurance carrier.

Contact your insurance broker

If you’ve recently bought cannabis insurance, it would be prudent to contact your insurance broker to verify if the name and company they are representing is from the insurance company.

In addition, the following questions or requests should be made:

  • Insist they contact you via email in order to loop your insurance broker in on the communication.
  • Find out the name of insurance carrier and policy number to based their inspection.

Taking the extra steps to verify the individual with other sources could be the difference between experiencing a catastrophic loss.   

MED Fraud Alert

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Comparing Insurance Companies When Buying Theft Coverage for your Cannabis https://www.cannabishempinsurance.com/comparing-insurance-companies-when-buying-theft-coverage-for-your-cannabis/ Wed, 18 Nov 2020 11:51:44 +0000 https://cannabishempinsurance.com/?p=5266 The post Comparing Insurance Companies When Buying Theft Coverage for your Cannabis appeared first on Marijuana Insurance | Cannabis Insurance.

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Comparing Insurance Companies When Buying Theft Coverage for your Cannabis

Cannabis retailers, growers, and manufacturers have a real need to protect their product from theft. Stores in particular have a high degree of risk because they’re open to the public.  Imagine as the owner robbed during business hours submits their claim has it denied because of obscure policy requirements.

Alarming differences

Claims being claims happen everyday to retailers throughout the United States.  The reason is the words matter inside of your insurance policy.

We analyzed four different insurance carriers covering cannabis products sold through medical dispensaries and retailers and discovered some alarming differences. The results were based on the language from each carrier’s insurance policy.  Keep in mind policy terms may be subject to interpretation not only by the insurance company, but legally through a court of law.

Locked display cases serving customersRETAIL STORE CANNABIS IN DISPLAY CASE

Insurance carriers #2 and #3 from the chart below don’t make it easy for their clients to operate.  They both mandate display cases be locked during business hours.  Our initial reaction was how does a retail cannabis store serving customers lock and unlock display cases with each and every transaction?  This doesn’t seem practical or even possible.  If you’ve had a claim denied for this reason, the impossibility to comply could be a valid argument to raise with your insurance company.  We were told by one  insurance company underwriter this requirement was meant to avoid the “smash and grab” theft scenario.  If someone is willing to break through glass, I’m not sure how a locked display case would prevent this from happening.

Two out of the four insurance carriers (#1 and #4 from the chart below) recognized when a retailer is open for business their product can be displayed in cases without having to lock it.  This seems reasonable and practical based on the circumstances.

Remove product each day

Carrier #1 will reduce coverage for product not stored in a safe or vault during non-business hours by 50% or $100,000 whichever is less.  If your are insuring $100,000 of product on display, but only 50% can be stored in the safe, then $25,000 of coverage is available for the product left out each night.  The implication from the policy wording is you need to remove all of your product each day in order to have a chance of it being covered.  This would be labor intensive and non-sensical.

Volkswagen BeatleBolting a 2,000 pound safe

It’s hard to imagine thieves removing a safe that weighs 2,000 pounds.  This much weight is equivalent to a 1979 Volkswagen Beatle, baby humpback whale, or the liberty bell.  Carrier’s #3 and #4 have more stringent requirements with 800 to 2,000 pounds bolted to the ground with a one hour fire rating.  Insurance carrier #2 was the least offensive with their safe requirements.  If the safe weighs less than 750 pounds, it must be bolted to the ground.  Carrier #1 had the lightest safe requirement at 550 pounds.

 

Warnings: not following the rules

IF THESE REQUIREMENTS ARE NOT MET, THEFT COVERAGE IS HEREBY EXCLUDED FROM THIS POLICY IN ITS ENTIRETY.

Carriers number 3 and 4 warn their customers in large caps the seriousness for not complying.  This type of language could be considered a   “default mechanism” used by insurance companies as a penalty against their customer for not following the rules in order to deny a claim.    If you don’t meet the requirements, then theft coverage is excluded i.e. not covered from this policy in its entirety.  The carrier’s need to include the word HEREBY is likely meant for the policy holder to take this more seriously knowing its a legal term of art.

CheckmateGame of Chess

The cannabis retailer has a tremendous burden to overcome when buying coverage for their product and filing a claim.  The insurance carrier may be playing a game of chess in which you are the pawn.  The insurance company is anticipating their client’s lack of awareness of the terms and conditions in order to say “checkmate.”  None of the insurance companies will make life easy for you.   If you are contemplating this coverage here are a few suggestions:

  • Take the time to review the insurance language to understand the meaning and intent.  Yes, it can be boring, but ignorance may be no excuse.
  • Not sure on what something means, then ask the insurance carrier to clarify and archive their response in case of a claim
  • Engage your legal counsel for help with understanding policy terms.  The money spent will be well worth avoiding a fight with the insurance company in the future.

Remember, you are relying on the insurance company to pay claims.  Don’t make it easy for them to deny it.

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Cannasure Offering “Parametric” Insurance for Cannabis Plants Grown Outdoors https://www.cannabishempinsurance.com/cannasure-offering-parametric-insurance-for-cannabis-plants-grown-outdoors/ Fri, 13 Nov 2020 19:14:11 +0000 https://cannabishempinsurance.com/?p=5166 The post Cannasure Offering “Parametric” Insurance for Cannabis Plants Grown Outdoors appeared first on Marijuana Insurance | Cannabis Insurance.

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Cannasure Offering “Parametric” Insurance for Cannabis Plants Grown Outdoors

What does it mean and should you buy it? 

Updated:  05-12-2021

Parametric insurance is now available to cannabis and hemp companies through Cannasure Insurance Services.  The first question one should ask themselves is what is “Parametric Insurance.”  According to the National Association of Insurance Commissioners:

The term parametric insurance describes a type of insurance contract that insures a policyholder against the occurrence of a specific event by paying a set amount based on the magnitude of the event, as opposed to the magnitude of the losses in a traditional indemnity policy.

The key terms to help understand the meaning are “specific event,” “set amount,” and “magnitude of the event.”  The specific events according to  Cannasure are likely to be Hail, Drought, Excess Rain, Wildfire, Frost, Wind, Tornado, and Cyclones.  Once the threshold or “magnitude” is breached by the specific event, then the insured (“policy holder”) will have a loss or claim.  The terms and conditions will be spelled out within the insurance policy.  

Here’s an example of how a claim may be analyzed and paid to a cultivator.  A Oklahoma grower insures their crop for $1,000,000 (“set amount”).  The data indicates the location has a history of tornadoes (“specific event”).  The insurance policy determines a threshold before a payment will be made is EF-3.  If a EF-4 or EF-5 (“magnitude”) tornado which exceed an EF-3 were to destroy the crop, then the cultivator is eligible for coverage.  As you can determine from this hypothetical example, the parameters have been stated and triggered for coverage to be paid. 

Image after fire

Potential Advantages for Cannabis and Hemp Parametric Insurance

  • Coverage availability.  Particularly important to satisfy contractual obligations such as lenders and investors
  • Simplified underwriting process.
  • Payment of claims is less likely to be held up in contractual disputes.  The cannasure program indicates payments could be made in as little as three days.  This is a significance difference with traditional insurance polices as claims can take months.  
  • Because a threshold must be met, the cultivator will have an incentive to take necessary precautions to protect their plants such as sensors and warning systems.  
  • High coverage limits are available up to $100M.
  • This coverage can coincide with other traditional insurance contracts to replace certain gaps in coverage that may exist. 
  • Available for medical cannabis and hemp growers.

Potential Disadvantages for Cannabis and Hemp Parametric Insurance

  • You may experience damage and receive no payment from the insurance carrier because a parameter was not breached.  Using the example from above, a EF-3 Tornado may cause damage to your field.  This is below the contractual threshold for meeting a EF-4 and EF-5.  
  • Minimum annual premium is $15,000.  This program is likely designed for larger outdoor operations with substantial risk. 
  • Available for recreational and medical marijuana

Parametric crop insurance can help reduce risk particularly knowing certain weather events would have catastrophic consequences.  It is important for cultivators to understand their exposures meaning events that would cause damage, thresholds and finer details of the insurance policy before procuring the insurance.  

 

 

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Colorado Executive Order Allows Cannabis and Hemp Curbside Pickup https://www.cannabishempinsurance.com/colorado-executive-order-allows-cannabis-and-hemp-curbside-pickup/ Sat, 21 Mar 2020 23:26:48 +0000 https://cannabishempinsurance.com/?p=3636 The post Colorado Executive Order Allows Cannabis and Hemp Curbside Pickup appeared first on Marijuana Insurance | Cannabis Insurance.

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Colorado Executive Order Allows Cannabis and Hemp Curbside Pickup

Governor Jared Polis has signed an executive order due to the impact of the coronavirus allowing medical and recreational stores to accept online, phone, and curbside pick up.  The emergency rules are effective for the next 120 days.

Please read the rule changes in blue carefully. 

Executive Order D 2020 11

Colorado Emergency Rule Adoption Response to COVID-19

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Coronavirus Live Insurance Blog Update for Cannabis and CBD Companies https://www.cannabishempinsurance.com/coronavirus-live-blog-update-for-cannabis-and-cbd-companies/ Mon, 16 Mar 2020 18:52:08 +0000 https://cannabishempinsurance.com/?p=3391 The post Coronavirus Live Insurance Blog Update for Cannabis and CBD Companies appeared first on Marijuana Insurance | Cannabis Insurance.

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Coronavirus Live Insurance Blog Update for Cannabis and CBD Companies

Covid-19 Cannabis Insurance:  Latest News and Updates

Questions on Coronavirus:  Contact Us Here

March 16, 2020 11:49 a.m. MST 

Understanding Policy Coverages

The most frequent question we receive is whether business insurance – specifically Business Income and Extra Expense (“BI/EE”) – will provide coverage during business closure (or reduced hours) due to Coronavirus or COVID-19.  The closure or reduced hours may be voluntary or enforced by a government action.  For example, the ski resorts in Colorado are being closed by Executive Order from Governor Polis.  This is an example of a Civil Authority enforcing a law.

As of today, we know that insurance companies are having their legal teams evaluate the language within the insurance policies, to determine if coverage would be offered for a claim of this nature.

All of our carriers are consulting with their legal counsel at the moment.

Source:  Insurance Underwriter (CO) 

As such, it is important for cannabis licensees to review their policies and coverages with their Agent, to determine if Business Income and Extra Expense was purchased.  This form of income and extra expense coverage is typically triggered by a property loss (such as fire or theft to covered personal property), and may extend during the period of business interruption.

To learn more, here is an article written by attorneys on this topic, and available online:  Will Business Interruption Insurance Provide Coverage for Coronavirus Losses?   

Below are relevant sections from a proposal and standard insurance policy used in the cannabis industry.

Cannabis Insurance Declaration Page:   Do you have Business Personal Property and Business Income and Extra Expense?

Review the declaration page from your policy to determine if you have Business Income and Extra Expense with Business Personal Property as indicated in the sample below:

Business Income Extra Expense Business Property Coronavirus

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Specified Causes of Losses:  Is the Coronavirus considered an “Act of God”?

Sometimes known in the insurance industry as “triggering events,” below are events that some could consider “Acts of God”:  fire, windstorm, hail, etc.  The question is whether the Coronavirus qualifies as an “Act of God”, or if it’s specifically excluded.

Causes of Loss CoronaVirusWe searched various insurance policies for key words such as “Act of God”, “virus”, and “pandemic” and certain policies seemed to be silent on these terms. The fact that these terms are silent might be an opportunity for interpretation by the insurance carriers and their lawyers.  

However, other policies included a specific policy form entitled “Exclusion of Loss Due to Virus or Bacteria” (ISO form CP 01 40), which specifies “We will not pay for loss or damage caused by or resulting from any virus, bacterium or other micro-organism that induces or is capable of inducing physical distress, illness or disease.”  This exclusion would seem to be problematic and potentially block coverage. 

Virus Exclusion in Some Insurance PoliciesBusiness Income and Extra Expense (BI/EE):  What does it mean? 

Below are two different examples of Business Income from insurance policies.  In plain language,  BI/EE typically provides Net Income or Loss before taxes, and normal operating expenses including payroll.  Determining whether manufacturing risks are addressed, or if executive payroll must be subtracted, will require a thorough review of your insurance policy.

Example A:  The coverages do not limit payroll.

BI-EE Coronavirus

Example B:  The coverages limit payroll by removing compensation for executives, department managers:

BI EE Coronavirus Carve Out Executive Compensation

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March 16, 2020 2:24 p.m. MST

Cost of BI/EE and Buying Coverage

“Should I buy or increase my business income and extra expense coverage before I close my doors due to Coronavirus?

Buying the BI/EE does not guarantee coverage for this event.  There unfortunately is no certainty if the BI/EE will be covered until a claim is filed and reviewed.

“How much does business income and extra expense cost?”

This depends on the insurance carrier and other factors.  One example:  $500,000 of BI/EE may cost $2,500/year or .50 per $100 of coverage.

You can estimate your premium for BI/EE below:

March 16, 2020 2:49 p.m. MSTMedical Cannabis Deliveries:  Non-Owned Auto Liability

The State of Michigan will apparently allow delivery of medical cannabis to patients due to the Coronavirus.  Cannabis licensees can review their insurance policy for non-owned auto liability insurance coverage.  If the employee is using their own vehicle, this insurance might provide excess liability over the employee’s personal auto policy, and could protect the cannabis licensee with additional coverage limits.  Coverage will depend on each carrier’s specific Underwriting Guidelines.

Non-Owned Auto Liablity CoronavirusTOP

March 16, 2020 6:31 p.m. MST  –

Premium Finance Payment Relief for Victims

If you are paying insurance premiums to a premium finance company, you may be entitled to payment relief.   ClassicPlan, the premium finance company we use at Greenpoint Insurance Advisors, LLC, is offering payment options for customers.  You may call them directly at (800) 347-6482 from 8:30am – 5pm PST to discuss your loan, or email them at cs@classicplan.com.   Please reference your Company/LLC name or your Loan number, if available.

March 17, 2020 11:58 a.m. MST

Pinnacol Assurance Workers Compensation

Important information for customers and their employees seeking testing for coronavirus exposure

In light of the unprecedented nature of the coronavirus (COVID-19) pandemic, we want to ensure all our mutual customers and their employees can get tested quickly if they suspect they’ve been exposed or infected with COVID-19 as a result of their work. 

If a customer or their employees need to get tested, please advise them to go to the medical provider of their choice, and Pinnacol will pay for the COVID-19 testing.  They don’t need to go to one of their designated workers’ comp providers for the test.If a customer or their employee believes there is a work-related exposure to COVID-19, we recommend they file a claim.  Should the test results be positive, current state law regarding workplace exposure will apply in order for Pinnacol to pay for further COVID-19-related treatment and benefits.

We realize this is an uncertain time for customers and their employees.  If you have questions about COVID-19 testing or claims, please contact your Pinnacol claims representative.  Also, we encourage you and our customers to visit Pinnacol.com for additional information on preparing their business for COVID-19.

We’re updating our site regularly with Frequently Asked Questions and other essential resources.  If anything occurs in the coming days to change this guidance, we will update you as soon as possible.

Thank you.

Further Information:  Coronavirus Questions and Answers for Colorado Businesses, Letter from Pinnacol CEO

 

March 17, 2020 12:15 p.m. MST – 

**UPDATE** Regarding Business Income & Extra Expense

After discussion with Underwriting today, it appears that the carriers are taking a position that Business Income & Extra Expense would need to be triggered by a direct physical loss of, or damage to, property at the business premises, that occurs as a result of a covered cause of loss defined within the policy.  Since that situation does not seem to exist in the case of the Coronavirus business closures, it could present challenges in collecting on a claim.  Unique circumstances such as these would require submitting a claim to see how it unfolds, with decisions based on policy language interpretation and case law. 

Policy Language:  We will pay for the actual loss of Business Income
you sustain due to the necessary “suspension”
of your “operations” during the “period
of restoration”. The “suspension” must be
caused by direct physical loss of or damage to
property at premises which are described in
the Declarations and for which a Business Income
Limit of Insurance is shown in the Declarations.
The loss or damage must be caused
by or result from a Covered Cause of Loss.

March 18, 2020 11:33 a.m. MST  Washington DOI Coverage Position on Coronavirus Covered or Not

The Washington State Department of Insurance has a link for insurance producers and consumers regarding the Coronavirus.  For business customers, they have issued the following statement on Business Income and Extra Expense:

Coronavirus: Insurance information for businesses

Washington state business owners typically buy insurance coverage to protect themselves from potential losses. With the outbreak of a coronavirus (COVID-19), business owners may question if their existing insurance policy covers this type of loss.

What you need to be covered from coronavirus and other outbreaks

To be covered against any business losses due to a communicable disease, such as COVID-19, you would need to have purchased an additional endorsement to your policy. Depending on the type of business you own, your agent or broker can tailor your endorsement to your business needs. For example, if you own a small convenience store, it might cover wages for employees who are sick and can’t show up for work due to a communicable disease outbreak.

At this time you might not be able to buy this type of endorsement. After the outbreak is over and the market’s stabilized, contact your insurance agent or insurance company directly to see if they even offer it.  

NOTE: The Office of the Insurance Commissioner does not have the authority to require insurers to sell any type of coverage or policy endorsements to consumers.

Small Business Administration and disaster assistance

The U.S. Small Business Administration (www.sba.gov) is offering some Washington state counties low-interest federal disaster loans for working capital to small businesses that are suffering substantial economic injury due to coronavirus.

Small businesses that qualify are encouraged to apply online for a disaster loan (www.sba.gov). If you don’t have a computer or smartphone access, call the Small Business Administration at 800-659-2955.

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March 18, 2020, 4:01p.m. MST Commercial Automobile Insurance Carrier Payment Relief

Commercial Automobile Insurance

Our primary provider of commercial automobile insurance will provide payment relief for those suffering from the Coronavirus.  If you have commercial automobile insurance with us, please contact us for more information

March 18, 2020, 4:27p.m. MST  N.J Fast Tracks Bill to Override Policy Language

New Jersey is fast tracking Assembly Bill 3844 to have Business Income and Extra Expense recognized as a covered loss for the Coronavirus.  Does this mean other states will follow?   Language from the bill essentially overrides any exclusions for viruses:  The coverage required by this section shall indemnify the insured, subject to the limits under the policy, for any loss of business or business interruption for the duration of that declared State of Emergency. 

March 19, 2020, 12:21p.m. MST  Cannabis Insurance Carriers Restricting BI/EE

The cannabis insurance carriers are responding with restrictions for adding Business Income and Extra Expense due to Coronavirus.  Below is a recent notification received by us:

Business Income with or without Extra Expense Coverage

Effective immediately, your binding authority is restricted with respect to adding and/or increasing Business Income with or without Extra Expense limits on the following business:

  • Any existing in-force policy mid-term; or
  • Any renewal policy at the renewal inception date

This restriction is in effect until June 1, 2020, unless otherwise communicated.

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March 19, 2020, 3:48p.m. MST California Department of Insurance

A statement issued by the California Department of Insurance will consider the extraordinary circumstances resulting from the coronavirus and business interruption.

March 20, 2020, 2:39 p.m. MST Update Michigan Delivery and Non-Owned Auto Liability

Michigan will allow medical marijuana deliveries due to the coronavirus.  However, insurance carrier who offer  non-owned auto liability will not broaden their coverage to cover a claim of this nature.   This means a commercial automobile policy must be secured. 

March 27, 2020, 9:37 p.m. MST

Even non-cannabis businesses continue to be shocked no coverage for the coronavirus may be available. 

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Due to the overwhelming number of questions, we will continue to provide ongoing information for the industry as it pertains to Coronavirus and its potential impact on insurance. 

DISCLAIMER:  Please review our terms of use with the mutual understanding insurance policies are subject to interpretation at many levels.  The following is not meant for insurance or legal advice.  Please consult with your lawyer and/or insurance representative for a better understanding of your unique situation.  The approval or denial of a claim is the legal obligation of the insurance carrier.  

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Prices for Product Liability just Increased Vitamin E Acetate Removed from Coverage https://www.cannabishempinsurance.com/prices-for-product-liability-just-increased-vitamin-e-acetate-removed-from-coverage/ Fri, 27 Sep 2019 23:52:53 +0000 http://cannabishempinsurance.com/?p=3025 The post Prices for Product Liability just Increased Vitamin E Acetate Removed from Coverage appeared first on Marijuana Insurance | Cannabis Insurance.

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Prices for Product Liability just Increased Vitamin E Acetate Removed from Coverage

Cannabis Licensees will pay more for insurance due to dangerous and deadly vaping-related respiratory illnesses

 

  • Cannabis licensees will pay more for product liability insurance

  • Vitamin E Acetate is being added to a growing list of ingredients insurance companies don’t want to cover

  • Cannabis licensee removes vaporizing devices off their shelf

The latest bad news with vaporizing devices causing death and lung illness did not take the insurance industry much time to start raising their prices for product liability insurance.  

One of our insurance carriers increased the price by 15% for a cannabis manufacturing company.  The increase in premium will also mean underwriting by insurance companies is about to become even more cumbersome.

Insurance carrier removes coverage for vitamin e acetate

No insurance coverage for Vitamin E Molecule

Even more interesting, the insurance carrier has added vitamin e acetate to the list of ingredients now being excluded or not covered if a claim or lawsuit was to be filed.   This ingredient has been identified by the New York State Department of Health as being linked to those individuals experiencing illness.   

A recent product recall by Medicine Man identified vitamin e acetate as a ingredient they did not want their customers consuming.

Vitamin E Exclusion

Vitamin E Acetate Product Liability Coverage Removal

 

 

The post Prices for Product Liability just Increased Vitamin E Acetate Removed from Coverage appeared first on Marijuana Insurance | Cannabis Insurance.

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Voluntary Product Recall for Vape Pens by Colorado Cannabis Licensee https://www.cannabishempinsurance.com/voluntary-product-recall-for-vape-pens-by-colorado-cannabis-licensee/ Fri, 27 Sep 2019 17:43:52 +0000 http://cannabishempinsurance.com/?p=2998 The post Voluntary Product Recall for Vape Pens by Colorado Cannabis Licensee appeared first on Marijuana Insurance | Cannabis Insurance.

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Voluntary Product Recall for Vape Pens by Colorado Cannabis Licensee

Medicine Man Pulls Vape Products with Propylene Glycol or Vitamin E Acetate Off Shelves

 

  • Colorado based Medicine Man issues press release removing vape pens off their shelf if ingredients include propylene glycol or vitamin E acetate
  • Voluntary recalls might be a covered loss on certain product liability insurance policies.
  • Recalling a product will not typically jeopardize the indemnification provision in most product liability policies.   

In a press release, Colorado based cannabis licensee Medicine Man is removing all vape products containing the ingredients propylene glycol or vitamin E acetate.  Vitamin E acetate has been identified by the New York State Department of Health as being linked in their investigation with victims suffering health consequences. 

Product recall covered by insurance?

From a insurance and risk perspective, Medicine Man is taking the prudent step to reduce their potential liability exposure by removing product for sale, if indeed these ingredients are linked to the national health risks associated with vaping.

A “product recall” is typically defined in most product liability insurance policies.  This definition will help determine the type of recall being performed and how the policy may respond.  For example, some policies define product recall based on notification from an authorized government entity versus a voluntary recall.

Depending on the cannabis product liability insurance company, the costs covered for a recall may include notification, transportation, and disposal of product depending on the policy wording.

Does a product recall jeopardize my liability protection?

Not typically.  A product recall demonstrates being proactive and reducing liability for the licensee and insurance company.  Most reasonable insurance companies will view these actions as mitigating your risk exposure.     

If it is determined vitamin e acetate is responsible for the health problems, then cannabis licensees should begin analyzing the many risk factors such as any potential legal basis of the claim or lawsuit, types of damages, other  parties involved, and how their insurance carrier might respond based on the policy wording.

       

 

The post Voluntary Product Recall for Vape Pens by Colorado Cannabis Licensee appeared first on Marijuana Insurance | Cannabis Insurance.

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