In the last few weeks, there has been significant movement within the California government for greater acceptance of the Cannabis Industry thanks to Insurance Commissioner Dave Jones. The Commissioner has approved the first surety bond program for the cannabis industry through Continental Heritage Insurance Company.
“Cannabis businesses should have insurance coverage available to them just like any other California business,” Jones said. “As Insurance Commissioner, my mission is insurance protection for all Californians, which includes insurance for California’s legalized cannabis businesses. I encourage more insurance companies to file cannabis business insurance products with the department to meet the needs of this emerging market.”
Within California, businesses that wish to be licensed under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) are required to provide a surety bond for most licensing categories, usually of at least $5,000. The bond ensures that companies maintain compliance with the terms of their licenses and permits and will pay for the destruction of their inventory should they not.
Up until now, businesses needed to self-insure the surety bond for their business. In October 2017, the Commissioner had met with Cannabis Industry executives to discuss the lack of available insurance opportunities for most businesses.
In November, the Commissioner approved the first commercial insurance lines for the industry. Now, by allowing the surety bond program through a specialty insurance carrier, the Commissioner has helped continue the transition of the evolving Cannabis Industry to one of greater professionalism and sophistication.
Though this is the first-of-its-kind within California, we can hope that this continues the progress to legitimacy within the insurance markets.
However, getting proper insurance coverage for your cannabis business is still challenging. For any new and emerging industry, it is important that you have the right representation when looking for the policies that are best suited for your business.
Make sure your insurance broker has knowledge of the intricacies of the cannabis industry before approaching carriers. If you have additional questions, feel free to reach out to me at 626.703.1556 or just email me at firstname.lastname@example.org.
If you have any questions on coverage, check out our Cannabis Industry page. I can help you avoid a lot of headaches and make sure you have the right coverage.
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- Understanding the Two Types of ‘Claims Made’ Product Liability Forms for Your Cannabis Business