WEDNESDAY, SEPTEMBER 29, 2021
With the rise of cannabis legalization comes the need for cannabis insurance coverages for some businesses. The industry is complex and continuously growing, meaning your insurance agency may be considering offering cannabis coverage. Being able to provide this coverage could set you apart from your competitors, but it can come with risks.
Areas of Risk
Every industry has areas of risk. With the cannabis industry, gaps in coverage and liability risks continue to remain an issue. The following are primary areas that companies are seeing risk in which insurance coverage can be beneficial:
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Policy exclusions—An exclusion to a policy removes coverage from the insurance. Each cannabis insurance coverage has its specialized exclusions making no two policies the same; this is where the risk comes into play. Be sure to inform your clients that if there’s a specific exclusion, your insurance company doesn’t have to defend any claims under such. This could put them at risk substantially.
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Product liability—The potential for product liability claims is high in the cannabis industry. Due to limited clinical research on cannabis, long-term health effects and the legal ability to consume it increase the risk of product liability claims. These risks are likely to persist for manufacturers, wholesalers and retailers in the future.
Learn the Industry
In the cannabis industry, knowledge is power. Consider following these tips before offering coverage:
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Educate yourself on the history and culture. How the cannabis industry came to be, when major laws were passed, who influenced the space and the large companies involved are all important to know when it comes to cannabis. Like most coverages, having more knowledge will help you better understand your clients and their unique industry needs.
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Know the laws. Cannabis laws are complex and constantly changing. It’s important to have a grasp on these laws at both a local and national level. This should expand past common knowledge to be the of most benefit to your clients.
At Sebrite Agency, Inc., we are here to guide you through becoming a cannabis insurance agent. In an ever-changing industry, it’s essential to have proper guidance. Contact us today to learn more!
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