Tuesday, 18 June 2024

California's first cannabis insurer expands coverage options/lowers premiums

SACRAMENTO – Insurance Commissioner Dave Jones approved a filing from Golden Bear Insurance Co. amending its California Cannabis program product to lower rates, expand coverage options, and expand the classes of business they will cover.

"Golden Bear continues to lead the industry by being the first to offer coverage for cannabis businesses and now by expanding their coverage choices at lower prices," said Commissioner Jones. "Cannabis businesses and consumers will benefit from the new and expanding coverage options and lower rates."

Last November Insurance Commissioner Jones approved a Golden Bear filing making the company the first admitted commercial insurance carrier to file cannabis business insurance in the state. Since then, the department has approved five additional insurance companies to write cannabis-related insurance products in the California market.

"We are very excited to roll out Equipment Breakdown coverage among other new coverages to our Cannabis package policy," said Michael Brown, vice president and underwriting property manager at Golden Bear. "This additional endorsement will provide our insureds with vital coverage for losses to inventory and income caused by the failure of refrigeration equipment, HVAC equipment, and manufacturing equipment so important to the cannabis industry. This coverage enhancement provides Golden Bear insureds with even more peace of mind as they operate their businesses.

Earlier this month, the National Association of Insurance Commissioners, or NAIC, established a Cannabis Insurance Working Group to address the issue of insurance availability for the legalized cannabis industry. Recognizing Jones' leadership on the issue, the NAIC appointed the California commissioner chair of the NAIC Cannabis Insurance Working Group.

Jones has convened meetings between commercial insurance company executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.

In October of last year, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses.

The hearing revealed that while there is insurance available from surplus lines insurers, insurance gaps in coverage remain, and, until the approval announced last November, no admitted insurance carriers were offering insurance products to cannabis businesses. Jones also announced that he has directed Department staff to devote the resources necessary to timely review cannabis products and rate filings.

In May, Commissioner Jones hosted a webinar titled "Weeding through the Unique Insurance Needs of the Cannabis Industry" with the NAIC Center for Insurance Policy and Research.

In April, Jones renewed his call for insurers to offer insurance products for California's legalized cannabis industry in the wake of published reports that President Trump has overruled Attorney General Jeff Sessions' policy on federal law enforcement against state legalized cannabis.

Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California's cannabis businesses.

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