Look to broker experts to place marijuana coverage
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The insurance market serving the cannabis industry is still largely developing, and those seeking to secure coverage should enlist an experienced helping hand, industry sources say.
“With any class of business, there will always be difficulties in securing coverage,” said Kyle Burnett, regional vice president of property and head of excess and surplus property for XL Group Ltd. in New York. “But cannabis is particularly hard. There’s limited capacity in the marketplace right now. Of the few willing to offer the product, each one is different.
Some only write in the primary, some in the excess. Each one of the MGAs willing to look at the class puts its own exclusions on the policy.”
Patching together appropriate coverage will require expertise in a space still largely nascent, observers say.
“It’s still a fragmented market,” said Ian A. Stewart, a partner with Wilson Elser Moskowitz Edelman & Dicker L.L.P. in Los Angeles. “Brokers that have to navigate the cannabis space really do need to be educated.”
“You have to have an expert,” said TJ Frost, U.S. cannabis segment leader for Hub International Ltd. in Bothell, Washington. “You have to have a broker that knows the ins and out of the industry.”
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