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Stockton, California-based Golden Bear Insurance Co. will become the first admitted market to write marijuana coverage in the state, with its first property/casualty policies expected to be bound next week.
Marijuana becomes decriminalized in California for both medical and recreational purposes on Jan. 1.
Galen Hayes, president of El Sobrante, California-based Hayes Insurance Agency, who said his firm will be the exclusive broker, said Golden Bear will initially write general liability coverage, including professional and products liability; and property coverage, including coverage for buildings, contents and tenant improvements. Coverage will be available for both landlords and tenants, he said.
Liability limits of $5 million and up will be available, while property limits will depend upon the building’s value, he said. Mr. Hayes said he believes reinsurance is still being finalized.
Mr. Hayes said because California and the state’s insurance department have not yet issued regulations, many details have not yet been determined. “We’ll know more in a couple of weeks when the state gives us more rules,” he said.
The Hayes brokerage, which has been active in the excess and surplus lines market for marijuana since 1996, offers coverage in 29 states.
Golden Bear will write only in California, at least for now, Mr. Hayes said. The insurer referred all questions on the program to the Hayes brokerage.
Many insurers have been reluctant to write marijuana on an admitted basis because it is still classified as a Schedule 1 drug by the U.S. Food and Drug Administration. However, California Insurance Commissioner Dave Jones has been encouraging admitted insurers to write the coverage.