Cannabis sector urged to look at IP, cyber coveragesPosted On: May. 31, 2019 2:45 PM CST
NEW YORK — Intellectual property insurance and cyber coverage are important to those in the cannabis industry, according to an Aon PLC official.
Coverage for such “critical risks” can be as important to a cannabis business as its property coverage, but may not be on everyone’s radar, Geoff Pope, Aon vice president, said Thursday at the Cannabis World Congress and Business Exposition in New York.
“Believe it or not, there’s a ton of intellectual property in the cannabis space,” Mr. Pope, who works on insurance programs for cannabis risks, told the audience. “We’re seeing implementation patents, process patents, trade secrets.”
Cyber is another important coverage for those in the cannabis space to consider, Mr. Pope said.
The collection of personal data from customers at dispensaries could “lead to big cyber claims,” Mr. Pope cautioned.
In the medical marijuana realm, the collection of data and information from patients will fall under the auspices of HIPAA, the Health Insurance Portability and Accountability Act of 1996.
A HIPAA data breach can be twice as costly to respond to as a non-HIPAA cyber breach, Mr. Pope said.
Those in the cannabis space should also consider directors and officers coverage, even though many companies remain private, Mr. Pope said, adding directors and officers insurance is not just for public companies.
He suggested that because directors and officers in a private company can often be more involved in the day-to-day operations and decisions in a private company, those decisions could come under scrutiny along with those making the decisions.
He added that due to the conflict between the illegal federal status of marijuana and legal state status in the U.S., cannabis companies in the U.S. cannot go public as they are able to do in Canada.