A bipartisan bill introduced in the U.S. Senate on Tuesday would ensure legal marijuana and related businesses have access to insurance coverage.

The Clarifying Law Around Insurance of Marijuana, or CLAIM, Act is co-sponsored by Sens. Bob Menendez, D-N.J., Rand Paul, R-Ky., Jeff Merkley, D-Ore., and Kevin Cramer, R-N.D. The bill would prohibit penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business or an associated business, prohibit the termination or limitation of an insurer’s policies solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business. In addition, it would prohibit recommending, incentivizing or encouraging an insurer not to engage in the business of insurance in connection with a policyholder or downgrade or cancel the insurance offered to a cannabis or cannabis-related business. It would also prohibit the federal government from taking any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment leased to a cannabis-related business solely because the owner or operator is engaged with a cannabis or cannabis-related business and protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.

“With New Jersey just expanding their medical marijuana program, and other states across the country legalizing recreational and medical cannabis, we must ensure these businesses can fully operate just as any other legal small business would,”  Sen. Menendez said in a statement on Tuesday. “Current federal law prevents these small business owners from getting insurance coverage and without it they can’t protect their property, employees or customers. We can solve this problem with legislation that allows insurance companies to provide coverage to these enterprises without risk of federal prosecution or other unintended consequences.”

“Federal law should not prohibit access to insurance for employees of local businesses these states voted to support nor should it prohibit employers from acquiring insurance that protects their stores,” Sen. Cramer said in the statement. “This legislation takes a federalist approach by opening the insurance market to compliant businesses and preventing federal law from hindering employees’ market access.”

The senators had previously introduced the Secure and Fair Enforcement, or SAFE, Banking Act of 2019 to ensure that legal marijuana businesses can access banking services, following adoption of a similar safe harbor bill by a 45-15 vote by the House Financial Services Committee in March. 

Frank Nutter, president of the Reinsurance Association of America, praised the CLAIM Act in a statement on Wednesday.

"It is essential that businesses and individuals have basic protections that insurance provides so that they can protect their property, employees and customers,” he said.