Cannabis, Property Coverage, & Proper Risk Management

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  1. Consult your insurance broker. If you’re a landlord and you want to rent to a cannabis tenant, have a conversation with your insurance carrier at least 30 days before the lease begins. There’s a good chance that they will issue a notice of cancellation (NOC). If you don’t disclose the new tenant and their high risk, when a claim is filed, it will be denied, and the non-disclosure could cost you your policy.
  2. Work with a broker/carrier that specializes in cannabis. Because the market is so volatile, you’ll want to work with someone that specializes in cannabis. This will ensure that hidden exclusions are removed, you are able to procure the best policy for your organization, and that you receive the best pricing possible.
  3. Tell your insurance story. Let the carrier get to know you by telling them your business’ “story.” Tell them what your business does well, including current risk management practices and how you’ve been able to reduce claims. This will go a long way toward potentially minimizing premium costs and exclusions and obtaining broader coverage.
  4. Get another set of eyes. Most carriers will require a lengthy application from cannabis businesses. On the application, the carrier may require the business to comply with certain requirements like hiring an armed guard. Your business will be held to the requirements stipulated in the application should you sign and submit it. Ask your broker or a reliable attorney to review the contract for anything you may have missed. Some carriers will incorporate the submitted application into the policy. Any changes between policy inception and a claim could cause coverage issues.
  1. If you are a retailer, have a plan to prevent or respond in the event of a robbery.
  2. Know how to use vaults and safes properly.
  3. Install alarms, cameras, and other safeguards. Have them tied to your phone for easy access.
  4. Depending on the nature of the business, consider installing and test fire sprinklers on site to make sure they are in working order.
  5. Consider hiring a 3rd party, properly insured, armed guard to safeguard your storefront.
  6. Institute best practices for high-risk manufacturing processes, like oil extraction.

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HUB International

HUB International is a leading North American insurance brokerage that provides employee benefits, business, and personal insurance products and services.