California Commissioner encourages insurers to sell cannabis industry insurance

Cannabis Industry Insurance - Cannibas Scale - legal system

Dave Jones is once again urging insurance companies to sell products to the legalized cannabis ecosystem.

California Insurance Commissioner Dave Jones has previously urged insurers to sell legalized cannabis industry insurance products. He is now renewing this call on the heels of recent reports that President Donald Trump has ignored federal law enforcement policies put in place by Attorney General Jeff Sessions.

The Commissioner has been trying to encourage insurance company involvement since November 2016.

At that time, Californian voters chose to make adult recreational cannabis use legal. Since that time, Commissioner Jones has been asking insurers to look into selling cannabis industry insurance. The commissioner is seeking to boost the number of insurance products available for covering that industry’s needs.

At the moment, there are over 24 surplus lines insurers as well as Golden Bear Insurance offering coverage for the different types of peril faced by legal Californian cannabis businesses. These figures are from the California Department of Insurance (CDI).

There remain gaps in the available coverage in cannabis industry insurance, says the department.

As a result, Commissioner Jones issued a former letter to Californian insurance companies. The purpose of the letter was to urge them to have a closer look at the cannabis insurance gaps and fill them.

“The mission of the California Department of Insurance is ‘Insurance Protection for All Californians.’ We work with the insurance industry to promote a healthy insurance market that offers insurance products to meet the ever-changing needs of Californians and California businesses,” said Jones in his letter to the insurance companies in California.

He went on to point out that it includes ensuring that the California licensed legal cannabis businesses in the state have access to the coverage they need.

Commissioner Jones explained that the CDI will expeditiously process cannabis rate filings. Moreover, it will not make any objections to proposed cannabis industry insurance rates that are adequately justified. Provided that the rates have a rational basis, insurance companies can expect to have their proposals approved by the CDI. It is too early to know which insurers will be responding to the commissioner’s latest call for new coverage products.

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