"I consider myself an expert in regard to cannabis business operations and understanding all the business tiers—growing, laboratories and dispensaries," says independent agent Tyler Cline. "Pairing that with my years of experience in the insurance industry, I knew this was the market for me."
Cannabis Insurance Business
How did you get started at your agency?
I started selling insurance at Allstate right out of college and then went on to work for an independent brokerage. I expanded into other lines of insurance, including roofing and construction trades; CBD, hemp and cannabis risks; recreational and medical marijuana; vitamins supplements and nutraceuticals; pharma and medical practices. It is a challenge as the industry is constantly changing. I am constantly learning, which keeps me interested.
Why cannabis insurance?
Growing up in Colorado, cannabis was a huge part of my culture and my family. My dad was one of the original medical cannabis cultivators, so I was in a truly cannabis-friendly environment. I consider myself an expert in regard to cannabis business operations and understanding all the business tiers—growing, laboratories and dispensaries. Pairing that with my years of experience in the insurance industry, I knew this was the market for me.
Challenges in the cannabis insurance market?
Getting carriers to come around on the long lists of exclusions with the non-admitted markets. Currently, I see difficulties coming with wind and hail and roof coverage in many area zip codes, as well as wildfire sublimits being imposed more than ever before.
Additionally, health hazard exclusions and impairment exclusions have been applied with carriers that offer coverage yet still exclude health losses and losses due to impairment. This is the biggest issue. Many agents and insureds are overlooking this and getting questionable policy forms shopping on price because the application is tailored to the cannabis program. I don't see health hazard exclusions holding up in court while the carriers have the agents and insureds under the impression they are obtaining products liability for CBD, hemp or cannabis based products. It's a juxtaposition that needs to be fixed and addressed. Unfortunately, the majority of carriers will approve the product list and labeling yet still exclude health hazards and impairment.
More states will continue to fight against synthetic converted cannabinoids. This existed in the first instance as a loophole in the Farm Bill and I believe, over time, cannabinoids such as Delta 8 THC will not be classified as real THC (lab synthesized) and separate from the rec and med markets (plant extracted). This will mean that consumer safety will be taken into account with oversight from the state.
Advice for a fellow agent in the cannabis insurance market?
First and foremost, know the cannabis industry. Knowing insurance practices alone will not give you the tools or resources in understanding all the nuances and equipment types that go with writing cannabis risks. By writing in an industry you don't know well, you leave yourself open for errors & omissions claims as well as coverage gaps for the insureds.
Favorite cannabis insurance success story?
Helping a client remain in business after suffering a loss of inventory worth millions of dollars. We stretched our necks out for the client legally and saw it come to a successful resolution, allowing the company to remain in business. This is my favorite success story because it showed that cannabis insurance business exists for the right reason: to protect the insureds and the industry of cannabis!
Olivia Overman is IA content editor.