The CannaBOP program provides uniform and detailed coverage for a range of companies involved in cannabis-touching businesses. (Photo: Shutterstock)
Businesses operating in the rapidly growing cannabis industry have a new option for insurance coverage in Nevada. Just before the end of 2019, the American Association of Insurance Services (AAIS) expanded its Cannabis Businessowners Policy (CannaBOP) into Nevada, where the program received approval in just four days following its submission to the Nevada Division of Insurance.
The CannaBOP program is currently available in only three states: California, Nevada, and Colorado. However, AAIS expects to develop similar programs for Alaska; Washington, D.C.; Illinois; Maine; Massachusetts; Michigan,; New Jersey; New York; Oregon; Vermont; Washington and other states.
The benefit for companies operating in this space is that these are standardized policies as opposed to a one-off, explained Christine Barlow, managing editor of FC&S Expert Coverage Interpretation. It takes time for new forms and programs to become established in states, especially for something like cannabis that isn’t legal the same way in every state. Barlow adds that if the program is expanded nationwide it will be the only industry-standardized policy available. Even if the policy is not used in a state, it could still be a valuable reference for carriers.
Under the Nevada CannaBOP program, both property and liability coverage are available for dispensaries, storage facilities, distributors, processors and manufacturers. “The AAIS form, as the name CannaBOP suggests, is focused primarily on retail exposures,” says Patrick McManamon, founder and chief executive officer of Cannasure Insurance Services, LLC, a wholesale broker and MGA operating exclusively in the hemp and cannabis industries. “Many of the policies written today use a mix of standard and proprietary forms that can provide coverage to a wide range of cannabis exposures such manufacturing, cultivation and lessors’ risk as well as