Cannabusiness Insurance Tip: Get a Retroactive Provision Included

If a cannabis company is looking at switching insurance carriers, it’s important to read the fine print.

That was one of the lessons Patrick McManamon, of Cannasure Insurance Services, imparted to the audience at the 3rd Annual Marijuana Business Conference & Expo in Las Vegas on Wednesday. (Note: The Conference is produced by Marijuana Business Media, which also publishes this Daily.)

According to McManamon, one serious problem for marijuana producers around the country can be if they switch insurance carriers and their new insurance policy doesn’t have a retroactive provision that predates the new policy.

In other words, a cannabis company’s insurance should date back as far as possible, to make sure they’re insured against liability lawsuits. In a worst-case scenario, a company could change carriers, not have a retroactive provision in their new policy, then get sued for a problem that took place before the carrier switch. In that case, the company has zero relevant insurance coverage.

“Talk to your insurance agent. If he doesn’t understand that, get a new insurance agent,” McManamon said.

Some insurance resources for cannabis companies, according to McManamon:

  • www.ambest.com
  • www.demotech.com
  • www.fitchratings.com

 

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