May 8, 2012

Dangerous Precedent: Insurance Firm Denies Malpractice Coverage for Lawyer With MMJ Clients

Medical marijuana ban on pot dispensaries and pot growers, dispensary raids

Pay particularly close attention to the recent experience of Denver attorney Ann Toney, whose insurance company essentially decided to yank her malpractice coverage. Why? Because some of her clients are involved in the medical marijuana industry.

The move by Hanover Insurance Group is extremely worrisome for ancillary MMJ companies.

Scores of banks have already stopped doing business with dispensaries and growers, as have many landlords in some cities. The fear is that a similar mentality could spread to businesses that are tied to the medical cannabis industry in some fashion but do not deal directly with the plant – such as law firms, accountants and insurance providers.

That’s exactly what happened with Toney. According to the Denver Post, Hanover Insurance Group told the attorney that it would not renew her liability coverage, saying that it cannot extend such insurance to practices that represent medical marijuana companies.

It’s particularly interesting to note that Toney has had medical marijuana clients for several years, yet the insurance company has just decided to take issue with it now.

If more insurance companies follow suit, the entire MMJ industry could find itself facing another crisis, as many law firms would no doubt sever ties with medical marijuana businesses. The other worry is that costs could rise for these services because firms would see MMJ as a greater risk and would therefore charge more.

But Brian Vicente, a medical marijuana lawyer in Denver, said he’s not sure insurance companies can justify this stance.

“I’m concerned that this could spread, as insurance carriers can be very risk averse at times,” Vicente said. “However, there are many (lawyers) out there who represent the mob and child molesters, and the fact that (an insurance company) would say that’s OK and medical marijuana isn’t doesn’t make sense.”


2 Comments:

  1. this is nothing more than strong arm tactics being sanctioned by the unprecedented raids on the medical cannabis industy. If we sit back and dont stand up together we will be forced back to drug cartels, and back alley deals.

  2. We were just notified today that our medical malpractice coverage for our physicians will be cancelled if we are recommending medical marijuana to patients. This can and will have a very serious impact on physicians supportive of medicinal use as most will not be willing to risk such exposure.

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