Takeaways from Our Conversation on ‘Fine Lines’ Cannabis Brokers and Operators Should Keep an Eye on

The devil is always in the details, and if you’re a cannabis business with a lot of product and cash to protect – as many dispensaries happen to be – you’ve got a lot of details to note.

Brokers specializing in cannabis have a lot of details to deal with too, on behalf of themselves and their clients, in terms of required security measures that carriers want to see implemented, warranties, and so on.

For our latest podcast, we spoke with Shauna Blackburn, cannabis team leader at Blitz Insurance, about the “fine lines” that must be read carefully not just on policy forms, but on applications for coverage.

Following are takeaways from that conversation.

Blackburn touched on how some retail brokers are getting quotes and missing some fine lines that are not always on policy forms.

“They’re not always on policy forms, so it’s really important to be paying attention to what’s on your application in many formats, in not just the cannabis industries but other industries,” Blackburn said.

She continued: “Oftentimes, there’ll be some verbiage in the application that speaks to the application being part of the policy. So basically, what you have is the application being part of that legal and binding contract. And so it’s really important that when the retailer is sitting there with the insured, that they’re going over all those fine lines and really reading through the disclosures, definitions, acknowledgements, warranties.”

Blackburn is seeing more specifics on applications, too.

This includes lighting warranties, especially for cultivators using LED lighting, detailed wording and definitions specific to cannabis crop inventories, or more details required on specific security measures, such as what sort of specific motion detectors and specific burglar alarms are being used, the type of vault on the premises, or what cages must entail.

“It’s in our application where we spell out specifically what would be a qualifiable safe or vault, but some of them will say 400 pounds, some of them will say 500 pounds, some of them will say a one-hour fire rating, a 2-hour fire rating,” she said. “You just really have to look at it and you have to be familiar with that product going in, because if you’re a retailer, that’s actually just part of your job, protecting the insured by letting them know what those look like.”

Why would this be good (or bad) for the insuring cannabis specialty?

“Well, it keeps the market where doesn’t fly out of control in regard to losses,” Blackburn said. “Look, the worst thing that could really happen as far as cannabis insurance as a whole is that they have so many losses that are not controlled, that it becomes a hard market. That’s not good for the retailers because they have to shop harder, compete in different segments that where they’re not used to doing it.”

Keeping costs under control is also good for the cannabis industry, she added.



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