Chapter 11: Insurance Considerations for the Cannabis Industry
Blank Rome Insurance Recovery Partner Robert P. Jacobs authored the chapter on “Insurance Considerations for the Cannabis Industry” for Cannabis Law: A Primer on Federal and State Law Regarding Marijuana, Hemp, and CBD Paperback (ABA Book Publishing, January 2021).
In his chapter, Robert provides an overview on key risks and both basic and corresponding insurance products; comprehensive general liability; property loss and business interruption insurance; commercial crime and fidelity insurance; cyber insurance; network security; privacy, business interruption; directors & officers liability; product liability; fires, bugs, and other sources of property loss; theft; improper release of customer information; loss of share value; and judicial guidance.
Chapter Introduction Excerpt:
Insurance underwriters do not like the unknown. If they perceive there to be a risk, but they cannot quantify or assess the likelihood of the risk materializing into a loss or liability, then they may contend that it is difficult to arrive at a price for accepting that risk. But more than that, they may even contend that it is difficult to determine which type of policy properly captures the risk. This may be the case with the cannabis industry.
As a legitimate industry, it is new. Laws and regulations vary by state and, indeed, state and federal law is not in sync. The apparatus surrounding the large-scale production of cannabis products is also new, to some extent. Even more fundamentally, courts have not yet had the opportunity to provide much guidance on underlying liability issues, such as a cannabis manufacturer’s duty of care with respect to its products, much less insurance issues, such as when alleged cannabis-related bodily injury takes place or whether cannabis is considered a carcinogen with respect to certain carcinogen-related exclusions.
Regardless, for companies involved in the cannabis industry that are perplexed by the insurance landscape, this chapter provides some guidance. Specifically, this chapter provides an overview of some of basic insurance products that any cannabis-related business should consider, along with the corresponding issues that might arise with respect to such insurance products. •
About Cannabis Law: A Primer on Federal and State Law Regarding Marijuana, Hemp, and CBD
For well over a decade, the cannabis industry has grown exponentially in scope and revenue. Industry participants range from giant food and beverage companies to e-commerce platforms, dispensaries, pet food companies, and growers. These companies are developing and marketing products that involve “cannabis” in all forms and derivatives, including THC, CBD, and hemp products, as well as other emerging cannabinoid products such as CBG. And as the industry has grown and diversified, so too has its legal needs. Today, in addition to longstanding questions of federal legality and tension with state law, cannabis companies face a broad range of issues that require sophisticated legal guidance.
This book provides an overview of key issues in more than a dozen practice areas and covers the impact of cannabis law from U.S. state and federal, as well as Canadian, enforcement and regulatory agencies.
To learn more or to order a copy, please visit Cannabis Law: A Primer on Federal and State Law Regarding Marijuana, Hemp, and CBD.