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Application Process for Buying Marijuana Business Insurance
Buying marijuana insurance is similar to other insurance purchases. However, the application process is not technology driven and antiquated process when compared with buying personal automobile or home insurance.
Besides the marijuana company, there are essentially three parties involved when buying cannabis business insurance:
- Cannabis Retail Insurance Broker: The broker provides assistance with carrier and coverage selection.
- Excess & Surplus Lines Broker: They are an underwriting group that represents the insurance carrier.
- Insurance Carrier: This company actually providing indemnification. These companies are typically non-admitted as opposed to admitted companies. The latter companies are regulated and licensed through the department of insurance.
The following is a step by step guide to consider when applying for cannabis business insurance:
|Step 1||Research and contact a retail insurance broker. Determine if the insurance broker has adequate access and experience in the marijuana industry. There are a limited number of insurance companies providing this type of coverage.|
|Step 2||Complete the application. Some insurance carriers have their own specific cannabis application, while other carriers might not. A professional insurance broker should be involved in this process with you. Relevant areas might include: legal name of insured, other entities, locations, available security, and coverage selection. Before signing, it’s important to read through important disclaimers.|
|Step 3||After you and the insurance broker have reviewed the application, the document is submitted to the E&S broker for underwriting. The insurance premium is based on a variety of factors including coverages, revenue or square footage, type of operations, etc… The E&S underwriter might have additional questions after the application is submitted. Depending on the insurance carrier and product selection, the turn around time can be 1-2 business days or up to 2 weeks.|
|Step 4||Review the insurance quote with the broker. Compare the coverage requested with the application you submitted to determine accuracy. The quote might include the list of forms. This is an important area to review with the insurance broker to evaluate what is covered, how it’s covered, or what is not covered.|