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Excess and surplus lines Mesa Underwriters Specialty Insurance Company (MUSIC) has decided to no longer insure cannabis companies. Existing customers will likely begin receiving non-renewal notices instructing them when their insurance will terminate. Those customers impacted will need to begin seeking new cannabis business insurance.
MUSIC began covering cannabis operations in Colorado and other states several years ago. They primarily offered premise liability and property coverages to cannabis licensees. MUSIC did not offer coverage for other lines of insurance such as product liability, crop insurance, or directors & officers insurance making the transition for existing customers less cumbersome.
The cannabis industry has continued to make progress and experience set backs after Lloyds of London decided to stop insuring cannabis operators a little over 1 year ago. New insurance carriers have entered the cannabis industry to fill in this gap particularly in the area of premise liability and property coverage.
The cannabis industry does not have a large number of insurance carriers available or competition for their business unlike other industries. The limited number of carriers might be due to federal issues, risk of reputation, or simply insuring an industry with little history operating in a regulated market.
Fortunately, we’ve heard another underwriting group is likely to begin offering a comprehensive cannabis insurance program they announced at the recent Cannabis Business Summit in Oakland.
No definitive reason was given for MUSIC’s departure in the notification we received. For those who might be impacted, we suggest contacting your current insurance broker to discuss your options.