Insurance Testing Requirements are Disconnected from What is Required and Offered in the Testing Marketplace

One Colorado Testing Facility Offers All of the Tests Required by a Cannabis Product Liability Insurance Carrier

Example Testing Question on Product Liability Application


In Colorado, there appears to be one testing facility that can offer all of these tests for Pesticides, Bacteria, Fungus, Mycotoxins, Heavy Metals, Residual Sovlents, Cannabinoid Profiles, Cannabinoid Dosage, and Terpenes.  A recent development by this particular testing facility that was a result of a survey conducted by Greenpoint Insurance Advisors, LLC.  As of June of 2017, none of the testing facilitates had the ability to test for these compounds. This would raise the question if the insurance carrier was offering product liability insurance in Colorado, how could those policies been issued when no testing facility offered all of the tests being required at that time?

The testing for these compounds is all or nothing.  If you don’t test for each compound, then no insurance will be offered by this carrier.  Essentially, the question may have greater weight and significance as opposed to other questions on their application.  

Testing of Results for Certain Compounds are for Research and Development Purposes, Only

As a result of our survey, the testing facilities common reason for not offering all of these tests was due to cost and lack of statutory requirements.   Furthermore, the one testing facility who does provide all of the tests stated the results are for research and development purposes only.  This begs the question, how would the insurance carrier use test results based on research and development to determine the outcome of a claim?  How could they deny a claim in good conscience? 

For example, a claim arises by a third party who consumed a cannabis product falling ill due to heavy metals.  In our opinion, the insurance carrier would not have a sufficient basis to deny the claim because the results were based on research and development along with statutes that fail to address this issue.  Or, this insurance carrier could be subjecting themselves to litigation.      

In our opinion, this particular cannabis product liability insurance carrier must reconsider their testing requirements or their continued offering of this product in Colorado.  They have set precedence for offering product liability insurance to the cannabis marketplace that lacked any due diligence from the testing industry and thoroughly reviewing of Colorado marijuana laws. 




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