While mainstream insurance carriers such as State Farm Insurance, George Petersen Insurance Agency, and Wells Fargo Insurance Services have yet to touch the cannabis industry, other smaller and independent insurers are willing to take on cannabis clients, according to a North Bay Business Journal report.
John Ford, proprietor of the Eureka, California-based John Ford Insurance Agency, began serving the industry two years ago and since then, his business has grown 62 percent. He estimates that 80 percent of his 130 clients are canna-businesses, including cultivators, distributors, and dispensaries.
“Mainstream carriers are looking in from the outside, but salivating as well,” Ford said in the report.
Ford previously worked with Lloyd’s of London to underwrite the industry; however, they stopped insuring cannabis firms in 2015 over the conflict in state and federal laws. He is now working with specialty insurers Hannover RE and Knight Specialty Insurance.
According to Nick DiNicola, owner of San Francisco’s Nick DiNicola Insurance Services, it’s important that canna-business operators be honest about their business because if they need to make a claim and are insured as, say, a nutrition shop, their claim would probably be denied. When DiNicola first started issuing insurance to the cannabis industry 10 years ago, many of his clients asked him to sign a non-disclosure agreement, but as the legal industry has expanded people have become “much more open” about what it is they do, exactly.
DiNicola explained that while insuring the industry is a risk, it’s not as expensive as most operators assume.
“The biggest challenge for the cannabis industry is there are not enough players out there,” he said; and as more carriers get on board the rates will become more competitive.
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