Outdoor Cannabis and CBD Crop Insurance Becomes Available

Insurance Company Offering Protection for Outdoor Plants

In the history of cannabis insurance there has never been a insurance company willing to offer coverage for cannabis plants growing outside.  Think about it, the chances of something going wrong due to weather or criminals seeking an easy target had scared off most insurance companies.  Indoor crop insurance has been available from approximately two companies knowing those plants are protected by four walls, video, alarms, and gated windows. 

However, the thought of offering outdoor crop insurance was unheard of until now. 

The insurance industry is conservative my nature.  The availability of outdoor crop insurance is considered a giant leap forward for both the cannabis and insurance industry.  There are many variables analyzed by actuaries attempting to quantify if a program of this nature will be viable long term.   Those variables include understanding the numerous hail storms that occur in Colorado.  That California is subjected to many wild fires.  Washington State can experience flooding and wind damage.  Knowing an insurance company analyzed these types of risk was the last frontier in cannabis insurance to be conquered. 

SecurityOf course, there are coverage limitations meaning how much the insurance carrier is willing to cover along with underwriting requirements particularly focused on the security of those living plants, water availability to combat a fire, and brush clearance surrounding the property.   These are reasonable expectations every outdoor cannabis farmer should be incorporating even if insurance wasn’t involved.

The coverage limits offered by the insurance company are more generous on cannabis (THC) as opposed to Hemp (CBD).  The reason seems to point toward the lack of regulations within CBD industry.  The types of covered losses such as fire, theft, and hail should be carefully reviewed along with specific exclusions with a licensed insurance broker specializing in the industry.  

How will the insurance carrier determine the value of my outdoor plants?

The application has a designated area to determine values based on the stage of the plant.  These stages such as seedlings, vegetative, flowering, and harvested can be insured in “layers” of coverage amounts. 

For example,  the number of flowering plants multiplied by the wholesale value will equal total plant value.  If a cannabis grower had 1,000 flowering plants valued at wholesale at $500 per plant, then the insurance coverage amount would be $500,000.  The value of seedlings is less than the value of harvested plant material. 

Knowing the wholesale value of those plants will fluctuate, it will be important for the cannabis grower to be certain their limits will sufficiently protect them from a loss. 

Need a quote for your outdoor crop insurance?

Outdoor crop insurance is now available! For more information, please complete this online inquiry if you have interest in obtaining further information. 

Disclaimer:  We are not licensed in all states.  Please visit our terms of use page. The images do not represent a covered cause of loss. 

Number of Insurance Carriers Decrease by Product Type

Cannabis Insurance Carrier Graph by Product Type

Limited Number of Cannabis Insurance Companies

If you’re wondering if there’s a lot of insurance companies serving the cannabis industry this graph may help give you a different perspective. 

The number of insurance carriers providing the primary coverages such as general liability and business property are more readily available throughout the United States.  The reason is the risks appear more predictable to the insurance industry.  As you move on the graph from left to right, the number of carriers offering a particular type of cannabis insurance will decrease dramatically. 

Less options means inability to comparison shop your insurance

Cannabis Insurance Proposal Banner

For example, the Directors & Officers, Commercial Auto, and Workers Compensation may be 2 or 3 companies serving each product segment.  The less number of carriers offering coverage is indicator the risks are not as predictable.  The limited supply of insurance companies doesn’t mean the pricing will be inflated.  It will mean the insurance buyer will not have the ability to comparison shop.

If you’re a cannabis or hemp/cbd licensee it will be important as your shop for insurance to keep this in mind as you’re contemplating your insurance needs.

New Insurance Products for the Cannabis Industry

Latest Update:  Existing Insurance Carrier Expanding their Product Lines

A recent product flyer from one of our established insurance carriers expanding their product offering to the cannabis industry despite the fact other insurance carriers are leaving. 

Coverage highlights include:

  • Living Plant or Crop Insurance: Insurance protection for your living plants from theft or fire.
  • High Limits for Cannabis Stock:  Need to protect your final product with high limits.
  • Equipment Breakdown:  The protection of valuable equipment due to a covered loss
  • Excess Liability up to $10,000,000:  Important for cannabis companies with multiple locations and numerous landlords requiring certificates of insurance.
  • Trade Show and Events Coverage:  Removes the premise only liability endorsement and provides coverage when you’re at the trade show.
  • Product Liability:  Adds coverage for your product being sold into the stream of commerce
  • Professional Liability:  Concern with providing advice to others that may be erroneous or negligent.
  • Hired and Non-Owned Auto Liability:  Insurance protection from when your employees are driving their own vehicles for company business.  Example would be those employees visiting customer who end up in a accident.  How is your business protected from the lawsuit by the third party? 

Insurance Carrier Product Update Sheet

List of Insurance Products for Marijuana Companies

New Cannabis Crop Insurance Program Now Offered by Existing Carrier

Great Opportunity to Secure Crop Insurance for your Cannabis Company

One of our existing cannabis insurance carriers has expanded their product line and started offering coverage protection for your living plants also known as crop insurance.  The coverage is being made available to Indoor grow only (warehouses, fully enclosed poly carbonate, or similar greenhouses).   Further good news is this insurance carrier has been stable and involved in the cannabis industry for several years.

Image of a marijuana plabnt

The Cannabis Plant

The definition of living plants means the following:

“Living Plant Material” means marijuana seeds, immature marijuana seedlings, marijuana plants in the vegetative growth stage and mature flowering marijuana plants rooted in growing medium.

Examples of the types of losses covered include Fire, Lightning, Explosion, Windstorm/Hail, and Vandalism.  Theft is also included, subject to all warranties attached to this policy. 

Currently, there are very few cannabis insurance companies offering crop insurance.  As such, Greenpoint Insurance Advisors, LLC is pleased to be able to offer this program.    If you’re are interested in a quote, please contact our agency below to discuss your particular circumstance: