Legal cannabis companies struggling to get insurance

Aon and Berkshire Hathaway Specialty have begun providing cannabis insurance to American companies in the legal marijuana industry.

But investors and executives believe that insurers remain weary in their approach which resulted in higher premiums arguing that widely available coverage is needed.

The Financial Times has reported that US cannabis companies are struggling to secure coverage.

This is because all parts of the cannabis business requires insurance coverage from general liability to property and workers’ compensation. 

Legalising cannabis in the UK has been debated for years, in 2018 the law changed with the drug being used in some instances on medicinal grounds. 

Last year in August, Lloyd’s of London said it will allow its member firms to underwrite cannabis-related business in Canada as long as they meet international laws.

But Lloyd’s does not permit members of the market to write cannabis insurance in countries where the plant is not legal at a federal level, which therefore rules out working with US clients.

Bermuda-based broker Skyfront estimated that the legal US cannabis industry would pay about $1bn in annual premiums, if it were insured to the same level as other normal businesses.

Both Aon and Berkshire Hathaway have been contacted for comment.