Pubdate: Wed, 12 Jun 2013
Source: Stranger, The (Seattle, WA)
Copyright: 2013 The Stranger
Contact:  http://www.thestranger.com/
Details: http://www.mapinc.org/media/2241
Author: Ben Livingston

POT BROWNIES NEED INSURANCE, TOO

Meet the Broker Who Built the Cannabis Insurance Pool

Legal-pot sellers, like all smart business owners, will need insurance
when they open their doors. If someone slips and falls in a cannabis
store, gets sick from ganja food, or steals all the weed, the cost to
a pot business could be colossal. Not only that, anyone hoping to
lease commercial property will almost certainly be required to provide
proof of general liability insurance. And if those aren't compelling
enough reasons, draft rules issued by the Washington State Liquor
Control Board last month require every licensee to carry such coverage.

But insurance giants like GEICO and Progressive aren't exactly
clamoring to cover potential claims from pot-brownie overdoses.

Cannabis insurance is a relatively new thing. One of the pioneers is
Mike Aberle. While he was working as a broker at Statewide Insurance
in California in 2008, another insurance seller sent him a medical
marijuana dispensary unable to obtain pot-specific coverage.

"After our research, we decided there was no reason to be quiet about
[insuring dispensaries]," he says.

Now the medical marijuana dispensary insurance program that Aberle
created insures more than 2,000 pot businesses across the country,
including many in Washington State, where the program has also paid
insurance claims. "We've seen small thefts of product that we paid out
because they followed all the guidelines. There have been some we
denied because they didn't. That's why it's important to ask your
broker what the requirements are," Aberle says.

The pot insurance pool is backed by Lloyd's of London, a network of
syndicates-teams of investors who risk large sums of money in hopes of
handsome profits-that underwrite the potential insurance payouts. The
program now has 1,300 brokers around the nation who are authorized to
sell cannabis insurance. As a rough estimate, Aberle says a pot
purveyor expecting $1 million in revenue can expect an annual
insurance cost of around $900.

And last week brought another breakthrough to the cannabis insurance
industry, Aberle tells me, as Lloyd's began underwriting product
liability for cannabis retailers. Before last week, only manufacturers
could obtain liability insurance for pot food products. "The retailer
has been exposed for so long, and now they actually have coverage for
it." Now, Aberle says, "If you sell a brownie, we're there to insure
it."
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