AAIS Expands Cannabis Businessowners Insurance Policy to Colorado

April 2, 2019

AAIS (the American Association of Insurance Services), the only national not-for-profit insurance advisory organization governed by its member companies, has expanded its Cannabis Businessowners Policy (CannaBOP) program with a new filing in Colorado.

CannaBOP debuted in California last year and now AAIS is bringing the program to other jurisdictions that have legalized recreational use of marijuana, beginning with the well-established Colorado cannabis industry.

AAIS first introduced its cannabis program in California at the request of the state insurance commissioner. As the largest cannabis market in the U.S., California presented an opportunity for program testing and growth, AAIS said.

“This first-of-its-kind Cannabis Businessowners Policy, or CannaBOP, program will make it easier for more insurers to enter the market and fill coverage gaps for cannabis businesses,” former California Insurance Commissioner Dave Jones said about the program.

Like most standard businessowners programs, CannaBOP provides a package policy containing both property and liability coverage for qualifying cannabis dispensaries, storage facilities, distributors, processors, manufacturers, and private cannabis testing facilities and laboratories. The CannaBOP program comes includes rules and loss costs. During development, AAIS partnered with Merlinos & Associates, Inc., the actuarial consulting group, to help analyze market exposures and develop rating guidelines specific to the cannabis industry.

AAIS is also working on several CannaBOP enhancements, including the addition of equipment breakdown, product recall, open use, special event, errors and omissions, motor truck cargo, warehouse liability, and commercial auto coverage endorsements. The program is open to additional customization and development targets at the request of AAIS member companies.

It is AAIS’s mission to deliver CannaBOP and other cannabis-specific programs to insurers in all states with established cannabis markets. As the most experienced recreational market in the U.S., Colorado was a logical next step for CannaBOP. AAIS intends to develop similar programs for Alaska, the District of Columbia, Maine, Massachusetts, Michigan, Nevada, New Jersey, New York, Oregon, Vermont, Washington, and more.

The Colorado CannaBOP program has a proposed effective date of Aug. 1, 2019.

Established in 1936, AAIS is a national nonprofit advisory organization governed by its member insurance carriers and serving the property & casualty insurance industry. AAIS delivers tailored advisory products, including policy forms, rating information and data management capabilities for commercial lines, inland marine, farm & agriculture and personal lines insurers. AAIS also serves as the administrator of openIDL, the insurance industry’s regulatory blockchain, providing unbiased governance within existing insurance regulatory frameworks.

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