Hub International’s launch of comprehensive cannabis insurance for businesses couldn’t come at a better time, with the legalization date of recreational marijuana in Canada fast approaching on October 17. The team, led by TJ Frost in the US and Phaedra Andrusiak in Canada, has been developing its expertise in cannabis for years now, and was finally able to announce the release of the proprietary offering for medical and recreational cannabis organizations with the backing of well-developed knowledge about the industry.
HUB’s expertise watching the US cannabis industry grow will come in handy as it starts offering coverage for Canada as well, according to Frost.
“I think Canada is in a really good position right now. Watching the US grow and make their mistakes – and we’re doing it on a state-by-state basis and each state has different laws – and then Canada is as a country legalizing it, it’s really incredible,” said Frost, US cannabis segment leader for HUB, adding that there will be ongoing developments in the coming months as the cannabis framework in each province unfurls.
“To see Ontario, that’s going to be controlling the recreational sales for retailers, and then watching the other provinces probably follow in those footsteps too will be interesting.”
Even if the laws vary from region to region, the risks for the industry are nonetheless similar, which makes that industry knowledge transferable.
“The risks for losses are going to be the same when it comes to a client, so that’s transportation of cargo losses, theft, fire, crop, product liability,” explained Frost. “Producers and carriers can learn a lot about what the US is facing.”
The time that HUB spent building up know-how in commercial cannabis also reveals a valuable lesson for brokers in Canada who are eager to take part in the emerging market.
“We’ve taken a number of years to get to where we are now, to finally announce that we’re ready to publicly say that we insure it,” Frost told Insurance Business. “Any broker that comes into the field, and wants to insure the industry, they need to be familiar with all the laws, the regulations, and be experts in the field. As we all know, this is a new, emerging industry so if you just do it with a toe in the water, and not jumping in and learning the ins and outs of the industry, you can fail - and then we’re putting all of our clients at a financial risk.”
Cannabis businesses themselves often need help understanding their insurance needs, which is why an educated broker is key to prevent underinsurance among their cannabis clients. There’s still a misconception among many cannabis businesses that they can’t get insurance from brokers or carriers.
“The main thing for a cannabis business is there’s a misconception that they can’t get insurance,” said Frost. “That’s why we wanted to publicly state that we will be a participating player in the cannabis industry. We’re obviously able to offer insurance in Canada and the US, and we’re prepared to get swamped.”