Insurers receive green light to develop cannabis insurance
Published: September 24, 2018
The federal government will introduce the Cannabis Act into law on October 17, allowing Canadians to buy and consume recreational marijuana. Insurers are preparing their solutions for covering homes, businesses, and vehicles when legalization goes live.
Lloyd’s of London has announced its Canadian members will be able to underwrite solutions related to marijuana. Kevin Lea, president of Fuse Insurance, says insurers are finally starting to finalize their solutions:
“Some of the Lloyd’s syndicates are coming into play through the MGAs and are starting to finalize their products, so we’re expecting to see more details and more aggressive marketing offerings from some of the MGAs within the next couple of months as we move closer to legalization.”
In terms of regulation, provinces are still getting their act together, so some insurers are left waiting for regulations to fall into place:
“With Ontario going to a private model at the last second, that’s a huge change and that’s going to have a big impact on all of us who are operating in the cannabis sector. It’s a twofold impact really – it is going to substantially increase premium volume, with all the additional retail operations that need to be insured within Ontario,” said Lea.
“As that area continues to grow, and the fact that it’s right in the backyards and in the cities where a lot of Canada’s brokerages and insurance companies are headquartered, it may put more of a spotlight on the industry.”
“The coverage is comprehensive now,” explained Lea. “The challenge is that I’m not so sure the pricing is quite as low as it is yet in other similar industry sectors, like liquor stores.”