San Diego, CA (WorkersCompensation.com) – Program administrator Atlas General Insurance Services will partner with Accredited Surety and Casualty Co., to deliver workers’ compensation insurance to California cannabis companies.
Atlas announced Wednesday they would be offering the insurance to all aspects of the cannabis industry — from warehousing operations to nurseries to retail stores — that would cover workers’ compensation risks.
While only available in California, the company said it expects to expand its offering to other states that have legalized cannabis.
“Atlas has been studying the cannabis industry well before it became legalized in California,” Bill Trzos, CEO of Atlas said in a statement. “Through our research we recognized the opportunity to be proactive in entering the cannabis market and are excited to be one of a few work comp platforms in the state.”
Trzos said the company developed the program after hearing California Insurance Commissioner Dave Jones’ call for insurance products for the cannabis industry last year.
Since Jones launched an initiative to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry, several companies have come forward to provide different coverage programs including commercial insurance for the cannabis industry, a surety bond program, commercial landlords program, and a product liability and product recall program for the industry.
“Cannabis businesses should have insurance coverage available to them just like any other California business,” Jones said in a statement. “As Insurance Commissioner, my mission is insurance protection for all Californians, which includes insurance for California’s legalized cannabis businesses and its workers. This new program from Atlas is a crucial step in the right direction for this evolving industry. I encourage more insurance companies to offer cannabis business insurance products with the department to meet the needs of this emerging market.”
Atlas’ programs covers workers’ compensation for everyone from sales people to clerical office employees to florists, according to the company.
But critics say insurance policies for cannabis industry businesses can be misleading. According to MG Retailer, a magazine for the cannabis professional, policies can protect companies — as in the coverage of a handful of cannabis farmers in the Central Valley of California who were covered during recent wildfires and are slated to recoup about $8 million in losses. But, the magazine points out, many policies can find ways not to cover the industry.
“Although admitted insurance carriers tend to offer policyholders predictable terms and results, the first admitted cannabis products liability policy in California excluded coverage for injury or damage resulting from, among (many) other things, pesticides, illness, disease, and… cannabis impairment,” wrote Jason Horst for MG Retailer.
“There goes your coverage for virtually every lawsuit cannabis companies are likely to see in the next few years. Other policies include better-hidden but equally problematic language, such as one endorsement in another admitted company’s policy form that expressly eliminates coverage unless operators are in full compliance with each and every applicable state and local law, regulation, or ordinance… The problem… is complying with voluminous and ever-changing rules is difficult. Perfection in this task is practically impossible, and carriers have every incentive to scrutinize policyholders’ operations for evidence of any noncompliance.”
Chuck Holdren, Executive Director of Programs for Atlas, did not return an emailed request from WorkersCompensation.com for comment by press time.