If Cannabis Dies, How Expensive Could The Claim Get?

 Wednesday, October 9, 2019

 Canadian Underwriter

If a hydroponics system fails and it’s tomatoes or peppers that are spoiled, that’s one thing. But what happens if it’s a legal cannabis facility?

“The impact of cannabis on the [property and casualty] industry remains to be seen. We haven’t had too many claims yet but we probably will and they will probably be quite severe,” Dana McMillan, a claims adjuster with The Boiler Inspection and Insurance Company of Canada, said during the recent Annual Engineering Insurance Conference.

“If little things go wrong it has a huge impact in a hydroponics environment,” said Mike Storey, director of underwriting at BII, a subsidiary of Munich Re’s Hartford Steam Boiler unit.

During the AEIC presentation — Underwriting Legal Cannabis Production — speakers from BII gave examples of claims not involving cannabis but arising from equipment failures at plant-growing facilities.

The point was to illustrate the impact an equipment breakdown at a hydroponics operation can have on a business.
Excess & Surplus Lines