Securing insurance for your business requires moving fast and understanding industry-specific hurdles. The cannabis underwriting process is unique to the cannabis industry, and unlike many other sectors, the timeline moves incredibly quickly.
At Kapnick, we pride ourselves on being flexible yet aggressive. In many cases, carriers will quote based on specific applications rather than standard ACORD forms. Having a marketing and service team with strong connections to the underwriters—and a thorough understanding of the requirements—makes it easier to get your applications in front of the right people to obtain competitive quotes.
Whether you are a new venture or an existing operator, preparation is critical.
Navigating the Cannabis Underwriting Process for Start-Ups
To succeed in the cannabis underwriting process as a new facility, you need to begin planning well before construction finishes. The timeline for a newer, start-up company is typically structured as follows:
30 Days Prior to Breaking Ground
Before you even begin construction, it is time to evaluate your foundational risks.
- Discuss your immediate needs, paying particular attention to builders risk coverage.
- Begin the application for builders risk, directors and officers (D&O), and general liability coverage.
As Soon as Possible After the Initial Meeting
Once your primary needs are outlined, immediate action is required to protect your investment.
- Choose and place builders risk coverage for the full length of the construction project.
- Place a general liability policy, ensuring it includes any necessary Attestation J/2-D to maintain compliance with local ordinances.
Ongoing Through Construction
As your facility takes shape, you must secure the operational policies required to open your doors.
- Market all other lines of coverage, including:
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- Building
- Personal property
- Stock and inventory
- Crop
- Auto
- Umbrella
- Begin discussions on workers compensation and employment practices liability so you are fully prepared to hire employees and obtain your certificate of occupancy.
The Cannabis Underwriting Process for Established Companies
For established operators, the cannabis underwriting process requires ongoing attention to accommodate rapid growth and changing regulations. The timeline for an existing company looks more like this:
30 to 90 Days Prior to Renewal
Early preparation gives your broker the leverage needed to negotiate the best terms.
- Present Kapnick capabilities and discuss any evolving needs.
- Complete all necessary supplemental applications.
30 to 60 Days Prior to Renewal
This period focuses on the finer details of your expanding operations.
- Thoroughly complete all applications.
- Analyze and discuss coverage options and ancillary coverages, including:
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- Property (Building, Crop, Personal Property, Finished Harvested and Processed Stock, Inventory, Off-Premises Power, Equipment Breakdown)
- General Liability
- Products Liability
- Compliance with Attestation J/2-D
- Auto (Owned, Non-owned, and Delivery)
- Umbrella
- Directors and Officers (D&O)
- Employment practices liability
30 Days Prior to Renewal
With applications submitted, it is time to finalize your protection plan.
- Present all quote options.
- Go to carriers and/or wholesalers to lock in terms.
Ongoing (Minimally Every 30 Days)
The cannabis industry never stands still. Regular meetings for follow-ups are essential. These types of risks change daily, and growth often occurs monthly. Unlike many other conventional risks, we need to stay consistently on top of your expansion, acquisitions, and internal company changes. Additionally, licensing compliance needs to remain fluid and constantly monitored.
Partnering with a team that understands this fast-paced environment ensures your coverage scales seamlessly with your business. Contact Kapnick today to review your current policies and keep your operations fully protected.
