New bill aims to help cannabis businesses obtain insurance
The bill would establish a 'safe harbor' that would prevent federal criminal prosecution and civil liability for agents, brokers and insurers.
Rep. Nydia M. Velázquez (D-NY) and Rep. Steve Stivers (R-OH) have introduced H.R. 4074, the Clarifying Law Around Insurance Marijuana (CLAIM) Act, which would help businesses operating in the growing cannabis sector to obtain insurance products.
The CLAIM Act establishes a federal “safe harbor”, preventing federal criminal prosecution of insurers that transact with consumers and would prevent civil liability for agents, brokers and insurers that do business with the cannabis sector.
“Due to discrepancies in federal and state law, insurers are understandably reluctant to provide coverage to legitimate, cannabis-based businesses,” Velázquez said in a statement. “Without casualty, property and title insurance coverage, the growth of the industry will be impeded if not blocked entirely.”
Related: 13 P&C insurance concerns related to legal cannabis
Bipartisan support
In addition to the insurance provisions, the Velázquez measure would require a Government Accountability Office study of hurdles facing women and minority entrepreneurs interested in entering the cannabis sector.
The CLAIM Act has been referred to the House Financial Services Committee, of which Velázquez is the third most senior member. Similar legislation has been introduced in the Senate.
“Without this legislation, insurers will understandably be reticent to insure businesses operating in the cannabis sector,” added Velázquez. “This means a legal cannabis distributor whose product is ruined from a flood or fire could lose all their capital and their livelihood. This bipartisan bill corrects these problems and I’m proud to introduce it.”
Related: A change in cannabis insurance coverage is on the horizon
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