California Approves New Product Liability Program for Cannabis Industry

May 16, 2018

California Insurance Commissioner Dave Jones announced on Wednesday he has approved a new product liability and product recall program for the cannabis industry in California.

This new cannabis insurance policy, offered by Continental Heritage Insurance Co., provides product liability and product recall coverage against claims arising from commercial cannabis activity for licensed businesses in California.

The program offers coverage to businesses with the following license types: Cultivator, Manufacturer, Distributor, Retail and Medical. Laboratory testing licenses are not eligible for this program.

The core component of this insurance program is the applicant’s ability to conduct licensed activities in compliance with California laws and regulations and to produce and sell consistently safe products. The commercial cannabis business is an evolving industry and Continental Heritage will monitor changes, collect data and make appropriate changes as necessary.

Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. The first filing and approval of commercial insurance for the cannabis industry was announced in November 2017, the first surety bond program for the industry, also for Continental Heritage, was announced in February, and the first coverage for commercial landlords for the industry was announced earlier this month.

“Whenever anyone shops in, works in, sells products to, or invests in a cannabis business, I want there to be insurance coverage available,” Jones said in a statement. “Continental Heritage Insurance Company’s insurance product is another example of the success we are having in getting more insurance coverage for the cannabis industry. I encourage more insurance companies to follow Continental Heritage’s lead and file insurance programs to fill the gaps in coverage for the cannabis industry.”

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