Cannabis coverage rates leveling off: Amwins

Rates are expected to “level off” for commercial insurance coverage for the cannabis market as the sector sees some line size growth, according to a report Thursday from Amwins Group Inc.

“Overall, the cannabis property market isn’t likely to see rate decreases over the next several months. We do, however, expect rates to level off,” Amwins said in its report.

Reinsurance to back primary lines has helped some insurers increase their line sizes. “Most major cannabis programs offer at least $20 (million) to $25 million per location. A select few have secured reinsurance over time and can offer $40 million to $45 million,” the report said.

Meanwhile, claims are increasing, Amwins said. Some of these are fire-related and tied to the use of high-pressure sodium lights for growing.

“HPS lights continue to be widely used and are a major cause of fires due to the level of heat that is produced. As a result, some insurers are adding a grow light supplemental questionnaire to the application process,” the report said.