Claims happen.  Being aware of the most frequent and severe claims can give you an advantage by allowing yourself to prepare and reduce your chances of a claim. 

Apply Risk Management Techniques to your Cannabis Company

Risk Identification: Thoroughly identify and analyze potential risks that could affect insurance operations, including underwriting risks, market risks, credit risks, operational risks, and legal/regulatory risks.

Risk Assessment: Evaluate the likelihood and potential impact of identified risks on insurance activities, considering factors such as frequency, severity, and correlation with other risks.

Risk Mitigation Strategies: Develop and implement strategies to reduce or mitigate identified risks, such as diversification of investments, risk transfer through reinsurance, hedging, and implementing robust underwriting standards.

Underwriting Discipline: Maintain strict underwriting discipline by carefully assessing risks, pricing policies accordingly, and avoiding underpricing or overexposure to certain risks.

Capital Adequacy: Ensure sufficient capital reserves to absorb unexpected losses and maintain solvency in adverse scenarios, complying with regulatory requirements and rating agency standards.

Claims Management: Efficiently manage insurance claims processes by promptly investigating claims, assessing liability, and settling claims fairly and promptly to minimize loss and maintain customer satisfaction.

Compliance and Regulation: Stay updated with relevant laws, regulations, and industry standards governing insurance operations, ensuring compliance to mitigate legal and regulatory risks.

Risk Monitoring and Reporting: Continuously monitor and evaluate risks, utilizing key risk indicators (KRIs) and risk metrics to track risk exposures and trends. Regularly report risk assessments and management activities to stakeholders.

Stress Testing and Scenario Analysis: Conduct stress tests and scenario analyses to evaluate the resilience of insurance operations to adverse events and identify potential vulnerabilities.

Continuous Improvement: Foster a culture of continuous improvement by regularly reviewing and enhancing risk management processes, incorporating lessons learned from past experiences, emerging risks, and industry best practices.

Dispensary and Stores

• Keypoint:  Robbery and thefts lead both in frequent claims and cost the most.  
• Don’t compromise on your safe.  Buy and install the highest quality and most secure safe possible.   Note:  insurance companies have specific safe requirements.
• Consider property damage to the building when criminals break in at typically at night.
• Have procedures in place if a take over were to occur.  What is a take over?  When criminals walk in with weapons demanding money and product.
• ATM Machines and Safes have been stolen.  Bolting them to the ground will help prevent their removal.
• Cash continues to be a target by criminals.  This is the reason why safes continue to be a target.
• Review your security plan frequently.  Make improvements as necessary.
• Technology driven claims occur when criminals use sophisticated software to impersonate owners or managers of a business via mobile devices.  The impersonators instruct employees to deliver cash to another impersonator.
• Trips and falls happen in parking lots due to snow/ice or parking lots not maintained.

Cultivation/Manufacturers

• Keypoint:  Grow Fires and Equipment Failure cost you the most money.  
• Grow fires, due possibly from compatibility issues with ballasts and lights has been problematic.   Manage above and beyond manufacturing requirements.  Consider alternative lighting cycle in order for lights to be on when employees are at the location.
• Consider using 100% LED lighting systems.  The insurance industry is underwriting these lighting systems by reducing premium.
• Closed loop systems have not been an issue with claims for insurance carriers.  Employees working on these systems must have not only the training, but personal protective equipment when using them.
• Copper from HVAC systems are being stolen.  These systems are destroyed when copper lines are removed.  Evalute if your roof can be easily accessed.
• Electrical, HVAC,  plumbing, and other systems such as fire suppressant systems should be properly serviced and frequently maintained in order to prevent damage and claims.