Insurance Agents & Brokers

The cannabis and hemp industries and their insurers should take notice and respond now as purveyors of hemp-derived delta-9 THC seek to exploit a perceived loophole in the 2018 Farm Bill’s definition of hemp extracts – these unregulated and intoxicating products are fraught with risk.

Congress has reintroduced the long-awaited Secure and Fair Enforcement (SAFE) Banking Act and related Clarifying Law Around Insurance of Marijuana (CLAIM) Act. If passed, these bills will be a game-changer for banks and insurance companies that wish to engage with plant-touching cannabis businesses and the multitudes of ancillary service providers that support the industry. Here’s how this pending legislation may impact the existing and future cannabis insurance industry and certain types of cannabis-related risks.

Insurers should be aware of the holding by the Northern District of Illinois in one of the first decisions concerning the duty to defend insureds for COVID-19 claims under a commercial general liability policy. The opinion also has implications far beyond COVID-19 claims under such policies, and this broad interpretation may apply with respect to other claims seeking injunctive relief.

Last month, the NJ Department of Health announced it had revised the state’s medicinal marijuana program to expand its availability to more patients and extend its reach by reducing patient costs and adding more than two dozen diseases and symptoms as qualifying conditions for treatment.

The complex regulatory framework governing federal flood insurance policies centers on the National Flood Insurance Program, which pays for claims that exceed the premiums collected from the insured parties. The extensive damage caused by Hurricanes Harvey and Irma and those that follow will mean close scrutiny and careful interpretation of defenses available to insurers.

The extra-territorial reach of the EU’s new General Data Protection Regulation means that non-EU companies that collect, store, transfer or otherwise process personal data of EU residents may be required to obtain express consent to use an individual’s personal data, in addition to maintaining internal records of the company’s personal data processing activities. Moreover, companies may have a mere 72 hours to notify EU regulatory authorities of a data breach involving the personal data of EU residents.

The complex regulatory framework governing federal flood insurance policies centers on the National Flood Insurance Program, which pays for claims that exceed the premiums collected from the insured parties. The extensive damage caused by Hurricanes Harvey and Irma and those that may follow will mean close scrutiny and careful interpretation of defenses available to insurers.

A recent California Court of Appeal case confirms the limited duty of an insurance broker only to use reasonable care, diligence and judgment in procuring the insurance requested by an insured. The court rejected arguments that the duty of an insurance broker to its client should be expanded for policy reasons.

In light of a recent NY Court of Appeals decision, brokers must be aware that the safety net of the failure-to-read defense is gone and take steps to document what specific insurance is requested so that it may effectively defend against such claims in the future.

Special Risk insurance refers to certain large or hard-to-place commercial risks that are permitted to be written in New York to foster increased market flexibility. This latest  amendment, which permits large insurers to write a significant number of risks without reaching the premium cap, comes on the heels of the final adoption of the Third Amendment, which added large commercial insureds as a third risk classification and established rules for the sale of insurance to these types of insureds.