Cannabis businesses operating under state laws that have legalized recreational or medical marijuana are often denied access to the insurance market because insurance providers could be prosecuted or face penalties under federal law. Without access to insurance products such as property, casualty and title insurance, businesses remain vulnerable, and employees, customers, and the community face safety risks. Businesses can also be denied bank financing if they do not have the proper insurance.
The CLAIM Act would:
- Prohibit penalizing or discouraging an insurer from providing coverage to a state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
- Prohibit the termination or limitation of an insurer’s policies solely because the insurer has engaged in the business of insurance in connection with a cannabis-related business;
- Prohibit recommending, incentivizing, or encouraging an insurer not to engage in the business of insurance in connection with a policyholder, or downgrade or cancel the insurance offered to a cannabis or cannabis-related business;
- Prohibit the federal government from taking any adverse or corrective supervisory action on a policy to an owner or operator of a cannabis-related business or real estate or equipment that is leased to a cannabis-related business, solely because the owner or operator is engaged with a cannabis or cannabis-related business; and
- Protect employees of an insurer from any liability solely for engaging in the business of insurance with a cannabis or cannabis-related business.