Saturday, January 19, 2019

Amy Stewart Law managing principal Amy Elizabeth Stewart and of counsel Katie Glenn have published a law journal article on insurance issues faced by cannabis-related businesses in the United States.

“Budding Considerations: Cannabis-Related Insurance Issues” was published in the Insurance Coverage Journal of the American Bar Association’s Litigation Section.

The pace with which cannabis has attained varying levels of legality in several U.S. states – combined with the fact that it is still illegal under federal law – gives rise to a special set of risks facing marijuana-related businesses, on top of those faced by every business, particularly those in the agricultural and manufacturing sector, Stewart and Glenn write.

“While a handful of insurers have embraced the cannabis sector, others remain wary of the risks. Lloyd’s of London, for example, instructed its syndicates to not write the industry because marijuana is still listed as a Schedule I drug under federal law. As the insurance market answers the cannabis sector’s demand for insurance products and issues policies to cannabis-related businesses, coverage disputes are taking shape around the uncertainties in both the risks and the policies written to insure them.”

The article discusses the challenges businesses and insurers face as they seek to cover this growing industry, and offers some lessons learned from coverage litigation involving cannabis-related activities.

The authors conclude: “A candid discussion regarding the nature of the risks to be insured—and not to be insured—is necessary to ensure that the policy performs as intended.”

Although the original article is available only to ABA Litigation Section members, the full text is available here.

Amy Stewart Law assists corporate policyholders with strategic advice relating to pre-litigation claim negotiations and coverage denials, indemnity and insurance provisions in third-party contracts, insurance procurement and renewal issues, and complex and high-stakes insurance coverage and bad faith litigation. The firm was recognized for its expertise in insurance law with a Tier 1 ranking for the Dallas-Fort Worth Metropolitan Area in the 2019 Best Law Firms list published by U.S. News & World Report and The Best Lawyers in America. Contact us at inquire@amystewartlaw.com for more information.