Hub International’s Specialty Program Group (SPG) unit has launched a new commercial insurance product serving the cannabis and hemp industry written on Obsidian Insurance Group’s A- rated paper.
Genstar-backed hybrid program fronting carrier Obsidian is backed by a panel of unnamed reinsurers on the new program.
The product, which will be written through SPG’s SafeHerb MGA, will provide “seed to sale” coverage and in-house loss control services, with claims to be handled by Avant Specialty Claims.
SafeHerb director Kramer Hendricks said most products currently serving the cannabis and hemp sectors did not provide comprehensive coverage.
“This is the fastest growing industry in America and a once in a lifetime opportunity to get involved early,” he said. “The majority of the US population now lives in states where marijuana has been legalised.
“Thirty-six states plus Washington DC have medical marijuana laws and 15 states plus Washington DC have recreational marijuana laws.
“Those involved in these fast-growing industries must have the protection they need to meet escalating customer demands for the medical and recreational uses of these products.”
SafeHerb is under the Avant umbrella, which was bought by aggregator Hub International last year.
Coverage offered by the MGA includes general liability, product liability, property, equipment breakdown, indoor crop loss or damage and cargo.
“We have created a product that offers plant-touching businesses a full package policy including property and liability. A unique feature of our program is our ability to enhance the entire insurance experience from application to claim,” Hendricks said.
The product will be aimed at all sectors of the industry, including cultivators, processors, manufacturers, wholesalers, transporters, dispensaries, laboratories and property owners.
SafeHerb said cover will be available in all 50 states, plus Washington DC, through the company’s network of agents.
Craig Rappaport, CFO and COO of Obsidian, said: “It’s surprisingly challenging to get this kind of coverage.
“SafeHerb has shown a great understanding of the full spectrum of this industry to produce a package of coverage tailored to their needs.”
Summit, New Jersey-based SPG focuses on expanding program underwriting and specialty businesses. It was launched in 2015 by US retail broking giant Hub International and is led by former Marsh, Preferred Concepts and Mercator Risk Services executive Chris Treanor.
Previous acquisitions include Pearl River, New York-based program manager The Mechanic Group and Orlando, Florida-based managing general underwriter Insurance Programs of America, as well as retail insurance agency Risk Advisors of America.
Obsidian was launched last year and is led by former Endurance executive Bill Jewett.
As previously reported, the hybrid program fronting start-up received an A- rating from AM Best as its underwriting platform was capitalised following a $100mn investment from private equity giant Genstar.
A stated part of its strategy is to seek opportunities to partner with retail and wholesale risk aggregators such as Hub International.
Obsidian has admitted and E&S carrier platforms and will retain up to 10 percent of the risk on a program, ceding the rest to reinsurers.
Deals written so far by the start-up include Cowbell Cyber’s cyber program and a new hospitality program launched by Platinum Specialty’s WestPro last month.