Change in Tone by Department of Justice Cited as Reason for Insurance Carrier’s Departure
Markel Corp., through one of its affiliated companies Evanston Insurance Company, has decided to no longer offer medical cannabis insurance to the marketplace. According to Markel Corp’s February 2017 Product Listing, they are the 5th largest Excess & Surplus Lines insurer and ranked 476 on Fortune 500 company.
According to our sources, the insurance carrier cited the recent change in position by Attorney General Jeff Sessions as their reason for the departure. The Attorney General most recently changed the direction of the Department of Justice to allow US Attorneys to decide if federal enforcement of cannabis laws will be in their best interest.
Evanston Insurance Company had been a primary insurance market for the placement of medical marijuana operations. They were never a player or market for recreational cannabis. But, their ability to offer commercial and product liability with substantial limits through an umbrella policy was a significant coverage offering. Their departure will leave a gap for certain types of customers and require licensees to carefully evaluate their insurance and risk needs.
Opportunity for other insurance carriers to step in
The news by the Attorney General may cause other insurance carriers to hit the pause button just as California begins a massive undertaking to create a regulated marketplace. Other insurance carriers might see this as an opportunity to capture market share and expand their coverage lines particularly for those companies who have been operating in this segment for several years.
If you’re currently insured with Markel Corp/Evanston Insurance Company, the carrier will continue your coverage until the policy renews. Furthermore, existing quotes will be honored for the next 30 days. Insured’s are encouraged to contact their insurance broker for further information.