Does my insurance carrier cover a pot shop design exposure?

photo-1464869372688-a93d806be852Does my insurance carrier cover a pot shop design exposure?  With Colorado and Oregon passing the law to allow for recreational pot shops this question has come up more frequently.  Nine States have the recreational marijuana legalization on the ballot, so more questions may arise.  The short answer is read your policy to find out if it is an excluded project type and ask the questions of your Professional Liability insurance carrier.  However, it seems that most carriers, at this time, are covering this type of exposure.  Largely, the insurance carriers view the shops as either a retail shop or a manufacturing facility (for the grow houses).

The issue that may arise is that the federal government does recognize marijuana as a legal drug.  Therefore, does this cause an issue with the policy with regards to the violation of laws

  1. Criminal, Dishonest, Fraudulent Or Malicious Conduct

This policy does not apply to any Claim based upon or arising out of any:

  1. criminal, dishonest, fraudulent or malicious conduct; or
  2. other willful violation of laws

At this point it doesn’t appear to be an issue since it is legal in the States that recognize recreational marijuana.  But there haven’t been any claims reported for insurance carriers to see what issues may or may not arise out of the design of the pot shops.  In the questions asked of the carriers there don’t seem to be any foreseeable concerns even with it being illegal federally.

The bottom line is that it is not considered an issue with insurance carriers at this time.  But be sure to not only check with your carrier but also be sure to read your policy so you are aware of the exclusions for your Design Professional firm.  Please feel free to reach out to your PUI Agent to help answer questions on your Professional Liability policy.

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