LifeScienceRisk rolls out cannabis insurance program
Mike Garofalo, product development director for LSR, told NutraIngredients-USA that LSR is working with Bermuda-based capital provider the Ascot Group on the new program, which was officially launched on August 1.
“This is all encompassing for cannabis,” said Garofalo. “We currently cover CBD and hemp, including full and broad spectrum extracts, and CBD – all of it.” LSR will soon be extending to cover recreational and medicinal marijuana.
LSR is well known to the dietary supplements industry, with multiple policies for companies in the category, including coverage for Prop 65 issues.
The hemp/ CBD explosion
The flood of CBD products onto the market despite the ingredient’s legal impediments has been unprecedented in the history of dietary supplements. The Hemp Farming Act, passed as part of the 2018 Farm Bill, removed the DEA hurdle for CBD (cannabidiol) from hemp.
For the US Food and Drug Administration (FDA), the IND exclusion clause still prohibits the inclusion of CBD in dietary supplement, foods and beverages. But this has not stemmed the tide of CBD product launches and the Agency is actively exploring potential pathways to permit certain cannabis-derived compounds in food or dietary supplements.
And these companies need insurance coverage. Garofalo noted that there are a handful of insurers active in this space already, but LSR’s approach is to be “thoughtful, judicious and competitive," he said. “We strived to be more user-friendly in our coverage. We don’t have broad exclusions, but there are respiratory exclusions.
“Risk selection is key to what we do.”
LSR will offer product liability, and they will add “errors and omissions” (E&O) to this. General Liability is also available but only if the company is already covered by the product liability with LSR.
Established dietary supplement customers who add a CBD/hemp line of products to their portfolio would continue to be underwritten by their existing LSR Nutra program, said Garofalo. But a company that is solely focused on CBD/ hemp would go into the LSR cannabis products program.
