Cannabis Coverage: A Fixture, Not a Fad

Cannabis Coverage: A Fixture, Not a Fad

Phil Skaggs  |  Assistant Counsel, AAIS Government Affairs, Legal & Compliance


In April 2018, AAIS filed the first Cannabis Businessowners Policy (CannaBOP) in California. Since then, the cannabis industry has exploded – and interest in CannaBOP has spiked. Eleven states and the District of Columbia have fully legalized cannabis to date, with more states looking to legalize recreational and medicinal cannabis usage in 2020. Expanded use in cannabis means more need for insurance solutions, positioning AAIS to lead the way.

Deciphering the Cannabis Market
The term ‘cannabis’ is broad. It covers both medical and recreational marijuana, as well as cannabinoid products. Cannabinoids are one of the classes of chemical compounds found in cannabis. They include, most notably, cannabidiol (CBD), which promotes relaxation and relieves anxiety without psychoactive effect, and tetrahydrocannabinol (THC), the psychoactive component that produces the euphoric high associated with cannabis.

Hemp and the 2018 Farm Bill
A cornerstone of the cannabis industry, and a key focus for AAIS, is hemp. Hemp is categorized under federal law as any cannabis plant that contains a concentration of no more than 0.3% THC by dry weight. Hemp’s fibrous nature and quick growing cycle make it an efficient and effective choice for textiles, paper products, plastics, polymers and more. 

In 2018, hemp was effectively legalized and removed from the controlled substance list under a federal farm bill. With that legislation in place, states now have the authority to regulate the production and sale of hemp and hemp products. However, states are prohibited from interfering with the transfer of legal hemp crops and products across state lines for commercial or personal purposes.

Most importantly, the bill opened the door to protections for hemp under the Federal Crop Insurance Act and removes barriers to private insurance and banking services. Producers and businesses that deal in hemp products, including CBD extracts, are now free to pursue this business more aggressively and with less concern that a seismic shift in federal priorities will disrupt the industry. 
Since the bill’s passage, analysts are seeing the hemp industry evolve into a legitimate and promising market. Developments are underway in several states, including Alabama, Kentucky, Oklahoma, Tennessee, North Carolina, Virginia, and Pennsylvania. These states, among others, are taking steps to develop new or improved hemp programs, pass legislation, and submit plans for USDA approval.

Looking ahead: Expansion, Enhancements and Endorsements
The unprecedented growth of the cannabis industry creates great opportunity for AAIS Members. As the marijuana and hemp industries continue to expand and mature, more eyes are turning to supporting industries, such as insurance, to reinforce cannabis businesses.

From first- and third-party homeowner’s claims covering equipment, plants, theft and storage, to personal and commercial auto policies protecting product transportation, commercial properties, product liability, cybersecurity and more, the insurance industry will play a critical role in the success of the cannabis industry. 

Standardized programming and deliberate policy language are essential. AAIS is working to supply insurers with practical tools and comprehensive coverage options responsive to all levels and categories of cannabis risk. AAIS has set aggressive goals for the coming years, focusing on expanding and enhancing the CannaBOP product, developing exclusion and hemp coverage endorsements, and updating its farm, commercial and homeowners’ program updates to allow for cannabis growth and sales.

The cannabis industry is a fixture, not a fad. It is growing quickly and profitably. With the assistance of AAIS tools and programming, your business can, too.


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Press: AAIS Adds Multicloud Capabilities to openIDL Blockchain Network

Press: AAIS Adds Multicloud Capabilities to openIDL Blockchain Network

Insurers, regulators and other openIDL participants will now be able to run the blockchain network on any cloud provider.

LISLE, Ill., August 7, 2019 - AAIS (the American Association of Insurance Services), the only national not-for-profit insurance advisory organization governed by its Member companies, today announced new multicloud capabilities to openIDL (open Insurance Data Link), giving members the flexibility to deploy the blockchain network on the cloud infrastructure of their choosing.

openIDL is an open blockchain network built on the IBM Blockchain Platform on the open source Hyperledger Fabric designed to streamline regulatory reporting and provides new insights for insurers, while enhancing timeliness, accuracy, and value for regulators. openIDL helps enable the efficient, secured, and permissioned-based collection and sharing of statistical data. 

As the insurance industry continues to integrate blockchain into their processes and insurers set their sights on scaling, it’s clear that the value of blockchain networks increases with the addition of diverse industry Members. However, diverse networks can also add complexity. In today’s hybrid and multicloud world, organizations run both on-premises and in distributed cloud environments. Organizations today leverage cloud services from five to 16 cloud vendors.

Based on the IBM Blockchain Platform, openIDL’s new multicloud capabilities allow network participants the ability to more easily integrate their data with openIDL and manage their openIDL components on different cloud environments.

“Our goal is to build the most technically up-to-date, cost effective, open platform available,” according to Joan Zerkovich, Senior Vice President of Operations at AAIS. “Multicloud capabilities enable more efficient performance within openIDL and lay the foundation for further development and integration in the long run.”

AAIS serves as the openIDL administrator, providing unbiased governance for the blockchain network within existing insurance regulatory frameworks. AAIS Members may participate in the openIDL blockchain as part of their existing or new Program Affiliations. AAIS welcomes participation in the openIDL from across the insurance industry through Membership and Data Affiliation. Simply contact an AAIS Advisor for details or visit to “get linked.”


Established in 1936, AAIS serves the Property & Casualty insurance industry as the only national nonprofit advisory organization governed by its Member insurance carriers. AAIS delivers tailored advisory solutions including best-in-class policy forms, rating information and data management capabilities for commercial lines, inland marine, farm & agriculture and personal lines insurers. Its consultative approach, unrivaled customer service and modern technical capabilities underscore a focused commitment to the success of its members. AAIS also serves as the administrator of openIDL, the insurance industry’s regulatory blockchain, providing unbiased governance within existing insurance regulatory frameworks. For more information about AAIS, please visit


John Greene
Director, Marketing & Communications


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Source: Globe Newswire