General Underwriting and D&O Coverage with CannGen Insurance Services

General Underwriting and D&O Coverage with Charles Pyfrom of CannGen Insurance Services

-CannGen Insurance Services is one of the largest cannabis insurance providers in the US and Canada. CannGen underwrites for most of the top revenue-generating MSOs in the space (in the US and in Canada) and is the first Managing General Underwriter (MGU) exclusively focused on the legal cannabis industry. Talk to me about the issues surrounding MSOs and what those companies seeking to expand into a MSO or attach to one should be aware of.

PropertyCasualty360 recently wrote about Cannabis operations are hungry for D&O coverage

Cannabis companies need D&O not just to protect their current executives and board members but to attract leading talent in the space as well as draw in new investors to scale up the business.

Directors and officers (D&O) liability insurance protects the personal assets of corporate directors and officers, and their spouses, in the event they are personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing a company.

“First and foremost, by not having D&O protection to interest the highest caliber of board or executive team members, an operator is limiting the pool of candidates they can attract to guide their company,” Pyfrom tells PropertyCasualty360.com. “A lot of clients tell me that adding D&O to their portfolio allowed them to attract board member X or investor Y. Absent that coverage, they couldn’t have accessed that growth.”

-Charles moderated a panel at the 2021 Insuring Cannabis Summit:  describing the difficulty of explaining to insurance buyers about the lack of capacity or certain lines of insurance.

“Honestly we’ve found with a lot of our buyers and brokers we talked to where they’ll say, ‘What do you mean it’s not available?’” Pyfrom said. “That shock factor is real, even though cannabis has been more than a decade strong, continue to be a force in the industry of an up and coming boom, where it’s attracting great operators and great executives from other industries to come over and say, I want to be part of this entrepreneurial venture that is cannabis, that’s doing a gazillion dollars in sales every year now. I mean, it’s real numbers.”