Canadian Underwriter

Hazy days of risk ahead, dude

November 27, 2017   by Jason Contant, Online Editor

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The upcoming legalization of marijuana will “impact virtually every line of business” of the insurance industry and introduce a whole new hazy world of risks, a managing general agent said Friday.

“If you buy a cookie at Mrs. Smith’s cookie shop with cannabis, is she going to be required to define the THC levels within there?” asked Mark Woodall, president and CEO of Special Risk Insurance Managers in Langley, B.C., referring to the main ingredient in marijuana. “Don’t know. It’s coming so fast and [it’s] such a broad range topic, it’s going to impact your liability, your accident benefits, your employee benefits, and your property [insurance].”

Speculating on the impact of legalization of marijuana on underwriting home insurance policies, Woodall provides the following example.

“If everybody is now modifying their electrical system to allow for hydroponics of four or 24 plants, and they do it themselves and ultimately burn the premises down, is it covered or not covered?” Woodall asked. “Who wants to cover, who doesn’t want to cover?”

Canadian provinces are taking different approaches regarding distribution, consumption and growing methods, if applicable. But what hasn’t been defined is the “appropriate” THC levels.

“What is the potency level of the product and how does an individual react to it?” Woodall wonders aloud. “Can you buy a cookie from Mrs. Smith that’s got a minimal level of THC impact from it, and then you go across the street and you’ve got one that is totally different?

Related: How marijuana legalization could affect accident benefits

“Once you get the impact of the drug in your system, how long does it stay? What is the down time period? In alcohol, we’ve got it fairly defined.”

Police officers are still struggling with measuring marijuana impairment, Woodall points out. In contrast, the strength and effects of alcohol can now be measured, but that’s only after many years of research, review and understanding.

Despite the challenge of the unknown, Woodall said that he finds the legalization of marijuana to be very exciting because of its potential to shake up the insurance industry’s established way of thinking.

“We are a business that is generally very boring,” he says. “We’re a product that people buy because they have to. Now we’ve got this new product coming onto the marketplace and the old, stodgy insurance company is being turned upside down.”