Identifying and Eliminating
$50 Million in Cannabis-Related Property Risk

A hidden and potentially large risk

An insurer covering property in the West had a long-standing policy to not insure any cannabis businesses, but its underwriters suspected at least some cannabis risk had crept into the book of business. After all, a large number of cannabis businesses have opened in the region, and these businesses appeal to property owners because they can generate substantially more income than traditional businesses.  

Like most insurers, the company had no way to efficiently check its book for the risk. There simply wasn’t time for an underwriter, or anyone else, to review the thousands of policies the insurer had written in states where growing marijuana is legal.  

Eliminating the financial exposure

The insurer invested in a book review for states outside Washington with CannabisFind from BuildingMetrix, a subsidiary of WSRB, and found its concerns proved valid. Washington, it turned out, was just the tip of the iceberg. There were exponentially more cannabis-related properties in its book outside Washington state, and the estimated total insured value at risk topped $50 million. Just one partial loss on one property could push the line of business from profit to loss for the year. 

The insurer then leveraged the locational data from CannabisFind to identify which policies required attention. Once the insurer confirmed that a property housed a cannabis grower or processor, it set the policy to non-renew and notified each agent well in advance of the appropriate date.  

With the hidden risk revealed and eliminated, the insurer is now far more likely to achieve and maintain a desirable loss ratio and protect the long-term health of its products. All that was required was a fast, affordable check of its book.