KRD Risk Management Consulting & Insurance Group, LLC

12/15/2023

Fortune favors the bold...

The cannabis insurance industry needs risk takers and taken from the first book ever given to me at CB/CICC in June 1990: "If there were no losses"...

My take is that if you were insuring commercially in the 1960s to early 1980s Canada, or the USA or the southwestern Industrial Ontario corridor from my hometown of Windsor, ON through hundreds of kilometers of the great country of Canada, and then you were insisting that an IAO/ISO wording be offered, you were going to lose market share and did when Chubb put forth Customarq.

And then when they specially designed insurance products for metal workers/manufacturers, plastic workers, printers, and electronics (and then wineries...and yes there are wineries in Ontario and in Canada) or when their thought leaders and subject matter experts designed an evolving commercial lines marketplace into target customer segments around Financial Institutions, Chubb Custom Market (Toronto and Vancouver were hubs for entertainment even then...like "Three Men and a Baby" being filmed in my University town in the late 1980s) and then Mining (ERG) or even High Net worth Personal Lines (Bridal Path of Toronto, etc) with "Masterpiece."

Or insurance product focused divisions like Executive Protection, Umbrella, Marine, Surety, and B&M. Or enhanced products within a specialty for instance like fidelity, KR & E, Fiduciary Liability, or a Business Interruption contract (thank you Bob Edgar for that training), you were leaders in the game...

These industries and products required craftsmanship, and not a cookie cutter approach. Providing meaningful insurance risk transfer mechanisms and not trading dollars, paid off with an industry leading underwriting profit, outstanding and satisfied customers who were less inclined to self insure or sue for insurance contracts that were ambiguous. You'd enjoy a tremendous market share, an outstanding EBITDA and share price, relationships with the broker networks that were meaningful, glorious and productive and then you also would have highly sought after as they were trained extremely well, insurance professionals, leaders and technicians. Because history is inclined to repeat itself.

Underwriting as a discipline means so many different things but to me, it will never be "cookie cutter"

Also please for this industry and others and for products too...be bold with insurtech as well. It's evolve or perish. Similar to what the great Bob Dylan (Robert Zimmerman) sang" "The times they are a changin" KRD has... with Loro at https://krdcannabiscover.loroinsurance.com/

11/30/2023

Good evening:

If you're in Las Vegas for MJ Biz, please connect with me at 214-923-2724. Or please, let's get on each other's calendars in December. We'd like to help and promise boutique/concierge/highest grade level services to your business.

So many insurance and risk management issues are on the minds of the leaders / and management teams of those in the cannabis industry like:

Costs of commercial insurance? ("we don't want to pay an arm and a leg so what's it going to set my business back financially to purchase insurance?")
Which commercial insurance products does my business need to buy and which ones should I merely consider purchasing? ("it's our first time for buying commercial insurance for a business and we don't want to be uninsured and we don't really know what's out there")
Major concerns being expressed by all seed to sale companies are about workers comp claims including air quality claims, "slip and fall" i.e. premises liability claims and a very high number of concerns/conversations about product liability claims/lawsuits.
We heard from a dozen businesses today that catastrophic/total property events being uninsured like a fire, or tornado would be the end of their business. Are you involved in claims? (Yes. Definitely. Always an advocate after a loss or claim).
A few businesses expressed that their business property insurance policy covers basic theft for a mere $ 20,000 in limits. That they're really concerned about that limit being too low vs. their inventory levels and some of the insurance contract's warranties? Can you walk me through the whole contract and where the pitfalls are? (Yes. Definitely. The fine print matters as does the calculation of the exposures).
Tell me about Cyber claims and protective measures other industries are implementing?
Grow and dispensary businesses expressed that they can absolutely handle a deductible but they're going to be financially impacted if they have a partial or total loss on property or a huge lawsuit from products. Do I have choices of insurer and their policies? My family has a restaurant too and their choices seem limitless. (Yes. Definitely your business has choices but the marketplace of insurers is nowhere near the number for cannabis as it is for restaurants).

You're really not alone. Going online to purchase these coverages without a licensed and collaborative insurance agent is a dangerous game to be playing with your bottom line.

Here's a case in point from this week about going direct to the insurer and not enjoying professional or sound advice from an independent agent. The link is about homeowner's insurance but the principles are the same):

a/claims/vacancy-confusion-in-a-home-insurance-policy-what-the-court-said-1004240629/

---KRD is by your side too---Every business is concerned that an event or a lawsuit could impair or even destroy a business that could have been insured.

I was also asked Wednesday here at MJ Biz, what makes up the premium and what could our business expect to see? -- Issues like your revenues, payrolls, employee count/classifications, total insurable value of the property (TIV), protections on the property, labels, prior claims, etc. all play into the determination of the annual premium for any client by coverage.

For about $ 15 dollars per day per coverage line (but to be frank, it's going to be more for a "larger" entity), KRD has placed /brokered above average insurances for property, workers compensation, general liability (including premises and product liability), crime (embezzlement and theft, etc), surety, active shooter , employment practices liability (workplace misconduct issues) and cyber programs.

---as KRD focuses on advancing the knowledge of those leading companies in cannabis...no one wants to see a business destroyed because of a fire, flood or lawsuit when it could have been insured for essentially the same monthly premium as a 22 year old driver's comp/collision and liability auto policy or a home & contents insurance policy or for a little more than a term 20 life insurance policy.

This article specifically related to cannabis insurance, that just came out 3 weeks ago demonstrates why there's a need for experienced, qualified and collaborative insurance advice for the cannabis industry.

Insurance claim denied for cannabis business and its 2020 fire

Justia summary on the cannabis business and its legal battle with the insurance company

KRD has audited > 10,000 insurance policies over 33 + years. A denial of insurance coverage from the insurance company which is something that none of us want to see for the industry, is a possibility given exclusions, etc. - Management and Owners need to be aware of all the fine print/insurance legalese and how these issues line-up with the operations & exposures of your business. One of the major goals of management has to be that their business is not blindsided and financially devastated by an uninsured claim or loss or a denial of insurance coverage.

We're also proud of our work on the NCIA Risk & Insurance Management sub-committee. KRD is not just comprised of insurance placement oriented professionals as our insurance agency is also licensed as a Risk Manager. ---In a nutshell, by also utilizing KRD as your outsourced (fractional) risk management team you get more than just an insurance agency. It is also much less expensive than employing a full-time & dedicated risk manager.

All the best,

Keith Doan, FCIP, RF (Fellow of the Chartered Insurance Professionals & Risk Fellow)

krdcannabiscover.loroinsurance.com (client portal for cannabis industry)

krd.loroinsurance.com (client portal for non-cannabis industry and for ancillary businesses within the cannabis industry)

on Facebook: please join our group: "Commercial Cannabis Insurance Across the Nation"

[email protected]

833-747-5467

214-923-2724

Taking control of cyber risks with expert help

11/14/2023

https://conta.cc/49A1by2

Cannabis Industry Industry Experts: Knowledge is Power!     Strategies for Commercial Insurance and Risk Management KRD Achieves Results!! Call us (an NCIA member) today at 214-923-2724   Commercial

11/09/2023

Strategies for Commercial Insurance and Risk Management
KRD Achieves Results!!
Call us (an NCIA member) today at 214-923-2724

Commercial Business Insurance for Cannabis Operations
Ever wonder how small to large privately held businesses or even publicly-traded Fortune 5000 companies often choose their commercial insurance agency?

KRD has been involved in > 100 RFP's (request for proposals) for clients to select their insurance agency. It's not a decision that should be ever taken lightly by any business but definitely not by cannabis operations: "Seed to Sale" as there's just too many issues that require trusted and collaborative advice and not just someone "selling your business some insurance"

Factors like the following are often evaluated and "scored" in an RFP process and these are graded/scored by what's important to you as the buyer:

1. Background of the agency (part of an "aggregator" or "cluster"/ been in business 1 year or 30, focused on cannabis for 3 months or 10 years)?
2. Team experience (graded/scored) by line of insurance coverage (property, liability, product recall, wc, business interruption, cyber, surety, auto, crime (premises, in transit, employees, etc) employment practices, D & O, flood, crop, etc)
3. The agency has direct agency appointments with dedicated cannabis insurers? None are in jeopardy and how's their overall claims experience with those insurance companies?
4. How adept and experienced is the proposed team on needs assessment for your business?
5. Remuneration: commission, fees, policy administration fees they're requesting, etc. It all adds up and is part of your business Total Cost of Risk (TCOR).
6. Where is the agency licensed State wise? Do they bring a one State or multiple State perspective to your risk transfer and risk retention needs?
7. Is the agency also licensed and experienced as a Risk Manager?
8. Brochures and marketing materials they produce for clientele
9. Policy comparison documents samples that they produce for clientele (and not just a comparison of "the basics" of limit, deductible, premium)
10. What kind of voice, advocacy and reputation the agency has in cannabis and in general with commercial insurance?
11. Ancillary services vs. just placement of the program. Like claims advocacy and loss control
12. Current cannabis clientele and references
13. Number of agency personnel assigned to your account and experience of that team
14. Service standards for paperwork and processes to confirm accuracy of documents purchased by the client
15. Ability to generate premium financing for your insurance purchases
16. Focus and commitment to insurtech so efficiency for you and your team workwise is in place and you can focus your efforts on growth and profitability (and not commercial insurance like applications, etc.
17. Use of wholesalers to aid them in the placement of your insurance coverages? Are wholesalers used all the time? Just a couple of specialized coverages like D & O or x?
18. How extensive is the agency's centers of influence with other providers you may need like banking/credit unions, tax preparation, security, payroll services, etc
19. Have they been involved in claims? Can they walk you through the process? Or does the agency turn claim(s) over to the insurance company without being involved? ---Clients are often in uncharted territory when it's their first claim or even first claim by product line and trusted, collaborative advice and advocacy is paramount.
20. Engagement agreement (the contract) particulars between the agency and your commercial business.

Here's the thing....Commercial insurance is vastly different than personal lines yet most licensing and even continuing education for licensed agents is significantly about personal lines including home and auto. Not commercial. That's not at all helpful to your cannabis operation/business, your TCOR, your leadership and your ownership's peace of mind.

Many insurance agencies are trying to "get in the game" but they're not all subject matter experts in cannabis or insurance or maybe they're specialists in say surety but aren't strong in property and liability. Cannabis operations having an inexperienced agency and team has the potential to be a catastrophically bad decision for your business.

In 2022 after a decade of crafting cannabis commercial insurance programs for this dynamic and quite underserved industry, KRD developed a state of the art and unique commercial insurance client portal for cannabis businesses and their commercial insurance needs.

krdcannabiscover.loroinsurance.com
The portal can be reached via "Visit our Website" below too.

We firmly believe "Knowledge is Power." That's one of the reasons why we've been the underwriter, risk manager or producer for a who's who of companies since 1990. A career forged on being the 1st call so you can focus on your business, revenues, profits and not commercial insurance/risk management. Licensed in 28 States and as licensed as a Risk Manager too. Details are in the following link: Our Background in Insurance

KRD can be reached (text and voice) at 214-923-2724 for all your business/commercial insurance & risk management engagement needs or if it's preferable: please email us at [email protected] or [email protected] to start the high-quality process and services, we've spent 33 + years cultivating. or

Ask us for the insurer application we'd recommend for placement purposes. We can complete the application together if you'd prefer that option vs. the client portal approach.

Contact us for our brochures related to cannabis insurance offerings and coverage line brochures or loss prevention booklets applicable to all industries like active assailant, employment practices liability, crime insurance, etc

All the best for a fantastic November!! We hope to see you at MJ Biz 2023!

Keith Doan, FCIP, RF (Fellow Chartered Insurance Professionals and Risk Fellow)

KRD is a proud member of the National Cannabis Industry Association www.thecannabisindustry.org) where I'm a committee member on the NCIA Risk & Insurance Management sub-committee. We are informed and contributing to the insurance and risk management issues you're facing as an operator in the industry.

11/06/2023

I drove 1200 miles roundtrip on friday and yesterday to visit the cannabis product distribution site of a valued client. To apply my loss control "expertise" and 33 years of commercial property underwriting. The location was in a city in Tennessee that I had never been to and I must say it was a great drive and we had a nice time in Hot Springs, AR too. Figured the extra 700 miles roundtrip on friday (from 11 am to 8:30) wasn't a good way for Tori Gray Doan to spend her day. I do love this client and can't wait to try their products too.
I love my clients and look forward to seeing them all succeed.

11/01/2023

Heading out Friday to visit a wonderful client for a "pre-official" loss control property inspection. Looking forward to seeing Will and his new warehouse.
Planning to purchase a jug (or two) of KYS too. No doubt the best products of their kind.

10/26/2023

we're all in a pinch with gas up, food up, etc. and if there's one thing all of us have in common, it's concern about home, auto, condo, etc. insurance rates and then this just hit my desk:

Hello,

Insurance company ### is taking further profitability actions in TX and OK. Formal notifications will be sent directly to you soon.

Our local representatives will be meeting with all agencies that are appointed with Insurance company ###



Effective November 10, 2023, we are taking the following actions in Texas impacting new business in the Insurance company ###x Property programs in select counties or statewide as detailed below:



We are pausing new business for all insuring company ### property products (###xHomeowners, Texas Homeowners Policy Form A, Texas Dwelling Policy Form 1 (TDP1), Texas Dwelling Policy Form 3 (TDP3), Condo Landlord, Condo Homeowners, Tenant and ###) products in the following 25 Texas coastal counties: Aransas, Bee, Brazoria, Calhoun, Cameron, Chambers, Fort Bend, Galveston, Goliad, Hardin, Harris, Jackson, Jefferson, Kenedy, Kleberg, Liberty, Matagorda, Montgomery, Nueces, Orange, Refugio, San Patricio, Victoria, Wharton, and Willacy.
Homeowners, HOA, TDP1, and Vacant and Rental Condominium risks will still be accepted in counties served by Texas Windstorm Insurance Association and with a Signed Acceptance of Windstorm or Hail Exclusion.
We are pausing new business for TDP1 and TDP3 Landlord and Owner Occupied uses in Bexar, Collin, Dallas, Denton, Rockwall and Tarrant counties.
We are pausing new business for Condo Homeowners and Tenant policies statewide.

10/26/2023

with the tragic events unfolding now in Maine...

does your company:

have active shooter guidelines and procedures for staff in the event tragedy hits your premises?
does the company purchase active shooter insurance?
if the local law enforcement has the plans on the building

Have you reviewed the Active Shooter Event Quick Reference Guide — FBI

your doors (including front) should be opened only by staff allowing visitors in/ ie. no unfettered access for anyone. Buzz in and better doors.
if you don't have any bullet proof rooms and you don't have any idea if a family member or vendor or disgruntled employee even has a handgun on them, then you're vulnerable.
(signs about handguns on premises and even a TRO on a disgruntled employee won't be a deterrent)

Having been with the insurer on Columbine, prospecting Cinemark during the Batman shooting, the former u/w on Mandalay Bay, and major hospital systems and restaurants and financial institutions across the country, you and all staff should have training and the risk management team has hopefully evaluated an insurance policy.
ask me for the application and all the guidelines we have in our library to assist.

for some companies this policy is pennies per day and even more important is the risk management procedures and protocols being known by staff. Training matters.
[email protected]
krd.loroinsurance.com
214-923-2724

10/24/2023

https://www.cannabisbusinesstimes.com/news/israel-intercure-cannabis-company-two-workers-hostage-hamas/?utm_campaign=Cannabis+Business+Times+Newsletter&utm_source=10%2f23%2f2023+-+&utm_medium=email&utm_term=https%3a%2f%2fwww.cannabisbusinesstimes.com%2fNews%2fisrael-intercure-cannabis-company-two-workers-hostage-hamas&utm_content=505443&isid=B96189

10/23/2023

Oklahoma Cannabis Surety Bond

What is an Oklahoma Cannabis Surety Bond?
It is a type of surety bond that is required of commercial medical ma*****na license applicants in Oklahoma.

Commercial medical ma*****na license applicants are the following:

Growers – the license will allow businesses to legally grow ma*****na in Oklahoma. Once licensed, growers will be able to sell to dispensaries and processors.
Processors – the license will allow businesses to legally process ma*****na for medical purposes only. Licensed processors will be allowed to sell ma*****na to dispensaries as well as process concentrated form for the use of licensed medical ma*****na patients.
Dispensaries – licensed dispensaries will be allowed to legally sell medical ma*****na and medical ma*****na products, which includes seedlings and plants. Licensed dispensaries can only sell ma*****na to the following:
Research license holders
Patient license holders
Caregiver license holders
Parent or legal guardian named on a minor patient’s license
The license of the aforementioned persons should be verified with the OMMA system by the licensed dispensary prior to every transaction.

Transportation or transporters of medical ma*****na – Licensed transporters will be legally allowed to transport medical ma*****na for licensed growers, licensed processors, and licensed dispensaries.
The surety bond requirement is mandated by the State Question 788, which legalizes medical ma*****na in Oklahoma. A new section will be added to the Title 63 of the Oklahoma Statutes and the Oklahoma Administrative Code (OAC) 310:681.

How does an Oklahoma Cannabis Surety Bond work?
A surety bond is a legal agreement between these parties:

Principal – the license applicant. The primary responsibility of the principal is to fulfill the obligations that are stated in the bond.
Obligee – the Oklahoma State Department of Health. An obligee is a bond’s beneficiary.
Surety – the issuer of the bond and the party who will be liable – along with the principal – for the failure of the principal.
A Ma*****na-Cannabis Surety Bond will serve as a guarantee to the Oklahoma Medical Ma*****na Authority and the Oklahoma State Department of Health that the principal will fulfill his or her statute-based obligations once licensed.

If the principal defaults on his or her obligations, the obligee will be eligible to file a claim against the surety bond.

If a claim is filed, the principal is expected to take action in order to resolve the claim. If the principal fails to take action, the surety will remind the principal of his or her bond obligations.

If no action is taken, the surety will investigate the claim. If the claim is not valid, then no further action will be taken.

However, if the claim is valid, the surety will step in and pay the obligee for the losses incurred due to the principal’s offense. The principal will then have to reimburse the surety for the payments made.

How much should I pay (premium) for an Oklahoma Cannabis Surety Bond?
The bond premium is heavily dependent on the principal’s credit score. If the principal has a good credit score, the premium will be lower.

Those who have bad credit scores may still be able to get a bond, but their bond premiums will be higher because of the higher risks involved.
Additionally, the underwriter may need to see financial statements (personal and company) in order to determine the risk.

How can I get an Oklahoma Cannabis Surety Bond?
KRD is licensed to provide an Oklahoma cannabis surety bond.

We have created a streamlined bond process so that you can get your bond in the easiest and fastest way possible.

Here’s how to get bonded:

1. Apply for this surety bond. If you are ready to do that now, you will fill out a simple 2 page application through KRD Risk Management Consulting & Insurance Group, LLC

2. After we have received your application, we will ask you to submit the necessary information needed for the underwriting process. These are the following:

Your financial capability
Your business or job performance history
Your credit score
An expert underwriter will carefully evaluate all three in order to attain the best credit decision possible. To avoid any delay, the information that you should submit should be organized and concise.
3. Once you’ve signed the indemnity agreement and have paid the bond premium, your bond will be sent to you immediately.

10/20/2023

Check out our new group page: Commercial Cannabis Insurance across the Nation