An unnamed insurance carrier in Great Britain has paid out more than $1 million to a cannabis cultivator in Southern California, following the Thomas Fire that occurred in December and January.

The payout is said to be the biggest insurance payment ever awarded to a legal cannabis business.

Covering crop damage caused by raging fires and ash contamination, the insurance award is an indication of how quickly the legal cannabis industry has grown to become.

So large was the cannabis company insurance payout, however, that the impacted cultivator was slammed with a premium of $30,000 and a deductible that topped $25,000. Since the payout, the London-based insurance company has made the unanimous decision to restrict work within the legal cannabis industry.

Cannabis companies are grasping insurer’s attention

When compared to the past, corporate America is taking a completely new approach to cannabis companies.

Vice president of Cannabis Insurance Professionals, Matt Porter, was one of the people responsible for putting together the policy that resulted in the $1 million claim.

“This policy contained some wording related to what we consider atmospheric change, or contaminants coming into the greenhouse,” he told The Cannabist.

Porter claims that the wording was critical for the claim payout. His client’s crops became polluted by toxic chemicals from the ash, which was described as “falling like snow” soon after the Thomas Fire erupted.

Porter believes that the recent payout is a sign of positive changes within the insurance industry and especially so for legal cannabis firms.

Despite this, things could get more costly for cannabis firms, with Porter stating how coverage is going to be “significantly more expensive.”

Insurance companies are standing by their policy terms

Currently, cannabis is illegal under U.S. federal law, but this doesn’t seem to be stopping insurance providers from doing what they promise in the small print.

“This was a legitimate claim that was paid,” said the CEO of Cleveland-based Cannasure Insurance Services, Patrick McManamon.

Since 2009, McManamon has been working closely with legal cannabis business. He relates the pot-focused attitude shift to a major growth opportunity for cannabis company insurance payouts.

“These companies are actually standing by what they said. In the past, I think we’ve all heard horror stories of insurance companies (coming up with) some cockamamie something-or-other in their policy to get out of paying a claim. And here’s one that obviously…stood by its policy and paid it. That’s all you can ask for,” he continued.

The CEO stresses the importance of knowing the right local agent who can provide proper coverage.