Cannabis Underwriters and Claims Specialists Required

Insurance Blogger was astounded to read in Insurance Times, at the weekend, that Norwich Union have actually paid out over £1 million in claims to landlords who were ‘victims’ of so called cannabis farms.

According to the report Norwich Union (soon to re renamed AVIVA don’t forget!)shelled out one million quid and is now, rather belatedly, warning landlords to be on the lookout for suspicious tenants.

NU said it settled about 60 cannabis related claims two years ago and the trend in cannabis farming is on the increase. During the same year Police apparantely seized over five thousand plants which was 34% up on the previous year.

Insurance Blogger would love to know on what basis those claims were settled, and is perhaps more surprised to see that NU is so far behind the times.

Unless you’ve been living on Mars for the last ten years you would have seen Cannabis farms on the local news, and local and national press.

Suburbia has apparantely been overtaken by gangs of Vietnamese and more lately Russians, on their Dutch inspired gardening activites in two up-two down terraced houses with the curtains drawn all through the day and night.
Or as my Copper mate in Southend ( who used to work for General Accident before they made him redundant and who now hunts and sniffs out Cannabis Farms on his mountain bike patrols )says ‘The Ping Pong Pong’.

The gardening activities of the farmers causes particular damage to:
i) Walls and ceiling structures, which are often removed to maximise lighting space and for ventilation.
ii) Electrical wiring which is often in a highly dangerous condition due to bypassing meters and the risk has led to fire claims.
iii) Plumbing is often ripped up and expanded for hydroponic cultivation of Cannabis, often leading to flood claims.

Well there’s obviously going to be more of this type of activity as we sink into deep recession, and what concerns Insurance Blogger is that this type of ‘cover’ is open to abuse, and many an unscrupulous landlord may succumb to the financial pressures, and either be engaged in or have knowledge of the cannabis production and actively turn a blind eye or more likely make false claims to get the place ‘Done up’.

We are not currently aware of any Landlords Insurance policy that doesn’t include a ‘reasonable care’ clause, and this must mean regular site and inventory checks are the responsibility of the landlord, which would prevent premises being used in this way.
Furthermore landlords should be made aware that they could face criminal charges for allowing their premises to be used for the production of a class B drug, which carries a prison sentence and is regularly used against landlords suspected of complicity. It will be up to the Landlord to prove that they took reasonable care in preventing the premises from being used in such a way!

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