A cannabis growing company has lost its bid to have its insurer cover $1.3 million in claimed business income losses after a building fire damaged almost 1,000 of its marijuana plants and shuttered one of its "flowering" rooms.
A federal district court judge has agreed with National Fire and Marine Insurance Co. that its policy for the Connecticut firm Theraplant did not cover the loss. U.S. District Judge Vern D. Oliver granted the insurer's motion for summary judgment.
National Fire's policy provided coverage for building and personal property damage. It also covered business income loss but only if the loss was caused by a suspension of operations or due to and during a period of property restoration.
Theraplant contended that its claim was in fact due to a suspension of operations while it was unable to use its fire-damaged flowering room and its equipment to develop crops because the room was being restored after the fire. The insured argued that this suspension of production was due to the building fire, not due to the cannabis crops it lost.
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