Medical Marijuana, Insurance, and Ambiguity: Lessons from the Busato Case

Anthony Edward Busato recently found himself at the center of a significant legal case against Gore Mutual Insurance Company, highlighting critical issues regarding insurance coverage, legal marijuana cultivation, and policy ambiguities.

Busato, who cultivated marijuana legally to manage chronic and debilitating pain stemming from multiple injuries and subsequent surgeries between 2006 and 2013, faced an unexpected hurdle when his home suffered a kitchen fire unrelated to his cannabis cultivation. Despite the unrelated nature of the fire, Gore Mutual Insurance denied his claim, citing a policy exclusion against properties involved in marijuana cultivation.

The exclusion used by Gore Mutual specifically referenced dwellings or private structures involved in any aspect of marijuana production or distribution as excluded from coverage. However, the Ontario Court of Appeal found this language problematic, noting explicitly, "this reflects poor drafting and creates ambiguity."

The case underscores an evolving tension in insurance policy language, especially regarding activities now legally permitted, like marijuana cultivation for medical purposes. It illustrates how insurers must continually adapt their policy language clearly and unambiguously to match the current legal landscape.

Busato's victory in the Court of Appeal highlights the necessity for clarity and fairness in insurance contracts. Legal experts emphasize the importance of reviewing policy wording meticulously to prevent similar disputes. This case serves as a cautionary tale for insurers, policyholders, and brokers alike, urging transparency and precise communication about coverage limits and exclusions.

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Jenny is a business insurance broker with Waypoint Insurance.

She is also a business development consultant with Impresario Partners, helping Canadian Business expand overseas.

She can be reached at 604-317-6755 or jhansen@waypoint.ca. Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  Connect with Jenny at BlueSky: https://bsky.app/profile/jennyhollyhansen.bsky.social

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Tags:  #Jenny Holly Hansen #Medical Marijuana #Gore Mutual Insurance Company #Insurance Claim #Fire Insurance