Claims Reserve

In the cannabis industry, a claims reserve refers to the funds an insurance company sets aside to cover a reported claim that has not yet been settled. It acts as a financial safeguard, ensuring that money is available for long-running claims—such as product liability or crop loss cases—that may take years to resolve.

Why It Matters
Adequate reserves ensure claims can be paid as they develop over time and are a core component of insurance program stability.

Example
A portion of premium is allocated