Workers’ compensation insurance is vital for any business because it protects employees against job-related injuries and diseases. Unfortunately, many cannabis companies do not recognize the unique challenges of workers’ comp within their industry. To help hemp and marijuana enterprises care for their employees, GreenWrap Insurance Solutions discusses some of the distinct issues cannabis businesses face with workers’ compensation.
What Is Workers’ Compensation?
If an employee gets injured on the job, workers’ compensation ensures they have enough funds to sustain themselves and their families until they can return to work. This insurance also helps them pay for medical expenses incurred while recovering from an injury. Employee benefits to provide ongoing care to an injured employee may be limitless, while the maximum payout for lost wages varies depending on the state and policy limits.
Workers’ compensation may protect employers against liability for the injury. The employee waives their right to sue the employer for getting hurt on the job in exchange for their compensation. The limit for employer liability coverage differs in each state, but businesses may enhance that amount using an excess policy.
Workers compensation can be viewed as collective liability. Typically, the employer is given protection from being sued when a policy exists, while also protecting the needs of an injured employee. The policy includes coverage for bodily injury, disease, death, dismemberment, and permanent disability when warranted.
What Are the Challenges of Cannabis Workers’ Compensation?
While any business type may encounter workers’ compensation issues, several factors make the insurance coverage unique for cannabis companies. When designing workers’ compensation policies for their employees, hemp and marijuana enterprises should consider the following challenges:
Distinct Safety Hazards
Some health and safety issues are present in every industry, but others are unique to cannabis businesses. For example, hemp and marijuana cultivators may be exposed to pesticide toxins or UV radiation from indoor growing lamps. Employers must account for all general and specific risks when crafting workers’ compensation policies to ensure their employees and business stay protected.
In many cases, work-related injuries are preventable with proper safety training. When employees have standard procedures for operating equipment and can identify potential hazards in their environment, workers’ compensation losses often decrease significantly.
Independent Contractors
Cannabis businesses frequently categorize their employees as independent contractors since this distinction protects them against tax withholding and unemployment taxes. However, if the subcontractor does not show proof of exemption or their own workers’ comp coverage, they may be added to your policy anyway, either at audit or upon injury or illness onset. That is why obtaining proof of coverage for all subcontractors is so important and required by all carriers.
Legal Ambiguity
Although many states have legalized cannabis, the federal government still considers the plant a Schedule I drug. Since the legality of cannabis is uncertain, some insurance companies are hesitant to provide coverage to hemp and marijuana businesses. GreenWrap Insurance Solutions has a solution for you.
Why Is Workers’ Compensation Coverage Important?
Accidents happen even at businesses that place safety precautions as a top priority. Every organization must implement workers’ compensation when required by state law in order to safeguard its employee against significant financial loss resulting from workplace injuries. Companies that overlook workers’ compensation often impede their own growth and success.
Each state has requirements for the coverage a business needs based on its size, industry, and composition. If a business does not uphold its workers’ compensation policy, it could face lawsuits, fines, criminal charges, and the closure of its business.
Get Workers’ Compensation Coverage for Your Business Today
If you need workers’ compensation for your cannabis business, turn to GreenWrap Insurance Solutions for reliable coverage. Our comprehensive and customizable seed-to-sale insurance packages cover numerous liabilities, including workers’ compensation. With over 20 years of experience, we serve businesses across all segments of the cannabis industry in North America, the Caribbean, Europe, and sectors of Latin America. Contact us today to learn more about workers’ compensation and our other coverage options.