As legal dispensaries become commonplace in many states, the need for cannabis workers compensation insurance increases. Here’s how you can get plenty of coverage without going over budget.
Wonder if you need to purchase cannabis workers compensation insurance for your business? All employers, even those in the cannabis industry, need to protect their workers from job-related injuries and hazards.
As long as you have employees on the payroll, it’s your responsibility to buy a workers’ comp policy. Not only is it the law, but having coverage also protects your staff in the event of an accident.
Is Cannabis a High-Risk Industry?
It’s not always easy to locate an insurance company willing to sell coverage to a cannabis business. Many insurers view the industry as high-risk, and others don’t want to deal with the legal ramifications in each state. There are many types of employees in the cannabis industry, including growers, distributors, lab techs, and retail staff.
Each job poses its own risks. Here are a few of the most commonly reported injuries:
- Exposure to pesticides, fungicides, and other hazardous materials
- Puncture wounds, lacerations, and cuts
- Repetitive motion injuries
- Slips, trips, and falls
Coastal Work Comp Brokers understands it’s not always easy to buy affordable insurance policies for cannabis workers. That’s why we can help you obtain workers’ comp coverage no matter your industry.
We specialize in finding the best plan for high-risk and high-mod industries. We even work with those needing multi-state risk coverage and new ventures.
Regardless of if you are with the State Fund or have a lapse in coverage, we will find you a low-rate option. Let us save you 30-40% on your premiums!
What Accidents Does Workers’ Comp Cover?
Workers’ compensation insurance protects businesses in case an employee gets injured at work. Eligible accidents must occur while the worker is on the clock performing regular duties.
Personal injuries and those due to horseplay or negligence do not qualify for compensation. Workers also cannot collect benefits due to illness unless they can prove they got sick as a direct result of working.
For example, if a cannabis grower gets cancer due to pesticide exposure, they may be eligible.
Insurance will pay for any medical bills and other related expenses. These may include rehabilitation, disability, lost wages, or funeral costs. Once the employee returns to work, the policy will stop paying. If they can’t go back to work because of their injury, they may qualify for long-term disability.
Before workers’ compensation became the norm, injured workers would sue their boss for damages. These lawsuits often lead to bankruptcy. However, after settling a workers’ comp claim, workers can’t pursue further legal action against their employer. Having insurance not only protects workers, but it gives business owners peace of mind.
How Is Cannabis Workers’ Comp Calculated?
The National Council on Compensation Insurance (NCCI) lists cannabis jobs under a range of class codes. Most retail dispensaries and delivery sales companies have a class code of 8017. This numerical code helps determine annual premiums for workers’ comp coverage.
The formula universally used by all insurance companies is:
Class Code Rate (X) Employer Payroll (X) Experience Modification Rating (=) Premium
This formula ensures companies with a higher risk level pay more for coverage, but it can also make it difficult for small businesses to afford a plan.
Furthermore, if a company has coverage gaps, losses, or non-renewal, the rates will only continue to increase.
Does Workers’ Compensation Cover All Cannabis Employees?
By definition, workers’ comp covers all regular employees listed on the payroll. It doesn’t matter if they work full-time or part-time. Coverage is the same regardless of if someone works 10 or 40 hours a week. The policy extends to both hourly and salaried workers. Seasonal employees also qualify.
Workers not listed on the employer payroll are ineligible for workers’ comp benefits. Independent contractors, for instance, aren’t legally employees and won’t receive coverage. Instead, any freelance cannabis workers should buy liability insurance to protect themselves.
When Do Workers’ Compensation Benefits Begin?
When someone gets hurt at work, they should file for workers’ compensation as soon as possible. The plan will begin paying for any medical bills relating to an on-the-job injury right away.
There’s no delay, and workers don’t need to wait for approval. If the insurance company denies the claim for some reason, the employee can always file an appeal.
Temporary disability benefits only pay once the injured person misses a full week of work. If they return on day five, for instance, they will not receive disability payments.
The plan, however, is retroactive. Once they hit day eight, the policy will pay for the previous days and any others going forward.
Find Affordable Cannabis Workers’ Comp Insurance
Operating without workers’ comp insurance is not only dangerous, but it’s also illegal in most jurisdictions. However, many insurance companies hesitate to work with cannabis-related businesses. And State Fund coverage is almost always overpriced.
At Coastal Work Comp Brokers, we take the guesswork out of finding high-quality coverage at a much lower rate.
We may be the ideal fit if any of the following applies to your business:
- Have 5-500 employees
- Currently with State Fund
- Want to lower your premiums
- Can’t afford a high deposit
- Work in a high-risk industry
- Non-renewed by your current carrier
- Have gaps in coverage
- Dealing with losses
Coastal Work Comp Brokers offers pay-as-you-go plans to reduce your premiums by 30-40 percent, and we can also help you avoid the annual audit.
Call 323-543-4141 for expert help in finding the best cannabis workers comp option for you.