Cannabis Workers Compensation

What is Workers Compensation for Cannabis Businesses?

If you have employees, you need cannabis workers’ compensation. At Cover Cannabis, we emphasize the necessity of this insurance for all cannabis operations. Not having workers’ comp can lead to severe penalties, including hefty fines and potential business shutdowns. For clarity on whether your helper is an employee or just an assistant, more info can be found here.

Cannabis Workers Compensation, also known as Marijuana Workers Compensation Insurance, is a specific type of insurance that provides coverage for businesses involved in the cannabis industry. This insurance is crucial because these businesses face unique risks, including the potential for lawsuits if a worker claims harm from their work.

Here are some key points to understand about Cannabis Workers Compensation:

1. Why is it needed? Like most businesses, cannabis companies need insurance to protect them from financial, legal, and reputational risks¹. The valuable products they produce and distribute make them a potential target for lawsuits, putting both the business’s assets and reputation at risk².
2. What does it cover? Cannabis Workers Compensation can cover a variety of risks. Some common types of coverage include General Liability Insurance (covering basic risks like customer injuries, property damage, and lawsuits), Product Liability Insurance (protection if someone gets sick or injured from your products), and Property Insurance (covering your building, crop, inventory, and equipment in case of fire, theft, or other disasters).
3. State-specific requirements: The specific insurance requirements for cannabis businesses can vary by state. For example, some states require certain types of cannabis operations to have general liability coverage up to specified limits. It’s important to consult with an insurance professional or your state’s Department of Insurance and cannabis regulatory body to understand the specific requirements for your business. We can help you out with that.
4. State-specific examples:
   • California: California state law mandates that all cannabis business owners have insurance³. California only recently started providing property insurance to cannabis businesses. Numerous insurance companies and brokers offer insurance plans tailored specifically for the cannabis industry. We can provide a swift quote according to your needs.
   • New York: In New York, cannabis businesses are regulated by the New York State Office of Cannabis Management (OCM). The OCM does not require licensed dispensaries and other cannabis-related businesses to carry cannabis business insurance. However, when submitting an application for a business license, cannabis businesses should include a plan for obtaining liability insurance⁴.
   • New Jersey: In New Jersey, cannabis businesses are regulated by the New Jersey Cannabis Regulatory Commission (CRC). The CRC does not require licensed cannabis businesses to carry cannabis business insurance⁵. However, when submitting an application for a business license, cannabis businesses should include a plan for obtaining liability insurance.

Risks of Working with Cannabis

We have to keep in mind that Cannabis industry workers face specific risks such as:

• Heat-stress injuries from working outside or in greenhouses.
• Cuts and lacerations during plant harvesting.
• Exposure to toxins from fertilizers and pesticides.
• Improper ventilation leading to toxic mold exposure.
• Excessive UV exposure from indoor growing lamps.
• Carbon dioxide inhalation.
• Burns and electrical shocks from malfunctioning or improperly wired equipment.

Benefits of Having Workers’ Compensation Insurance

For any cannabis operation, ensuring coverage for employees injured on the job is crucial. It’s also important that your workers’ comp policy is tailored specifically to your type of operation.

What Does Workers’ Compensation Cover?

Workers’ compensation helps cover costs related to work injuries. This includes:

• Medical Expenses: Covers immediate care such as ambulance rides, hospital stays, medications, surgeries, and ongoing care like rehabilitation.
• Lawsuits Related to Work Injuries: Workers’ comp includes employer liability coverage, protecting against lawsuits from employees claiming injury due to negligence.
• Missed Wages During Recovery: Pays part of the lost wages while the injured employee recovers from a workplace injury or illness.
• Compensation for Fatal Injuries: Provides for funeral expenses and benefits for dependents if an incident is fatal.