Do Cannabis Workers need Workers' Compensation Insurance?
Cannabis workers need workers’ compensation insurance in almost every state. This insurance provides benefits to workers who suffer job-related illnesses or injuries.
The cannabis industry is new compared to many other sectors. It also has a set of unique responsibilities and challenges. As this industry moves from the fringes to the mainstream, it’s essential to ensure employees are secure and safe while employed.
In this article, we’ll look at the details of workers’ compensation insurance in the cannabis industry. We’ll dig into the benefits of gaining coverage, the legal requirements, and how workers’ comp can be a safety net for employees as well as employers.
Why do cannabis workers need Workers’ Compensation insurance?
The main reason why employees who work with cannabis need workers comp coverage is to protect them if they get hurt.
Cannabis workers might be involved in the harvesting, cultivation, distribution, and production of cannabis products. This might involve using heavy equipment, being exposed to high-intensity lighting, and the use of chemicals for disease and pest control.
For example, those in cultivation facilities do things similar to people in greenhouse and agricultural operations. This leads to the risk of falls, back injuries from lifting heavy things, and repetitive strain injuries from tasks like trimming plants.
In addition, the production process for cannabis might involve extracting essences and oils, which usually make use of chemicals that can lead to fires or explosions.
Workers in those spaces might be risking burns, inhaling harmful fumes, or other severe injuries. Even when following all safety procedures, accidents can occur, making it important to have appropriate insurance coverage.
How does Workers’ Compensation help injured Cannabis workers?
Workers’ compensation insurance for cannabis workers has a wide variety of benefits that help with protection and recovery of injured workers.
Similar to other jobs, workers’ comp for cannabis employees covers medical costs, wage loss, funeral costs, and long-term care needs.
Medical Costs
Workers in the cannabis industry may be at risk for various injuries, such as equipment-related accidents and chemical exposures.
Workers’ compensation insurance will cover all the medical costs, such as hospital stays, emergency care, follow-up visits with doctors, necessary medications, surgeries, and rehabilitation care. It may also offer travel reimbursement to get to and from medical appointments so the injured worker doesn't need to pay it themselves.
Wage Reimbursement
Next up is wage reimbursement. Because the injured worker cannot go to work and get a paycheck, insurance will pay about two-thirds of the average weekly wage of the employee.
This helps create long-term stability after an accident or injury. For the most severe injuries that lead to permanent or long-term disability, benefits may be adjusted to ensure the worker and their family is supported.
Funeral Costs
While it’s a tragedy, sometimes fatalities occur in the cannabis industry. This is no different from any other industry with potential hazards and physical labor.
Worker’s compensation insurance will handle the funeral and burial costs. It also provides financial support to the deceased’s dependents. This can help prevent an undue burden during an already troubling time.
Long-Term Care
If an injury leads to permanent damage, such as neurological impairments or serious burns, workers’ comp ensures long-term care is provided as needed. This might include things like medical treatments, physical therapy, and adaptations to the lifestyle or home of the injured worker.
By offering these comprehensive benefits, workers’ compensation for cannabis workers helps with the immediate treatment of workers. It also contributes to their recovery and can help maintain their quality of life and economic stability.
How much is Cannabis Workers’ Comp Insurance?
Determining the costs of workers’ compensation insurance in the cannabis industry can be complicated . This comes down to the different state regulations and the varied nature of the industry itself.
The pricing of the policies comes down to several factors, including:
- size of the payroll
- state where the business operates
- specific roles of employees
- risk associated with those roles
Here are some numbers from a leading insurance provider. The premium for cannabis workers, based on an average annual salary of $20,000, is about $177 annually, plus taxes and fees. This provides a rough estimate of what businesses could expect to pay.
Workers’ comp insurance is calculated per $100 of payroll, but the rate varies by state and employee classification. For example, costs differ for workers in cultivation versus processing, distribution, and retail. Riskier positions generally have higher premiums.
Rates range from $396 per year for cannabis cultivation/farming to $56 per year for medical cannabis/marijuana, plus taxes and fees.
Check out our Guide to Cannabis Workers’ Comp Rates for more details.
Tips to Lower Premium Costs
Since the work in cannabis businesses can vary so much and bring with it serious risks, policies can be expensive. Below are a few helpful strategies to reduce cannabis workers’ comp premium costs without cutting coverage amounts.
Provide accurate information
Providing accurate information is crucial when working with an underwriter. This includes correct cannabis classification codes, precise payroll data, and detailed information about job duties. The more accurate you are, the better your chance of getting great rates.
An underwriter decides on risk after looking at all the information you provide, so give them everything you can for the most accurate rate.
Make a formal Safety Program
Implementing safety programs can also be a great way to reduce injuries and insurance costs. For a cannabis company, this might mean training employees to safely use cultivation equipment, follow chemical safety rules, and learn emergency response protocols.
Having a true commitment to safety helps prevent accidents that could lead to claims and will show underwriters that you are doing your part to lower claims frequency and severity.
Have a process to Report Claims
You should have a process to report claims and you should educate all the workers on how it works. When it comes to getting the proper treatment and keeping costs low, speed is important.
By reporting the claims right away, the insurance company will be able to handle the claim more efficiently, which will keep the cost lower and benefit you in the long run.
Get the best Workers’ Compensation Insurance for Cannabis Workers
There are specific risks and complexities to working in the cannabis industry. Since this business is very unique and can vary in legality, not all insurance companies are willing to provide coverage to businesses that work with cannabis.
If you are looking for workers’ comp insurance for a cannabis business, the agents at Kickstand Insurance are here to help you. We provide a streamlined process that can be started in just a few minutes. Get the ball rolling today by starting a free online quote.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
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