Cannabis Workers Compensation
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
Unsure if you need cannabis workers’ compensation insurance for your business?
All employers, including those in the cannabis industry, are required to protect their workers from job-related injuries and hazards.
If you have employees on the payroll, it’s your responsibility to secure a workers’ comp policy. It’s not just the law—it also ensures your staff is covered in case of an accident.
Is Cannabis a High-Risk Industry?
Finding a workers’ compensation insurance provider for a cannabis business can be challenging.
Many insurers consider the cannabis industry high-risk, while others are hesitant to navigate the legal complexities in each state. The cannabis industry also employs a wide range of workers, including growers, distributors, lab technicians, and retail staff.
Each role comes with its own set of risks. Below are some of the most commonly reported injuries:
Common Workplace Injuries in the Cannabis Industry
Employees in the cannabis industry face various occupational hazards. According to data from Pinnacol Assurance, the five most common injury causes in Colorado’s cannabis industry include:
Strains
Cuts
Falls or slips
Being struck by an object
Striking an object
These injuries often involve body parts such as fingers, hands, lower back, eyes, and knees. Notably, eye injuries are prevalent and can be easily prevented with proper safety measures, such as the use of protective eyewear. The average cost of an eye injury is approximately $2,000
Redvo Workers Comp Brokers: Your Partner in Affordable Cannabis Workers’ Compensation Insurance
At Redvo Workers Comp Brokers, we understand the challenges cannabis businesses face in obtaining affordable workers’ compensation insurance. We specialize in securing low-rate coverage for high-risk industries, including cannabis operations.
What Accidents Does Workers’ Compensation Cover?
Understanding Workers’ Compensation Insurance
Workers’ compensation insurance safeguards businesses when an employee is injured while performing their regular duties at work. To qualify for compensation, the accident must occur during work hours and while the employee is doing their job.
Personal injuries, accidents due to horseplay, or negligence are not eligible for compensation. Additionally, employees cannot claim benefits for illnesses unless they can prove the illness directly resulted from their work.
For example, if a cannabis grower develops cancer due to exposure to pesticides, they may be eligible for workers’ compensation coverage.
This insurance covers various expenses, including medical bills, rehabilitation, disability benefits, lost wages, or even funeral costs in the case of a fatal accident. Payments typically stop once the employee returns to work. However, if the injury prevents them from returning to their job, they may qualify for long-term disability benefits.
Before workers’ compensation, injured employees often sued their employers, which sometimes led to business bankruptcies. Workers’ compensation eliminates the need for lawsuits after a claim is settled, offering both protection for workers and peace of mind for employers.
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How is Workers’ Compensation for Cannabis Employees Calculated?
Cannabis-related jobs are categorized by the National Council on Compensation Insurance (NCCI) under various class codes. Retail dispensaries and delivery services, for example, are typically assigned the class code 8017. This code is essential in determining the annual premiums for workers’ compensation coverage.
The standard formula used by all insurance providers is:
Class Code Rate (X) Employer Payroll (X) Experience Modification Rating (=) Premium
This approach ensures that businesses with higher risk levels pay more for coverage. However, it can also present challenges for small businesses, making it harder for them to afford the necessary insurance.
Additionally, if a business faces coverage gaps, claims losses, or has its policy non-renewed, the premium rates will likely increase over time.
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Does Workers’ Compensation Cover All Cannabis Employees?
Workers’ compensation covers all employees listed on the payroll, whether they are full-time or part-time. The coverage is the same for employees working 10 hours a week or 40 hours a week, and applies to both hourly and salaried workers. Seasonal employees are also included.
However, workers who are not on the payroll are not eligible for workers’ comp benefits. Independent contractors, for example, are not considered employees and will not receive coverage. Freelance cannabis workers should instead obtain liability insurance to protect themselves.
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When Do Workers’ Compensation Benefits Start?
If an employee is injured at work, they should file for workers’ compensation immediately. The coverage will start paying for any medical expenses related to the injury right away, with no waiting period.
Workers don’t need to wait for approval to receive medical benefits, and if the claim is denied, they can appeal the decision.
Temporary disability benefits, however, only begin after the employee misses a full week of work. For example, if they return after five days, they won’t be eligible for disability payments.
Once the employee reaches the eighth day of missed work, the policy becomes retroactive, covering both the previous days and any future missed workdays.
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Find Affordable Cannabis Workers’ Comp Insurance
Operating without workers’ compensation insurance is not only risky, but also illegal in most areas. Unfortunately, many insurance providers are reluctant to work with cannabis-related businesses, and State Fund coverage often comes with steep premiums.
At Redvo Workers Comp Brokers, we eliminate the uncertainty by helping you secure top-quality coverage at a significantly lower rate.
We could be the perfect match for your business if any of the following apply:
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Employ 5 to 500 people
Currently insured through State Fund
Looking to reduce your premiums
Struggling with high deposit costs
Operate in a high-risk industry
Have been non-renewed by your current insurer
Experience gaps in coverage
Facing ongoing losses
Redvo Workers Comp Brokers provides pay-as-you-go plans that can lower your premiums by 30-40%, while also helping you avoid the hassle of an annual audit.
For expert assistance in finding the best cannabis workers’ comp coverage.