Berkley Select Discusses Employment Practices Liability for the Cannabis Industry in Podcast Interview
Recently, our Assistant Vice President of Underwriting, Nick Matsie, was featured on the podcast series ‘Insuring Cannabis’, sponsored by Insurance Journal. In this interview, Nick highlights what is currently happening in the EPL space for dispensaries, including claim trends, a softer market and suggested best practices when underwriting for this unique industry.
March 2025
To listen to the full podcast, please click link HERE: https://www.insurancejournal.tv/videos/25023/
Below are some of the Podcasts highlights:
What are some common EPL exposures for cannabis operators?
• Discrimination: Claims based on sex, age, race, etc.
• Wrongful Termination: Allegations of unjust firing.
• Harassment: Includes sexual harassment and hostile work environment.
• Retaliation: Claims of being fired for reporting regulatory violations.
• Wage and Hour Violations: Issues with employee classification, unpaid overtime, and missed breaks.
• Third-Party Coverage: Ensuring policies cover claims from customers or vendors, including ADA compliance.
What are some of the current claim trends in the cannabis industry?
• Claims Data: The data shows real exposures. Common claims include retaliation, sexual harassment, wrongful termination, and discrimination, often due to high turnover among hourly employees.
• Claims Increase: There's an uptick in both claims and payouts, influenced by social and economic inflation. Settlements for nuisance claims are rising.
• Documentation Issues: Lack of proper documentation makes it hard to dismiss claims quickly, leading to higher defense costs and potential bad jury verdicts. In addition, employees are fired for various reasons, but claims often arise from perceived unfair treatment. Proper documentation is crucial to defend against these claims.
• Misclassification: A major issue in dispensaries is often tied to wage and hour claims.
• Exempt vs. Nonexempt: Misclassifying employees as exempt (salaried) without meeting specific criteria can lead to unpaid overtime claims.
• Claims Impact: Misclassification can result in significant legal costs and potential class action suits, especially for larger organizations.
What is some advice you have for brokers when insuring cannabis?
• Understand the Industry: Know the regulatory environment and challenges specific to cannabis businesses.
• Educate Clients: Explain common EPL exposures and the importance of EPL insurance, including data on payouts.
• HR Risk Management Services: Highlight the value of services included with EPL policies, such as HR handbooks and hotlines.
• Tailor Coverage: Customize policies based on the specific needs of each dispensary, ensuring no critical exclusions.
• Stay Updated: Keep abreast of evolving employment laws and regulations.
• Use Specialists: When in doubt, consult with experts or wholesale markets to access the best coverage options.
What are some other Berkley Select resources the company offers for EPL insureds?
• Zywave: Our Risk Management partnership with Zywave is an added value to all of our EPL insureds. Zywave provides HR resources & pre-claims assistance including an HR Hotline, compliance training including state mandated harassment trainings. and other robust resources for business owners ensuring everyday compliance and best practices.
• In house claims team: Our claims team works in house with our underwriting team, most of whom are licensed attorneys.
Disclaimer:
Berkley Select is a member company of W. R. Berkley Corporation, a Fortune 500 Company. The views expressed here are those of the author and do not necessarily represent the views of Berkley Select or W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued.