The cannabis industry is booming. And so are the jobs that come with it. But whenever there are employees, there is potential for employment suits. Cannabis companies are not immune to this threat and must protect themselves with proper insurance coverage. The US Equal Opportunity Employment Commission reported 61,331 charges in 2021, not including those filed with local employment rights agencies or states.

Despite its benefits, cannabis general liability insurance doesn’t cover the types of business exposures that an Employment Practices Liability Insurance (EPLI) policy covers. EPLI is a stand-alone type of liability insurance that covers wrongful acts committed during the employment process.

How Does EPLI Help?

Among the types of lawsuits protected by EPLI are negligence, wrongful termination, breach of employment contract, sexual harassment, discrimination, and denial of career opportunities. When you have employees, you risk facing claims like those listed above. These events can lead to a company’s permanent closure if you are not protected.

Unfortunately, EPLI violations have recently increased for adult cannabis use companies. Defending discrimination claims can cost as much as $160,000, according to the Equal Employment Opportunity Commission.

In addition, increasing product demand has resulted in cannabis companies hiring more staff as the industry skyrockets. But because of this push, things like HR functions and assessments of team stability are being put on hold. As a result, more cannabis companies are exposed to EPLI claims.

Cannabis companies have always been more prone to EPLI claims than non-cannabis companies due to their high hiring, firing, and layoff rates. Furthermore, states that allow recreational/medicinal cannabis use have more demanding EPLI laws.

An EPLI policy helps you manage risk and protect your cannabis business against employment claims. If you want to know more about protecting your business and yourself from these claims, reach out today.