As a marijuana business owner you need to take the proper measures to ensure workplace safety. However, accidents occur even in the safest workplaces. To be prepared for employee accidents, as an employer you must have workers compensation as part of your marijuana business insurance program.
Workers compensation insurance provides benefits to workers who are injured on the job in the workplace premises or away from the workplace on the course and scope of performing their duties. Injured workers will receive medical treatment and disability benefits if they are off the job due to their injury. The insurance will also provide you important legal protections as well.
It's important for you to understand what is covered by your marijuana business’ workers compensation insurance policy. Each state has varying statutes regarding workers' compensation and each state determines what injuries are covered and to what extent. They also determine how much coverage employers should purchase. If your marijuana business expands to other states you must consider the different rules of each state that you will operate in.
Workers who are injured receive the necessary medical treatment. There are several guidelines that outline what treatments and diagnostic tests are considered as necessary. Benefits for income replacement are based on whether the employee's disability is temporary or permanent. Although some states allow the benefits to be paid for the entire length of the disability, some place limits on the amount of time that benefits can last.
You might wonder if it is required for you to carry workers compensation coverage or not. In most cases, unless employees are paid on commission or they are company partners, you will need to purchase workers compensation coverage.
There are many factors that play a part in your workers compensation insurance rate. The following factors will influence your marijuana workers compensation rate:
Application of the Experience MOD factor in the ratemaking formula will either result in a premium that is lower (a debit) or a premium that is higher (a credit).
An Experience MOD greater than 1.0 means your losses are worse than expected and your premium will increase. An Experience MOD less than 1.0 means losses are better than expected, resulting in a premium decrease. For example if you have an experience modification of 1.20 the Experience MOD is multiplied by your gross premium. So, a 1.20 modification factor increases your marijuana business workers compensation insurance rates by 20%.
The Experience MOD is calculated using claim data from the three most recently completed years, excluding the expiring term. To determine your 2014 Experience MOD, payrolls and claims from 2010, 2011 and 2012 will be included. First, each claim incurred (paid plus reserved) value is listed. Your Experience Rating / Modification factor is determined by the following:
Finally, these adjusted claims are compared to the expected losses for the class and size of your business, which determines the Experience MOD assigned to your business.
As you can see there are a few moving parts that come into play and contribute to your marijuana business workers compensation insurance rate.
I specialize in marijuana business insurance, if you’re interested in discussing marijuana business insurance or would like to receive a workers compensation quote for your business please call me at (503)-922-4847 or select “Request a Quote” below.
The articles posted in this blog are intended to provide insight and is not a substitute for consultation with a licensed insurance broker to address your particular risk or circumstance.