Who Needs Employment Practices Liability Insurance?
The cannabis industry is evolving very rapidly, and companies face many challenges-especially regarding issues of employees. Complaints regarding workplace-related problems have now seen an upsurge, so cannabis companies need to be prepared.
Employment Practices Liability Insurance will definitely protect businesses against claims that state that they committed violations of the rights of their employees. Such problems include harassment, discrimination, and cases about wages. Having the right insurance is very important to protect your business and keep complying with changing laws.
In this blog post, we will take you through what EPL insurance is, who requires it, why it’s important, what it covers, and how AlphaRoot can really help you in better risk management.
What Is Employment Practices Liability Insurance?
EPL is business liability insurance that is offered against claims by employees for violation of employee rights at work. With the growing number of employment practice litigation cases, which litigation incidents in this area increase every day, companies of all sizes in the cannabis business industry should carry EPL insurance, as common issues include wrongful termination, discrimination, and harassment, among others, wrongful employment practices.
Whether it has one employee or a hundred, cannabis companies face particular challenges regarding this. Misconceptions and legal offenses may occur, intentionally or otherwise. EPL insurance will protect businesses from financial loss from such claims, giving businesses a chance to grow and comply further.
Employers
In the current legal landscape, EPL insurance is a recommended coverage for companies with any number of employees.
Manufacturing
It’s common for this industry to face more employment-related lawsuits than other markets.
Dispensaries
Employees come and go in the retail world, leaving room for plenty of lawsuits.
Who Needs Employment Practices Liability Insurance?
EPL insurance is one of the most critical covers for any firm with employees, particularly in the cannabis industry. Since the lawful landscape surrounding employment practices is constantly evolving, cannabis firms must be prepared to face potential litigation.
Knowing who needs the coverage will shield your business from expensive legal battles.
Employers
EPL insurance is something an employer of any size needs to look at. Risks within today’s legal environment involving employment practices are extremely high; in this regard, coverage borders on being an investment for any business that has employees.
Manufacturing
The cannabis manufacturing industry is vulnerable to employment-related lawsuits since the characteristics of the business and its turnovers make it even more susceptible than others. Manufacturing companies are likely to face even more lawsuits from other types of industries. As such, it is prudent for these firms to have EPL insurance coverage, which can protect them from such lawsuits.
Dispensaries
Cannabis dispensaries also face serious issues of high employee turnover, which comes with even more chances of lawsuits and conflicts. As new employees come and go from the workplace, the risk of claims associated with employee-related issues keeps EPL coverage at the top of their list of concerns in managing risk.
Why Do You Need Employment Practices Liability Insurance?
Protect From Costly Defense Fees
The legal defense cost is very pricey, and one claim alone can blood-dry a company. EPL insurance assists in helping to spread the cost of defending your business when it needs it without having the crippling financial harms that come with it.
Manage Unavoidable Risks of Having Employees
Employees are associated with several inherent risks, including misunderstandings and quarrels. EPL insurance is there to give businesses a safety net so as to effectively minimize unavoidable risks.
Protects Against Settlement Trends
Settlement amounts continue to increase higher for work-related claims, and employment practice liability insurance can minimize the financial impacts created by such settlements. This coverage ensures that businesses are capable of absorbing unnecessary costs and not harming the financial stability of the firm.
What Is Covered Under Employment Practices Liability Insurance?
Employment Practices Liability (EPL) insurance essentially covers the financial impact caused by a wide spectrum of employment-related claims. Important areas covered under EPL include:
Wrongful Termination
The coverage of EPL includes claims related to wrongful termination, whereby an employee is let go in violation of their employment contract or employment law. For the cannabis industry, this is one area that has to guard against various regulations in dealing with termination practices.
Discrimination
Any type of discrimination may be present where an employee is being treated unfairly based on race, gender, age, or disabilities. EPL insurance covers such allegations and gives businesses respect for their financial health as well as reputation.
Defamation of Character
In the event that an employee reports false statements made against him, which harm his reputation, then EPL can cover costs associated with the resultant litigation. Such a claim could prove to be extremely damaging in this very close-knit cannabis community.
Invasion of Privacy
Under invasion of privacy, EPL also covers claims based on unreasonable searching into their private spaces or surveillance in areas wherein the employees were expecting privacy.
Sexual Misconduct
Claims involving sexual misconduct, including sexual propositions or sexually offensive comments, are also covered by EPL insurance. This type of misconduct is equally devastating and has the potential to create a hazardous or disrespectful work environment, and you should just as strongly defend your business against these serious allegations.
Case Studies On Claims For Employment Practices Liability Insurance
Age Discrimination
In one case, a sales representative aged 62 filed an age discrimination claim against a cannabis company, YounGuns, after being terminated on the grounds that he failed to meet sales quotas. The company had not documented performance issues. The case initially filed at $500,000, was settled for $100,000 plus a $15,000 defense cost, which underscores why having EPL coverage is important in managing such claims.
Racial Discrimination
A second category consisted of a group of applicants of Indian origin who claimed to be discriminated against on the grounds of race for being employed purely on account of their ethnicity. Defense and settlement costs for the retail store exceeded $200,000, thereby explaining why EPL insurance would be needed in cases of employment practice risks.
Retaliation
This involved the filing of a lawsuit against a Chief Financial Officer (CFO) after his assistant was let go for sharing information on impending layoffs that are confidential. The assistant alleged that she had faced retaliation and sexual harassment, claiming improper remarks and touching on the part of the CFO. This case cost a company over $150,000 to defend, and therefore, having the EPL coverage to handle such complicated claims proves very effective.
Frequently Asked Questions About Employment Practices Liability Insurance
Any company operating in the cannabis industry with workers needs to maintain some form of EPL insurance against negligence claims or violations of the rights of employees.
Consider a vendor who has experience in the cannabis industry, has good options for complete coverage, and has a good reputation for claims handling, as you would in making any insurance provider decision.
EPL insurance costs depend on factors like business size, development stage, risk exposures, a history of claims, and overall business practices. Knowing these variables will help you have a better idea of what coverage you might need.
Why Choose AlphaRoot As The Best Cannabis Insurance Broker?
Whatever the insurance need is, you will want to find the best insurance broker to settle the complex practice liability issues that cross-employment. AlphaRoot is an experienced insurance professional who designs solutions for insurance provisions that cannabis businesses will require to cover the need for protection against employment-related claims. Our team has a good understanding of the challenges within the cannabis industry, and we are more than dedicated to providing you with solutions for managing risk.
You’ll be given the best professional service plus personal guidance while you’re making proper insurance coverage decisions for your company at AlphaRoot. Do not let your business remain a target; call us today for a complimentary consultation and quote especially designed to meet your needs.
Industry Expertise
AlphaRoot specializes in the cannabis business and offers insurance policies that are fit for the requirements of the industry. Based on knowledge of the multiple risks and challenges cannabis businesses face, AlphaRoot is dedicated to securing comprehensive coverage under the stipulations of the various regulations in the industry.
Commitment to Client Success:
AlphaRoot not only offers insurance services but also provides customized plans that may comprise risk audits and can offer continued assistance for better success of the cannabis business in today’s competitive and highly regulated scenario. In this connection, the emphasis of AlphaRoot on clients’ success is the perfect winning formula for good, long-term partnerships and proper risk management.
