Posts

Employer’s Protection Liability and Sexual Harassment

The rise of the #MeToo movement and women fighting back against sexual harassment is having a direct impact on American businesses large and small. The largest visible impact can be seen in Hollywood and in the entertainment industry. Less visible is the impact the movement is having on small businesses including cannabis related businesses. Employer’s protection liability becomes more necessary as these issues continue to arise.

Small and midsize businesses like those found in the world of cannabis are not immune to claims of sexual harassment and discrimination. A study by Source Media found that women at companies that employ fewer than 100 people are more likely to say that sexual harassment is highly prevalent in their industry than those at larger firms. This translates directly to cannabis related business and employers as many of these business are in the start up stage and often start with less than 100 employees. Harassment claims are not going away and instead are increasing, which could represent substantial financial losses for your business, especially if you are a small startup. The average discrimination claim among small or midsize businesses is more than $100,000, with some resulting in damages more than $500,000. Employer’s protection liability insurance policies generally cover claims made by workers who sue your business for violating their legal rights. Examples include sexual harassment, wrongful termination and retaliation.

S2S Insurance, Eric Rahn, cannabis business, cannabis insurance, marijuana insurance, employer's protection liabilityAccording to the U.S. Equal Employment Opportunity Commission, you should start by telling the person who is doing the harassment to stop — if you feel comfortable doing so. If you don’t feel comfortable doing so, or if the behavior continues despite your efforts, there are some key steps to take.

According to the EEOC, sexual harassment is a form of sex discrimination. Under the Civil Rights Act of 1964, you have the legal right to be protected from discrimination in the workplace if your company has 15 or more employees. State laws or employer policies might also offer additional protections.

Check to see if your company has an anti-harassment policy. It may be on the employer’s web site or in their employee handbook, or you can get it from human resources.

s2s insurance, cannabis sexual harassment, dispensary insurance, marijuana testing lab insuranceWhen making the decision to invest in a cannabis related business one of the first questions all potential investors, entrepreneurs, and business owners should be asking is what are the risks? At S2S Insurance we specialize in helping you evaluate those risks and protect your investment based on the various levels of exposure found in the risk assessment. Eric Rahn of S2S Insurance states, “Cannabis insurance is becoming a very specialized niche in the insurance industry. Not all insurance agents/brokers have the knowledge about the risks in the cannabis industry.” At S2S Insurance we recognize the growing risk associated with sexual harassment in the work place and would review employer’s protection policies with all of our clients based on the size and make up of their cannabis related business. An employer’s protection liability policy is a good form of risk mitigation, but it should be understood that policy limits apply and all policies should be reviewed by the business owner, a qualified S2S Insurance agent, and an attorney.

read more at cnbc.com

Cannabis Business Property Insurance Protecting The Bottom Line

Making the decision to invest in a marijuana related business takes a big investment of time, energy and money. Early in the process of making those investments, cannabis business owners need to ask themselves how do they plan on protecting those investments. One measure of protection begins with business property insurance. Whether you own a marijuana dispensary, a cannabis testing lab, or grow operation, business property insurance can protect the items and space you need to keep your business running.

S2S Insurance, cannabis business property insurance, marijuana dispensary insurance, weed insurance

Marijuana related businesses face unique challenges and risks because of the products being sold and their relationship with the retail market. Marijuana related business owners are at serious risk of vandalism. Someone could try to break into a dispensary or a lab and could damage or destroy computers, monitors, display cases, storage areas, merchandise and more. There is also the risk of theft of those same items. A cannabis lab which may have expensive high end equipment would especially want coverage for stolen computers or tablets. A dispensary is going to want coverage for stolen marijuana, edibles, or other marijuana related items that might be found in a dispensary. Aside from vandals and thieves there are also natural disasters. Every year across the country there are news reports of terrible storms and devastating fires that cost property owners billions of dollars. We can’t predict when and where a storm or fire is going to strike, but as a cannabis business owners, there is no reason to not be prepared.

The Carr wildfire in California has likely caused an estimated $1.5 billion in insured losses to date, foreshadowing another major wildfire loss event for insurers in the state, according to a report by Moody’s Investors Service Inc.

The wildfire has ravaged parts of Shasta County in or near Redding in Northern California, caused six deaths, and left substantial property damage to date, according to the property/casualty sector report published by the New York-based ratings firm on Thursday. The fire has destroyed 1,555 homes and commercial structures, damaged an additional 240 homes and structures, and burned about 121,000 acres so far, according to the California Department of Forestry and Fire Protection.

s2s insurance, recreational marijuana, insurance for cannabis, liability insurance for marijuana

At S2S Insurance we work with each client individually to identify their risk management needs and set up a plan that makes sense for each individual cannabis business owner. For cannabis business owners we look at location of the business, demographics, crime data statistics, annual weather patterns and additional data which help to formulate a sensible plan for your business. As a cannabis business owner, you don’t want to be caught unprepared when a big storm hits, or when a wildfire breaks out. You as a business owner have no control over if someone wants to break in your windows and vandalize your place of business. We can’t control the unknown but we can prepare for all of those things providing peace of mind and a tangible way to recover when disaster strikes. All policies are subject to policy limits and should be reviewed with an experienced agent and your attorney.

read more at businessinsurance.com

Cannabis Product Liability Can Save Your Cannabis Related Business

Marijuana advocates have been championing the benefits of cannabis for decades. As cannabis and marijuana related products come more into the mainstream, greater attention is being paid to the effects these products have on people. Prior to legalization if a person smoked a bad strain of weed, they would find a new dealer or take a long break before going back to the same person that provided the bad weed. There was little if any recourse if the product purchased on the street had unwanted effects. Now that states have taken the initiative to legalize marijuana in various formats across the country new remedies have been made available to those negatively impacted by the products they now purchase legally.

S2S Insurance, product liability insurance, cannabis business insurance, weed industry, medical marijuana

Cannabis product liability insurance could be the difference between saving your cannabis related business or having to close your doors. As a business owner, you can be sued by others for any damage resulting from the negligence of your business products that cause harm to others such as a defective product. This is a far cry from the days of just finding a new dealer. Product liability insurance pays for your damages and legal expenses if you are sued, and will also pay for medical fees of others who are harmed by your business.

Drug recalls do not happen often, but they do happen. These are a few of the worst:

Baycol – After four years on the market this drug, prescribed to patients with high cholesterol, was recalled by Bayer, its manufacturer. The drug reportedly caused more than 100,000 deaths and was connected to a muscle disorder that caused the kidneys to clog with protein from dying or dead muscle tissue. Vioxx – Manufactured by Merck, the recall of this arthritis pain reliever was one of the largest prescription recalls in history. As many as 140,000 people suffered from heart attacks or strokes after taking this drug. Bextra – Created to treat arthritis and other inflammation in the body, this drug was recalled by Pfizer after it was on the market for one year. It was associated with an increased risk of heart attack and stroke in some patients and was also found to cause a fatal skin condition.

S2S Insurance, product recall, product liability insurance, cannabis business insurance, marijuana crop insurance

The financial impact of a cannabis product liability suit reaches beyond damages and medical bills. This type of scenario can lead to a product recall, product inventory may have to be removed from shelves, and all of this comes at the expense of the cannabis business owner. Anytime there is conversation about damages and liability, there must be a conversation about attorneys and legal fees. While every business owner works to avoid these situations, they do occur and they can be very costly. Many if not all of these expenses and costs can be covered by a cannabis product liability insurance policy, but understand that policy limits do apply. It is important to review your policy with an experienced insurance agent and your attorney. Contact S2S Insurance today to review your risk management options.

read more at blogs.lawyers.com

Cannabis Insurance: Directors and Officers Liability Insurance

Both the adult-use and medical marijuana industries are growing at an incredible pace. The massive push to normalize the consumption of marijuana, whether it is patients viewing cannabis as just another form of medication or adults seeing marijuana like alcohol, will eventually make the legal cannabis industry as mainstream as any other business industry. Bearing that in mind, cannabis businesses need to understand how to manage their risks appropriately. The risks inherent to the cannabis industry are the specialty of S2S Insurance Specialists. Financial risks for a company starts at the top, hence the creation of Directors and Officers Liability Insurance.

s2s insurance specialists, Directors and Officers Liability Insurance for cannabis businesses, marijuana insurance

If you are taking outside investor funds from private equity sources, venture capital or friends and family, you need D&O Insurance. Directors and officers bear the most risks associated with owning a privately held, non-profit or publicly traded corporation. As the owner, director or officer of a cannabis business you may take on roles within the company that require providing professional advice or making difficult decisions. Any owner, director or officer in a management positions may be the focus of potential  litigation.

All  businesses are vulnerable to being sued by shareholders, customers, suppliers, employees or competitors. A recent Towers Watson survey showed that public, private, and non-profit companies all face directors and officers litigation risks. In fact, as the director or officer of a business that handles state legal marijuana, your challenges are more complex with the current State and federal  banking, employment and transportation issues the that the cannabis industry faces..

Cannabis is still a Schedule 1 substance, which means it is listed on the Controlled Substance Act making it as illegal of a substance as exists on the federal level. Despite the fact that 30 states have legalized medical marijuana and nine states have either implemented an adult-use market or are in the process of setting one up, banks remain reluctant to accept funds from a cannabis company forcing cannabis business to operate on a cash-only basis. Working exclusively with cash makes filing taxes, especially with tax code 280E preventing marijuana business owners from writing off normal business expenses, difficult to simply organize expenses and income. Considering these additional challenges, Directors and Officers Liability Insurance for marijuana companies is that much more important. Staying organized is the key to having a successful cannabis business.

Directors and Officers (D&O) liability insurance protects the personal assets of directors, officers and their spouses in the event they are personally sued by employees, vendors, competitors, investors, customers or other parties for acts while managing a company. It covers legal defense fees and settlements, and provides the standard indemnification provisions that hold officers harmless for losses due to their position at the company.

budtender, marijuana business, who insures the marijuana industry, liability insurance for marijuana

Budtender

Some examples of insurable claims in the cannabis industry have resulted from various aspects of the operations. Let’s say a budtender is in the unfortunate circumstance of being on shift during a robbery or a cannabis trimmer hurts themselves due to faulty machinery. The care of cannabis plants during the cultivation process often involves highly sophisticated equipment, especially for indoor grows, and the preparation of cannabis concentrates can create intense fire hazards. The naming of cannabis strains is a sensitive issue as well. There is no standardized method of naming strains and recent lawsuits against the creators of Gorilla Glue and Girl Scout Cookies ended up in favor of the plaintiffs. The cannabis industry involves many financial hazards in all reality, which makes insurance for marijuana all the more important.

cannabis trimmer, cannabis insurance, Directors and Officers Liability insurance for marijuana

Trimmer

A director or officer could be sued for any of the following reasons:

  • Failing at their fiduciary responsibilities
  • Misrepresenting company assets
  • Using company funds inappropriately
  • Misrepresentations by the board of directors
  • Failure of the board of directors to take appropriate actions
  • Infighting between board members and shareholders
  • Not following the laws of the workplace
  • Stealing intellectual property or taking a competitor’s customers
  • Failure meet state and federal requirements
  • Not managing the company properly
  • Fraud

Do not think for a moment that your company has to be generating millions of dollars each year for these financial risks to become a reality. According to a 2016 CHUBB survey, financial losses due to lawsuits for the above reasons ranged anywhere from $387,000 to $17 million. Needless to say, losses such as these would devastate most companies, especially a small cannabis business trying to find footing in this complex space. Unless of course that company has taken on the right sort liability insurance for cannabis.

dispensary insurance, testing lab insurance, who insures the cannabis industry, insurance for marijuana cannabis business, who insures the marijuana industry, liability insurance for marijuana

cannabis employers liability insurance, dispensary insurance, testing lab insurance, cannabis directors and officers

Source: CHUBB

S2S Insurance Specialists provides Director and Officers Liability Insurance for companies  in both Canada and the United States. We cover Canadian cannabis businesses including public Canadian companies that are operating exclusively in Canada or in the United States as well. We also provide policies for private U.S. cannabis companies which includes startups and both emerging and mature companies. We write policies from US$1M to over US$25M+.

D&O Liability Insurance can also cover:

  • Employers Practices Liability – which protects an employer from a lawsuit filed by an employee for a wrongful act
  • Fiduciary/Crime – which covers an employer from a theft by an employee
  • Errors and Omissions – which covers General Counsel costs and other professional advice fees, especially for companies practicing in the medical marijuana space.

Directors and Officers Liability Insurance does not cover marijuana companies for  any illegal acts.

It must be brought up since the cannabis industry is transitioning away from the illicit market. All cannabis companies must be operating with all of the state licenses and permits necessary to operate legally. Missing, not understanding or forgetting to go through the proper measures to receive a valid license from your state will never be excusable. Please take the time to make sure your cannabis business is setup properly with the state or any cannabis insurance coverage could become void.  

Understanding the risks associated with owning a business that directly handles the marijuana plant or an ancillary business connected to the marijuana industry is the business of S2S Insurance Specialists. We are advocates for cannabis, but more importantly we are insurance professionals. Insurance for marijuana companies is essential. We want you to know that you can count on us to not only provide you with proper coverage but also in helping you understand the risks inherent in owning a marijuana company. Those risks start at the top with the directors and officers of a marijuana company. Liabilities exist everywhere in the cannabis industry, whether it is banking or merchant service issues, the Schedule 1 status of cannabis or the normal day-to-day risks of owning any company. Let us help you cover all of your bases and avoid financial setbacks to help you survive and flourish in this new incredible industry where there are no limits for where your company could go.

Contact us at S2S Insurance Insurance Specialist, www.s2sinsure.com  or call 1-954-790-6604 and talk to Eric or David Rahn.

Understanding the Regulatory Risks Associated with Owning a Cannabis Business

As a cannabis business owner, looking over your shoulder may have become an habit. It is the same habit of anyone that participates in the illicit market, however you entered into the cannabis industry because your state has legalized cannabis. The truth is though, that regardless of whether your state has legalized a medical marijuana program or even possibly an adult-use market, cannabis is still illegal. You are not looking over your shoulder to see if local authorities are coming but instead if agencies like the DEA, FBI or in the instance of a brewery in San Francisco, whether the Alcohol and Tobacco Tax and Trade Bureau has shown up.

Black Hammer Brewing, cannabis insurance, who insures the cannabis industry, insurance for cannabisBlack Hammer Brewing out of San Francisco came up with the very smart idea of brewing a beer with cannabidiol or CBD, a cannabinoid found in both the marijuana flower and in hemp. Black Hammer was using hemp derived CBD. It is a non-psychoactive biological compound that is believed to be the main medicinal compound found in the Cannabis sativa plant. It works as an anti-inflammatory as well as having some other medicinal properties. CBD products are offered around the country in many wholesale stores like Lucky Brands. Adult-use cannabis is even legal in California, but that did not stop the federal agency from stepping in and forcing Black Hammer Brewing to stop all production of their CBD beer and offering it for sale to their customers.

Forcing the brewery to stop production of the CBD beer did not even have to do with the Schedule 1 status of cannabis, which is what makes cannabis as illegal of a controlled substance as there is here in the United States. It instead had to do with the fact that Black Hammer had not applied to add either CBD or some of the terpenes they were using in their beer for approval with the Alcohol and Tobacco Tax and Trade Bureau. Since the prohibition of cannabis has been in place here in the U.S. for over 80 years, cannabis and the substances that can be extracted from it are simply not accounted for by regulatory bodies. The owner of Black Hammer Brewing, Jim Furman, believes though that the future of one of his top selling beers depends very much on the federal legalization of hemp.

“We believe that future approval of our formula may be dependent on hemp reclassification by the federal government/DEA,” he wrote in an email. “Our guests love the CBD beers, and we’re pretty sad that we have to stop producing them,” he says. Of the eight CBD beers he has created, Furman considers Hippie Hill, an imperial IPA, to be his greatest success. Brewed with Tahoe OG terpenes, “it’s unmistakable. So fresh,” he says. “It’s got the most dialed-in cannabis flavor profile.”

There is no cannabis insurance that covers the sort of general liability associated with the illegal status of cannabis or the regulatory limitations caused by the extended prohibition of cannabis. However we are interested in spreading awareness on all of the risks associated with owning a cannabis business or incorporating a cannabis product into your inventory. In the cannabis industry, you must account for certain risks that are not common in traditional sectors.

read more at sfchronicle.com