Marijuana liability

Pot’s Legalization Will Test Liability Standards

By: | March 3, 2014 • 3 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Marijuana’s legalization will require a risk management response for a range of liability-related issues, from workers’ compensation defense to commercial general liability policy exclusions.

That is becoming clear in Colorado, one of two states that are now experimentation centers for how the nation — and the insurance industry along with it — will adapt to legalized pot.


With the Risk and Insurance Management Society soon headed to Denver for its annual conference, there is a lot of joking across the property/casualty industry about the legal access to marijuana in Colorado.

But by the time conference attendees arrive there they will find their industry is already in the midst of serious consideration over the range of marijuana-related insurance considerations.

Certain Colorado hotels, for instance, want to move into the bourgeoning marijuana tourism business and like other companies they need CGL policies. But some underwriters are looking to exclude “marijuana related activities” from their general liability coverage, said Vance O. Knapp, an attorney at Sherman & Howard L.L.C. in Denver.

Knapp, who represents hotels among other clients, is known for his expertise on marijuana and employer liability, and will be among speakers on the topic at the RIMS conference.

The property/casualty industry already has some expertise in underwriting marijuana business. I recall in 2010 writing about London insurers providing various policies for medical marijuana growers and retailers in California and other states.

But with pot recently legal in Colorado, Washington, and probably more states in the future, laws on related liability issues are just emerging.

One of the most closely watched cases on the topic so far involves Brandon Coats, a Colorado quadriplegic and licensed medical marijuana user fired in 2010 by Dish Network L.L.C. after he tested positive for use of the drug in violation of the employer’s policy.

In an April 2013 ruling, the Colorado Court of Appeals upheld Coats’ firing.

That case is now before Colorado’s Supreme Court.

Colorado’s high court will likely uphold that finding, Knapp says. But if the Supreme Court overturns the lower court ruling it would undermine employers’ zero-tolerance drug policies.

Those policies impact everything from worker safety and workers’ comp claims defense to employers’ third party liability.

Another threat comes from Colorado plaintiff attorneys’ desire for the state’s lawmakers to adopt a law so that employees can only be terminated or disciplined if their employer can show the employee is actually impaired or under the influence.

Impairment is a substantially different standard than testing positive for the drug’s use.

Knapp says there is potential for that issue to appear before Colorado’s legislature in the future because marijuana proponents are “very vocal” and it would be a “cash cow” for plaintiff attorneys bringing unlawful-termination lawsuits.

That too would impact a range of business liability exposures and is just one example of legal issues still to be settled, although some courts have already weighed the difference between being impaired by marijuana and merely testing positive for its presence in the body.

On February 27, for instance, the Supreme Court of Arkansas overturned lower court findings that two men who tested positive for marijuana use after a workplace accident could not pursue workers’ comp claims.


Flames engulfed the men using an acetylene torch to cut the top off a barrel that exploded. Testimony in the case focused on their pot use away from work and whether they appeared intoxicated on the job.

The Supreme Court eventually found that while the two tested positive for marijuana use they showed the accident was not occasioned by that use.

I suspect more states will either legalize marijuana for recreational consumption or adopt medical use laws that essentially make pot semi-legal. As that happens expect to see more courts tackle the extent of employer liability.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]