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Amazon’s Cannabis Restrictions Lift, Leaving DPSs with Increased Liability

By Brian Jungeberg, Vice President, Transportation


Amazon’s Cannabis Restrictions Lift, Leaving DPSs with Increased Liability

After struggling to find effective incentives to recruit delivery drivers for Amazon Delivery Service Providers (DSPs), the e-tail giant has given them the green light to waive cannabis testing and widely advertise that applicants won’t be screened for marijuana use. This deepens the applicant pool during a serious driver shortage and offers employees the freedom to partake in recreational use while working steadily.

While this may come across as a progressive, forward-thinking move to both normalize recreational cannabis use and bolster driver recruitment DSPs should think hard about and look closer at the potential risks and liabilities involved.

It’s on You, Not Amazon

Amazon has been under the spotlight regarding employment practices for quite some time, but its delivery system is set up to let the DSP be the shield against liabilities related to driver negligence. The drivers, their equipment, and the van may be draped in the Amazon logo, but the contracted third-party is the one paying.

DSPs operate on thin margins, meaning they are likely unable to afford levels of catastrophic liability insurance that may protect them from being financially destroyed by lawsuits. The transportation insurance market has continued to harden in recent years, driving premiums higher and certain coverage levels further out of reach for small DSPs.

Lack of Legalization Increases Exposures

While DSPs are required to carry auto liability insurance, waiving cannabis screening restrictions still directly exposes DSPs to potential lawsuits that auto liability insurance would not cover. Only 18 states have such regulations, with more than half of states hovering somewhere between decriminalization and complete illegality. Without a national cannabis legalization allowing recreational use, .  the issue becomes a risk and liability grey area for the DSP.

Amazon’s sweeping decision doesn’t take state-by-state regulations into consideration or acknowledge the difficult situation in which they may be placing DSPs.

Testing and Monitoring Difficulties

While Amazon is certainly not inviting future employees to use cannabis while on the clock, the risk that they will drive under the influence or smoke publicly and break the law is still there. Drivers performing tasks while intoxicated is an enormous liability, but there’s a glaring issue: there’s not yet a national standard for immediate use testing, making it difficult for DSPs to monitor for and control.

By forgoing marijuana screening, DSPs may risk a driver getting behind the wheel while under the influence of cannabis and getting into a grave, and costly, accident. DPSs will have carefully consider whether this risk is worth the reward of attracting more drivers.

Insurance and Carrier Considerations

State-level Departments of Insurance have specific codes pertaining to driving a motor vehicle under the influence, but cannabis or ‘driving while high’ is often not yet mentioned within the codes. This is part of the standards and compliance grey area. Similarly, insurance companies will decline coverage applications based on previous alcohol abuse charges, but many do not have explicit language regarding cannabis use. If DSPs begin to drop marijuana screening and accidents and litigation increases as a result, carriers may respond by increasing rates.

Understanding that they will be left with the bill in the case of a cannabis-related accident, DSPs should go slowly. Risk Strategies’ transportation experts know this road and the journey ahead. Our team is here to help guide you in the right direction to protect your business – get in touch below.

 

Want to learn more?

Find me on LinkedIn, here.

Connect with the Risk Strategies Transportation team at transportation@risk‐strategies.com.

Email me directly at bjungeberg@risk‐strategies.com.


The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.

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