3 Things Employers Need to Know about Workers' Compensation Insurance in Florida

Workers’ Compensation Insurance provides medical benefits and wage replacement for employees who are injured while performing normal job duties in exchange for relinquishment of the employee’s right to sue the employer for the injury.  The majority of States in the U.S. require employers to have a workers’ comp insurance policy, with very few exceptions. Individual states monitor and regulate workers’ comp so there are no standard laws. Failure to meet your state’s workers’ comp requirements can lead to fines, lawsuits, and in extreme cases, jail time. To help avoid those consequences here are 3 things you should know about Florida workers’ compensation.  

1. Who needs coverage in Florida and how do I get it?

Now you may be asking who needs to be covered by workers’ compensation insurance. The answer depends on what type of business you have and the number of employees you have. There is a very fine line between construction and non-construction businesses according to workers’ comp laws. All construction businesses have to cover all employees; however, if you have a non-construction business you are only required to have workers’ comp insurance if you have 4 or more employees. Companies in the agriculture industry have to carry coverage if they have 6+ employees. Any questions about what type of company you have can be answered by a local insurance agent. The next question you may be considering is, how do I find workers’ compensation coverage?  The two main places to get insurance is a commercial insurance agency or a payroll provider, including PEO’s and Employee Leasing.

2. Are there exemptions?

The main thing to keep in mind with exemptions is who can be excluded from coverage. The only people exempt from coverage are business owners and they have to file for the exemption. Employees are never allowed to be exempt. A non-construction corporation or LLC can exempt all of their officers and members; however, a construction corporation or LLC can only exempt up to 3 officers and those officers have to own at least 10% of the company. All officers, members, sole proprietors, and partners can elect to be covered by workers’ comp coverage. 

3. What’s considered an accident?

In order for workers’ compensation to be used there must be an accident while doing a job assignment. What constitutes as an accident? The Florida laws say that an eligible workers’ comp accident is an unexpected or unusual event that happens suddenly. An accident can also include injury or disease caused by exposure to a toxic substance and being subject to the acceleration of death or a preexisting issue. If an employee is hurt while under the influence of drugs or alcohol then it is not considered an injury eligible for worker’s compensation. 

Additional Tip: Rates vs. Estimated Premium

When getting quoted workers’ compensation, the main thing to consider is the rate in which you are paying. With a traditional workers’ comp policy, you are quoted based of payroll estimates for the annual policy period, and then you pay based off the estimate. When the annual policy period is over, you will then go through a Workers’ Compensation Audit (Not as scary as it sounds). The audit will determine if are overpaid or underpaid. If overpaid you will get a refund from the insurance company, if you are under paid you will owe the insurance company. With a pay-as-you-go workers’ comp policy, you are paying your insurance based on the actual payroll, using the quoted rate. So, to compare traditional and pay-as-you-go, you can just compare the rates from both quotes.

See the current FL rates by class code HERE 

•    http://www.entrepreneur.com/encyclopedia/workers-compensation-insurance
•    http://www.myfloridacfo.com/division/wc/Employer/coverage.htm
•    http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0440/0440ContentsIndex.html&StatuteYear=2015&Title=-%3E2015-%3EChapter%20440