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What type of insurance do you need?
Florida’s workers’ compensation law requires all non-construction employers who have four or more employees to purchase workers’ compensation insurance. Construction employers who have one or more employees must purchase workman’s comp coverage.
Agricultural employers who have six regular employees and/or 12 seasonal employees who work more than 30 days during a season, but not more than a total of 45 days in a calendar year, must have workers’ compensation insurance in Florida.
Subcontractors are responsible for providing Florida workers’ compensation for their employees; however, the primary contractor must ensure that a subcontractor has provided the coverage for its workers. If a worker is injured and the subcontractor has not provided Florida workers’ compensation insurance, the contractor must pay the benefits.
In Florida, sole proprietors and partners are excluded from coverage, but they can elect to be covered by their workman’s comp policy. Sole proprietors and partners in the construction industry must be covered.
Corporate officers or members of an LLC are included in Florida workers’ compensation coverage, but they can apply for an exemption for themselves. Corporations or LLCs in the construction industry can have up to three officers opt out of coverage if each owns at least 10% of the business.
Florida workers’ compensation insurance can be purchased from an insurance agent who is licensed to sell workers’ compensation insurance in the state. Employers can self-insure with approval from the state.
If you cannot obtain insurance through the standard workman’s comp market, coverage is available through the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA).
Employers can also join a commercial self-insurance fund where members pool their resources, spread their risk and self-insure as a group.
Florida workers’ compensation insurance covers all accidental injuries and occupational diseases arising out of and in the course and scope of employment, including diseases or infections resulting from such injuries within specified periods of time.
Wage replacement benefits may be reduced if an employee knowingly fails to observe a safety rule or chooses not to wear a safety appliance that the employer has directed the employee to use.
The National Council on Compensation Insurance (NCCI) assigns a risk classification code to every occupation. Each classification code represents employers with similar exposures. The codes are used to classify workers’ compensation rates, based on the loss experience of employers within each code.
In the example below, you can see that masons in Florida use the classification code 5022.
Example: Mason = 5022
Each classification code is assigned a specific dollar amount — or base rate — that is determined by how hazardous the occupation is for workers. The base rate is used to determine an individual employer’s full workers’ compensation premium. Base rates are revised each year. In the example below, we use the base rate of $15.10 for a mason in Florida.
Example: Mason = 15.10%
Calculation: Base Rate % x (Payroll/100)
Step 1: $100,000 Payroll / 100 = 1,000
Step 2: 1,000 X $15.10 (base rate) = 15,100
Estimated workers cost premium: $15,100.00
After you establish a workers’ compensation claims history, experience rating makes a significant difference in what you pay over time. An experience modification factor, or experience mod, is an additional factor that may be applied to your workers’ compensation premium calculation. It increases or decreases your workers’ compensation premium for a given year.
Your mod is a numerical representation of your actual losses compared with expected losses for your industry (plumbers are compared to plumbers, restaurant workers to restaurant workers, etc.).
Employers will receive an experience modification factor when they have:
If your workers’ compensation policy is experience-rated, your premiums are determined by: Base rate x Payroll x Mod
Healthcare $1,825 Per $100,000 payroll
Retail Trade $2,850 Per $100,000 payroll
Construction $7,430 Per $100,000 payroll