If you own a business in Florida and have four or more employees (outside of the construction and farming industries, which have unique requirements), you must provide workers’ compensation insurance. This insurance will prevent you from paying out of pocket for expenses resulting from an employee injury. Without it, you’d be liable for medical costs and missed wages should an accident occur—plus, you’d face the consequences of breaking state law.

In Florida, the Division of Workers’ Compensation provides assistance and education regarding the state’s workers’ comp system. Their website offers valuable resources that explain coverage requirements and options, exemptions, proof of coverage, and more.

Private Insurers

Unlike in states with a monopolistic state fund, Florida business owners have the option of purchasing workers’ comp insurance on the voluntary market. In other words, providing workers compensation for Florida companies is a competitive business, and private insurers offer unique benefits and incentives to attract clients. When comparing workers’ comp providers, you may want to consider the following factors:

• Do they offer discounts to companies with formal safety programs?
• What payment plans do they offer?
• What is their annual auditing process?
• Does the policy include employer’s liability?

The Florida Workers’ Compensation Joint Underwriting Association

In 1993, the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA) formed as a “self-funding plan to provide workers compensation and employers liability insurance to employers who are required by law to maintain such insurance and who are in good faith entitled to, but who are unable to purchase insurance through the voluntary market.”

To qualify for FWCJUA coverage, an employer must have applied for and been rejected by at least two private insurance companies on the voluntary market. If you’ve received a “reasonable” offer from an insurance company, you are not eligible for FWCJUA coverage.

Self-insurance

Under certain circumstances, the state of Florida allows employers to self-insure their workers. If an employee at a self-insured company suffers a workplace injury, the employers must pay for workers’ comp claims out of pocket. To qualify as a private self-insured employer, the business owner must prove to the state that they have the financial means to cover any future claims.

Understanding Exemptions

Specific types of employees may qualify for a workers’ comp exemption, meaning they won’t be covered by the company’s workers’ comp policy. For an exemption, you must submit a Notice of Election to be Exempt application to the Florida Division of Workers’ Compensation, including the exemption applicant’s signature.

In Florida, an officer of a corporation or a 10 percent or higher LLC owner, outside of the construction industry, can apply for an exemption, but no more than 10 LLC members can be exempt. Within the construction industry, the requirements vary slightly.

Assessing Insurance Rates

Now that you understand your options for workers’ compensation coverage, you can start researching providers, collecting quotes, and comparing policies and rates. Your industry’s classification code, the size of your payroll, and your workers’ comp claim history play the most significant roles in determining how much coverage will cost. In general, insurance providers use the following formula to calculate premiums:

Your classification code rate x Your experience modification number x (Your total payroll/$100)

In other words, insurers take into consideration the level of injury risks associated with your industry, the total amount you spend on employee wages, and your company’s history of workers’ comp injuries.

Keep in mind that your company’s classification code will determine the minimum premium requirement for your policy. Florida uses the industry codes established by the National Council on Compensation Insurance.

Complete Coverage

With a better understanding of Florida’s workers’ compensation system, you can explore your options, compare rates, and find the best-fit policy for your business. Through your insurance plan, you’ll be able to cover emergency medical expenses, ongoing care costs, missed wages, disability, and funeral expenses in the case of a workplace injury or fatality.

With proper workers’ comp protection, thorough employee training, and strict enforcement of workplace safety requirements, you can rest assured that you’re doing everything you can to keep your employees safe and cared for should an accident occur.