Workers’ Comp Insurance in Florida

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Why Do You Need Workers' Comp?

Workers' compensation laws protect employers and employees in the event of work-related illness, injury, or death. These laws strike a balance that benefits employees and employers. Employees get a guarantee for medical costs, lost wages, and disability compensation. Employers get relief from civil lawsuits for damages and other potential personal and employer liability.

Florida law requires workers’ compensation insurance for nearly every employer in the state. Florida law classifies the specific Workers' Comp Insurance requirement by the type of industry or business. The requirements differ depending on whether it a farm-based business, construction, or another industrial category.

Is Your Business Required to Carry?

Sole proprietors, officers, and shareholders of certain businesses are owners as well as employees. The Workers' comp laws of Florida permit an election of coverage as an individual or as an employee.

  • Construction industry employers with one or more full or part-time employees.
  • Non-construction industry employers with four or more full or part-time employees.
  • Agricultural industry employers with six or more full or part-time employees.

Buying Workers’ Compensation in Florida.

There are four ways to buy worker compensation coverage in Florida. You can self-insure, join a self-insured group, buy a policy in the open market from a private insurance company, and get coverage through the Florida Workers' Compensation Joint Underwriters Association(FWCJUA).

Instructions for Buying WC Coverage.

For most employers, the easiest way to get covered is to work with a licensed agent or insurance broker. The professionals can provide information and market research to reveal the best coverage options and lowest prices. Many people prefer brokers that represent many sources rather than agents that may have access to a complete line of products from a single source.

Those that cannot qualify for private coverage can apply for self-insurance or apply to a self-insurance group. Self-insurance requires state review and approval.

The insurer of last resort is the Florida Workers' Compensation Joint Underwriters Association(FWCJUA). Employers will get coverage at above market rates depending on their industry class and the types of occupations that they use.

What You Should Know About Workers' Comp in Florida?

Florida uses the National Council for Compensation Insurance ( NCCI) to set occupational classification for risks. The rates charged on your policy come from the NCCI code for each worker and the employer’s specific history. The employer’s record of injuries and illness in the course of employment is its modified history or Mod.

Where to Buy Workers' Comp Insurance

Open Market

Employers can purchase insurance on the open market using licenses agents, brokers, or by direct action with the insurance providers.

Self-insurance

Applicants must show financial resources sufficient to cover their liability risks. They must provide audited financial information and present a plan that includes an acceptable claims processing function.

Group Self-insurance

Applicants must show the financial capacity to pay their portion of the pool risks. The Department of insurance must approve group plans and employer participants.

Government Backed Insurer of last resort

The Florida Workers' Compensation Joint Underwriters Association(FWCJUA) provides coverage at above market rates for employers that cannot qualify for private or group coverage. The FWCJUA uses a three-tier system to assign risks rating and the minimum policy premiums.

How Much Does Workers' Comp Insurance Cost?

The insurance provider sets the cost of insurance based on the number and types of employee classes in the employer’s workforce. The NCCI sets the basic rate for each class in the state of Florida. Insurers add by underwriting the applicant and determine risks based on the employer’s specific history of injuries, illnesses, accidents, and fatalities.

In self-insured group policies, the administration treats all risks as a group liability. Employer policies must pay a share of the pooled risk. If the pool were ever insufficient, then member would have to cover the shortfall.

The Cost of Not Getting Workers' Comp Insurance

The state can take civil action to fine and penalize uninsured employers. The state can obtain a stop-work order which shuts down an employer until it complies with the requirements and pays the penalty. The penalty can be as high as twice the amount that would have been paid in annual premiums during the two-year window preceding the action date.

The state can use stop orders and penalties when employers seek to evade the intent of the worker’s comp statutes. The obligation to pay premiums falls exclusively on the employer, and the employer cannot compel the employee to pay any part of it. Stop orders can issue for the below-listed actions.

  • an employer understates or conceals payroll
  • an employer misrepresents or conceals employee duties
  • an employer otherwise attempts to avoid paying the proper amount of premium when purchasing a workers comp policy

Places You Can get Workers' Comp or More Info

  • FWCJUA

    P.O. Box 48957
    Sarasota, FL 34230-5957
    Telephone : 1-941-378-7400
    Fax : 1-941-378-7406
    https://www.fwcjua.com/

  • Disputes over Workers' Compensation insurance premiums would be under the authority of:

    Department of Financial Services
    200 E. Gaines Street
    Tallahassee, FL 32399
    800-342-2762

  • Workers' Compensation claims matters are the jurisdiction of:

    Division of Workers’ Compensation
    2012 Capitol Circle
    SE Hartman Building
    Tallahassee, Florida 32399-0680
    850-921-6966

Factors that Impact Coverage

  • 1

    Legal issues

    Out of State employers must either obtain insurance for Florida or qualify for a reciprocal exemption that allows them to use their home state coverage on a temporary basis.

  • 2

    Liability

    Prime contractors are responsible for uncovered employees of their subcontractors. Prime contractors must ensure that sub-contractors cover their employees; if they do not, then the prime contractor will be legally responsible.

  • 3

    Rates

    The National Council on Compensation Insurance is the official agency for setting worker compensation insurance rates. It uses actuarial data to establish a baseline rate by occupational classification.

    Insurers then build specific additional charges based on the employers modified experience, finances, and other risk factors.

    In the latest year for which information is available, Florida had an average overall employee rate of $1.74 per $100 in earned wages.

    Rates depend on the occupational classification of the employees in the workforce. Insurance rates follow a formula based on risk assigned to various occupations. For example, a buzzsaw operator would have higher risk code than a library aide.

Helpful Tips

Florida law excludes trucking industry employees that are owner-operators of trucking companies from workers’ compensation insurance requirements.

Conclusion

Depending on the industry class, employers with one or more employee must get workers comp insurance coverage or provide it in an approved self-insurance plan. Florida law provides penalties for uninsured employers including out-of-state employers that must satisfy Florida law either by meeting local rules or getting a qualified exception to use their home state coverage. Prime contractors have ultimate responsibility for all employees including those employed through subcontractors.

Sources:

  • Government State of Florida, Division of Workers' Compensation
  • DWC Information Brochure