In Florida, most businesses with four or more employees must carry a workers’ compensation policy. Click on the links below to jump to that section, or scroll down for everything you need to know about buying work comp insurance in the sunshine state.
Workers’ compensation provides legal protection to employees when they suffer injury or illness as a result of their job. When a claim is submitted, workers’ compensation ensures that the employee’s medical treatment or rehabilitation is paid. If the employee is unable to work, temporarily or permanently, workers’ comp may also dictate the percentage of lost wages the employee receives.
Workers’ compensation protections in the U.S. date back to the early 20th century, but specific work comp legislation and requirements differ by state.
The Florida workers’ compensation system has been heavily debated over the past several years, as lawmakers and work comp regulators have sought to control insurance costs.
In Florida, workers’ compensation laws apply only to businesses with four or more employees. Very small businesses may be exempt from the state’s workers’ compensation laws, and injured employees would need to seek damages for medical care or lost wages through another avenue.
Workers’ compensation insurance, also often referred to as workers’ compensation, workers’ comp, or work comp, is a commercial insurance policy that covers the expenses mentioned in the previous section. By purchasing a policy, an employer files an insurance claim when a worker is injured, and the carrier compensates the employee for medical bills and lost wages. The policy would also pay the employer’s legal fees, if the employee sued for additional damages.
Businesses must carry workers' compensation insurance if they have four or more employees. This includes part-time, full-time, sole proprietors, corporate officers and Limited Liability Company (LLC) members.
There are some industry-specific exceptions to this rule:
If your business needs a workers’ compensation policy, follow these simple steps to get covered.
1. Determine which employees need to be covered, according to state law.
2. Calculate your payroll. The insurance policy premium will be based on the payroll of employees covered by the policy; add up the total payroll of employees that need coverage.
3. Contact an insurance agency or carrier to request a quote. The insurer must be licensed to write workers’ compensation in Florida.
When you request a quote, you'll need to know: the business Employer Identification Number (EIN) number; number of employees and payroll amount(s); business locations and their addresses.
4. Submit your business details to the insurer. Many traditional insurance agencies and carriers require a phone call or in-person appointment to submit information and discuss any follow-up questions.
Newer agencies are using technology to bind small business workers’ compensation insurance online and on your schedule. Emerging insuretech tools are making every step in the process easier and faster: from getting a quote and a certificate of insurance, to making a payment or submitting a claim.
5. Answer follow-up questions. The insurance rep may ask additional questions about employees, like if they travel for work or routinely work from home. From there, the business will be assigned a Classification Codes. These numeric codes are used nationwide to categorize employees, and knowing them will make it easier to renew or shop for insurance in the future.
6. Wait to receive your quote. Insurance underwriters determine whether the carrier can cover your business, and how much the premium will cost.
7. Review your quote and submit payment to bind. Some insurance companies may not bind coverage until you have made the first payment, while others will issue a policy and send an invoice for payment in the mail. Be sure you understand your payment options when reviewing your quote.
Florida has a private market, which allows businesses to purchase a workers' compensation policy from any insurance carrier, broker or agency that is licensed to write in the state.
Another option is to contract with an employee leasing company or professional employer organization (PEO). These companies become the legal employer of your workers and provide work comp coverage, in exchange for a fee. Commercial self-insurance funds are also available, and allow members to share liability for workers’ compensation insurance.
The Florida Workers’ Compensation Joint Underwriting Association administers the state fund, which can write policies that have been declined by private insurance companies.
A work comp quote will typically include these details:
By default, workers’ compensation coverage only applies within the state where it is issued. However, Florida does have reciprocity with several other states for temporary out-of-state work. In addition, many insurance companies will issue their policies with an All States Endorsement. This endorsement allows coverage to apply in any non-monopolistic state for temporary work or business-related travel.
While Florida insurance costs spiked in 2016, more recently work comp rates have decreased. Fewer workplace injuries and increased use of automation brought down work comp costs, and rates were adjusted accordingly in late 2017.
Florida is a base rate state, which means the initial insurance rates are mandated by the state. It uses NCCI (National Council on Compensation Insurance) to recommend base rates for each Class Code. The base rate is multiplied by company payroll. An Experience Modifier and other discounts may also be applied to calculate the final premium:
(Base Rate x Payroll x Experience Modifier) +/- Credits/Debits = Premium
For every $100,000 in payroll, the average workers’ compensation policy can range from a few hundred dollars to a few thousand dollars annually, based on payroll, industry and claims history. In general, physically demanding or accident-prone jobs have higher rates than office jobs.
Florida workers’ compensation rates are relatively low compared to national averages. According to a 2018 study by the Oregon Department of Consumer and Business Services, Florida businesses pay $1.50 to $1.99 per $100 in payroll. This means that a policy for a business with $100,000 in payroll could cost less than $200 per month.
The most effective way to keep costs low is to maintain a safe workplace and avoid claims. You could also ask about discounts when evaluating your quote. Consider asking your insurance agent about:
For more ideas, read 12 Ways to Save Money on Small Business Insurance.
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