What is Workers’ Comp Insurance?

Workers’ compensation insurance provides benefits to an employer’s employees in the event of job-related injury or illness. These benefits can help pay employees for:

• Burial and Funeral Expenses
• Legal Fees and Costs
• Lost Income and/or Wages
• Medical Costs

Who Should Have Workers’ Compensation in Florida?

According to workers’ compensation laws in Florida, businesses which have at least four employees should have workers’ comp coverage. In addition, the industry, business size, and employee type, has no impact on the specific coverage required. In Florida, all construction businesses must have workers’ comp insurance for all employees and/or workers.

Some examples of industries which should have a workers’ comp insurance policy include:

• Construction businesses or companies with at least one employee. One important fact is that corporate officers or limited liability company (LLC) members also count as employees of the business or company.
• Non-construction related businesses or companies having at least four workers and/or employees. All business owners who are corporate officers or members of an LLC are also considered as employees.
• Agricultural businesses or companies who employ six employees or more. Moreover, coverage is also necessary if at least 12 temporary employees work more than 30 days during a season, but less than 45 days during a calendar year.
• Foreign or out-of-state employers who employ workers in Florida, are required to have their workers’ comp insurance policy written by an approved insurance carrier.
• Independent contractors and/or sole proprietors who are contractors are also required to have workman’s comp insurance prior to the start of any project in Florida.

State requirements for workers’ compensation insurance can be found at Florida’s Division of Workers’ Compensation within the Department of Financial Services.

Exemptions for Florida Workers’ Comp Insurance

There are several exemptions for Florida workers’ compensation insurance for businesses and employees who may not require coverage. One exemption applies to sole proprietors and/or partnerships. Sole proprietors and/or partnerships can be exempt from having to get workers’ comp coverage simply by filing for a certificate of election for exemption. Nevertheless, sole proprietors and/or partnerships can still purchase a policy by filing for election of coverage with The Division of Workers’ Compensation.

Additional workers’ compensation exemptions include:

• Corporations which are not in the construction industry, and are registered with the Florida Department of State Division of Corporations. Applying for an exemption from workers’ compensation can be done by an officer of the corporation.
• Limited liability companies not in the construction industry are required to register with the Florida Department of State Division of Corporations.
• An applicant with a minimum 10% ownership of a limited liability company, which has less than 10 exempt members.

For construction industry businesses, exemption eligibility is different for non-construction companies. Construction industry-based corporations and limited liability companies must register with the Florida Department of State Division of Corporations and adhere to the following to be exempt from worker’s comp.

• Only an officer of the corporation or member of a limited liability company with a minimum 10% ownership can apply.
• A maximum of three officers or members can be exempt.
• The exemption application fee is a $50.

Additional information regarding exemptions may be found at Florida’s Division of Workers’ Compensation.

When Does Workers’ Compensation Insurance Coverage Kick In?

Workers’ compensation insurance kicks in and begins covering medical expenses, when workers and/or employees are injured on the job or suffer a work-related illness. Coverage also includes treatment for repetitive stress injuries and continuing physical therapy.

Workers’ compensation coverage also provides compensation for lost wages, where workers require time off from work in order to recover from a work-related illness or injury. Moreover, lost wages coverage also provides for permanent disability in the event that the worker and/or employee is not able to return work. Furthermore, if an employees job-related accident results in the death, the coverage will help pay funeral costs.

Workers’ Compensation Laws in Florida

In Florida, the Division of Workers’ Compensation acts as a safeguard in ensuring that businesses have the available resources for workers’ comp programs. Florida’s Division of Workers’ Compensation provides help for injured workers’, employers, health care providers and insurers adhere to Florida laws. Some of the services that the Division of Workers’ Compensation provide includes:

• Determining whether a business needs workers’ compensation coverage.
• When injured or sick employees can expect to receive benefits.
• What the fees are for workers’ comp attorneys.

What Does Workers’ Comp Insurance Cost in Florida?

In Florida, the cost of workers’ comp insurance is calculated by the following formulas which is based on every $100 of payroll:

• Worker’s Comp Premium = Workers’ Classification Code Rate (x) Experience Modification Number (x) Payroll/$100

The workers’ compensation insurance premium formula above is intended for reference purposes only. Premium calculations completed by an insurance agent may be more complicated. In addition, experience modification numbers are subject to state requirements and may not apply in every policy. States often determine experience modification numbers based on a comparison of your company to companies in your industry. Furthermore, workers’ classification code rates are dependent on the type of work employees perform and are state specific.

In Florida, the employer rates for workers’ compensation in Florida are estimated at $1.24 per $100 covered in payroll. An employer cost for coverage is based on several factors, which includes:

• Claims History
• Coverage limits
• Industry Type and Risk Factors
• Location
• Number of Employees and/or Workers
• Payroll

Penalties For Not Having Workers’ Compensation Insurance in Florida?

In Florida, employers that conduct business without the requisite workers’ comp insurance coverage face the risk of incurring civil penalties. Generally, these penalties include that the business would be subject to a stop-work order from a government agency as well as monetary fines. A stop-work order, requires all business operations to cease until the business complies with the law and pays the assigned penalty. The penalty fee is usually equivalent to twice the insurance premium the employer would have paid for the prior two-years.

In the event that the employer does not comply with a stop-work order, criminal charges may be filed against the employer. In addition, employers may be subject to a stop-work order in certain situations including:

• Where employee and/or worker payroll is concealed or understated.
• The duties of employees are concealed or misrepresented.
• If there is any attempt in avoiding the payment of workers’ compensation insurance premiums.

Death Benefits Under Florida Law for Workers’ Compensation

Under Florida law, workers’ compensation insurance provides death benefits when an employee dies from a work-related accident within one year from the date of the accident or within five years of continuous disability. In certain cases, death benefits may be owed to the survivors of the employee. The deceased employee’s family may be entitled to receive:

• Education benefits to the decedent’s surviving spouse.
• Up to $7,500 in payment for funeral cost and expenses.
• Up to $150,000 in compensation benefits for the decedent’s dependents (paid up to the rate of 66.67% of the decedent’s weekly pay).

Workers’ Comp Insurance Settlements in Florida

There are cases where an employee may try to negotiate for a greater workers’ comp settlement.
If an injured employee chooses to increase a claim for a larger settlement negotiation, the employer should stay involved in that discussion in order to limit liability if a lawsuit arises.

Prior to settling a claim, the insurance company will ask the employee and their attorney to calculate the total amount of anticipated related expenses.

Generally, the insurance company will not simply pay a settlement based on all of these related expense calculations. The insurance company and the employee’s attorney negotiate before reaching a settlement that is amenable to all parties. If the negotiation breaks down and a settlement isn’t reached, there will likely be a hearing or even a lawsuit.

Statute of Limitations On Workers’ Comp Claims

Statutes of limitations provide protection against claims that are filed long after an injury has occurred. Under Florida law, if more than two years has passed since the date of the injury, an employee cannot claim benefits, get medical treatment, or sue for lost wages.

However, there are several exceptions to the two-year statute of limitations. These exceptions may apply if:

• • The injured employee and/or worker is a minor.
  • The injured employee and/or worker is mentally incompetent.
  • The employer misrepresented coverage entitlement to the employee and/or worker.
  • The insurance provider failed to inform the employee and/or worker of his or her rights.

In addition, Florida has no statute of limitations for medical care associated with prosthetic devices.
In Florida the main regulatory agency for workers’ compensation claims is the Division of Workers’ Compensation, which is also part of the office of Florida’s Chief Financial Officer.