As a business owner in Florida, understanding the workers compensation insurance cost is vital to ensure compliance and financial planning. Florida requires most businesses to provide workers’ compensation insurance for employees injured on the job, covering medical expenses and wage replacement regardless of fault.
Who Is Required to Carry Workers Compensation Insurance in Florida?
In Florida, businesses with four or more employees—whether full-time or part-time—must carry workers’ compensation insurance. However, construction companies face stricter requirements and must provide coverage for all employees, no matter how many they employ. This also applies to contractors in the construction industry.
Some small businesses may be exempt, but companies with $10 million or more in net worth can opt to self-insure. Self-insurance requires a $100,000 security deposit and proof of financial stability to cover future claims, making it an option primarily for larger businesses.
Why Is Workers Compensation Insurance Necessary?
Workers’ compensation insurance protects both employees and employers. It ensures employees don’t face financial hardships due to job-related injuries and guarantees they get medical treatment and wage replacement benefits. For employers, it provides protection against lawsuits stemming from work-related injuries.
Workers’ compensation benefits typically include:
-
Medical care: doctor visits, surgeries, therapy, prescriptions
-
Travel expenses: for medical-related trips
-
Disability benefits: temporary or permanent wage replacement
-
Death benefits: for the surviving family members in case of a fatal injury
For temporary disabilities, employees usually receive two-thirds of their average weekly wage, subject to state limits. Permanent disabilities may qualify the employee for additional compensation.
Key Factors That Affect Workers Compensation Insurance Cost
Several factors impact the cost of workers compensation insurance in Florida:
1. Number of Employees
Larger businesses with more employees will generally face higher insurance premiums, as the cost is directly related to total payroll.
2. Industry Risk
Certain industries are more prone to accidents and injuries, which leads to higher premiums. For example:
-
Low-risk jobs (e.g., office work): Typically $0.26 per $100 of payroll
-
High-risk jobs (e.g., construction or manufacturing): Around $19.40 per $100 of payroll
The National Council on Compensation Insurance (NCCI) sets rates based on the risks associated with different job classifications.
3. Claims History
Businesses with fewer workers’ compensation claims generally enjoy lower premiums. Employers who invest in a safe work environment are rewarded by insurers with reduced rates.
4. NCCI-Approved Base Rates
Insurers in Florida must adhere to base rates set by the NCCI. However, businesses that implement safety programs, maintain a drug-free workplace, or take other proactive measures may qualify for discounts.
What Is the Average Cost of Workers Compensation Insurance in Florida?
The average cost for workers’ compensation insurance in Florida is about $1.30 per $100 in payroll. However, rates can vary significantly depending on your industry and specific company details. Here’s a breakdown:
| Risk Level | Average Cost per $100 Payroll |
|---|---|
| Low-Risk Jobs | $0.26 |
| Standard Rate | $1.30 |
| High-Risk Jobs | $19.40 |
Are Workers Compensation Premiums Expensive in Florida?
While insurance companies often claim that premiums are high, Florida’s workers compensation premiums are actually moderate when compared to other states. A 2018 study ranked Florida 21st in terms of average premiums. In fact, premiums dropped in both 2018 and 2020.
The premium increases often cited by insurers are generally due to high claims frequency, not necessarily high state rates. Businesses that do not focus on workplace safety often face higher premiums.
Tips for Reducing Your Workers Compensation Insurance Cost
To reduce your workers compensation insurance cost in Florida, business owners should focus on:
-
Creating a safe workplace to minimize injury risks
-
Providing ongoing safety training to employees
-
Implementing a drug-free workplace program
-
Ensuring employees are properly classified based on their job duties
By understanding the factors that influence premiums, businesses can better manage their insurance costs and maintain compliance. For further guidance, refer to the Florida Division of Workers’ Compensation or consult a workers’ compensation attorney for personalized advice.