As a business owner in Florida, understanding the workers compensation insurance cost is crucial for staying compliant and managing your expenses.
Who Needs Workers Compensation Insurance in Florida?
In Florida, businesses with four or more employees (whether part-time or full-time) are required to have workers' compensation insurance. Construction businesses, however, have a stricter rule and must provide coverage for all employees, regardless of how many workers are on the payroll, including contractors.
There are some exceptions for smaller businesses. Companies with a net worth of $10 million or more can apply to self-insure, but this requires a $100,000 security deposit and proof that the business can financially manage future claims, making self-insurance a choice mainly for large companies.
Why Is Workers Compensation Insurance Important?
Workers' compensation insurance offers protection for both employees and employers. It ensures that employees who are injured at work receive medical treatment and wage replacement, while also protecting employers from potential lawsuits related to work-related injuries.
The main benefits of workers' compensation include:
Medical treatment: covering doctor visits, surgeries, medications, and rehabilitation
Disability benefits: offering wage replacement for injured employees, either temporarily or permanently
Death benefits: providing compensation to families in the case of a fatal work-related injury
For temporary disabilities, employees typically receive two-thirds of their average weekly wages, subject to state-set minimum and maximum limits. Employees who suffer permanent disabilities may qualify for additional benefits.
Key Factors Affecting Workers Compensation Insurance Cost
The cost of workers compensation insurance in Florida can vary depending on several factors:
1. Number of Employees
The more employees your business has, the higher your premium will likely be, as the cost is based on your total payroll.
2. Industry Risk
Some industries are riskier than others, which influences premium rates. For example:
Low-risk jobs (such as office work): May have a premium of around $0.26 per $100 of payroll
High-risk jobs (like construction or manufacturing): Could have premiums as high as $19.40 per $100 of payroll
Rates are set by the National Council on Compensation Insurance (NCCI), which categorizes jobs based on their level of risk.
3. Claims History
A company’s past claims history can significantly impact its workers' compensation premium. Companies with fewer claims typically see lower premiums. Insurance companies reward businesses that invest in safety measures and maintain fewer workplace accidents.
4. NCCI-Approved Base Rates
All insurers in Florida follow base rates set by the NCCI. However, businesses can qualify for discounts if they implement risk-reduction strategies, such as safety programs or drug-free workplace initiatives.
Average Workers Compensation Insurance Cost in Florida
On average, businesses in Florida pay about $1.30 per $100 of payroll for workers' compensation insurance. However, the actual cost will vary depending on your company’s industry, number of employees, and safety record. Here's a general breakdown of costs:
| Risk Level | Average Cost per $100 Payroll |
|---|---|
| Low-Risk Jobs | $0.26 |
| Standard Rate | $1.30 |
| High-Risk Jobs | $19.40 |
Are Workers Compensation Insurance Premiums High in Florida?
While some insurance companies argue that premiums in Florida are too high, Florida's workers compensation insurance premiums are actually moderate when compared to other states. A 2018 study ranked Florida 21st in terms of average premiums, and rates have dropped in recent years, including in 2018 and 2020.
The increases often blamed on claims frequency are generally due to the safety practices in place at individual businesses. Companies that fail to prioritize safety may face higher premiums as a result.
Tips for Lowering Your Workers Compensation Insurance Cost
To reduce your workers compensation insurance cost in Florida, consider implementing the following strategies:
Create a safe work environment to minimize injuries
Provide regular safety training for your employees
Maintain a drug-free workplace program
Ensure that your employees are classified correctly based on their job duties
By understanding the factors that influence premiums, you can manage your workers compensation insurance cost more effectively while ensuring that your business remains compliant with Florida law. For more detailed information, consult the Florida Division of Workers’ Compensation or speak with a workers' compensation attorney.
