Most businesses in Florida need to purchase workers’ compensation insurance to cover employees in the event of an at-work accident or illness. It provides compensation for lost wages, medical expenses, and death benefits.
In Florida, the Department of Financial Services’ Division of Workers’ Compensation regulates this type of insurance. Florida businesses have two options for purchasing insurance:
- Through the voluntary market with private insurers
- If you are unable to purchase insurance on the voluntary market, you can get insurance through the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA)
Once you understand the rules, you can pick the option that works best for your business.
Who Needs Coverage?
Coverage requirements for workers’ comp in Florida vary depending on the industry you operate within:
- Construction Industry– Construction-related businesses must hold workers’ comp if they have one or more employees, including owners who are LLC members or corporate officers.
- Non-Construction Industry– In other types of businesses, excluding agriculture, you need workers’ compensation insurance if you have four or more employees, including the LLC members and corporate officers.
- Agricultural Industry– For agricultural businesses, the requirements state that you must have insurance if you employ six or more regular workers or if you have 12 or more seasonal workers. A seasonal employee works more than 30 days in one season but no more than 45 days per year.
- Contractors– If you are a contractor and hire subcontractors, you must first ensure that they hold workers’ comp insurance. If they do not, you must provide the insurance and consider that worker an employee.
Classification Codes and Coverage Requirements
When you purchase a workers’ compensation policy for your employees, it must include certain minimum coverage amounts. How much you will ultimately pay for coverage depends on multiple factors, including the size of your payroll and the history of claims your business has made. Another important factor is the classification code.
These codes set minimum rates depending on the industry and the type of work employees do. The risker the work, the higher the rate as reflected in the classification codes. Florida relies on the National Council on Compensation Insurance (NCCI) for up-to-date codes.
The NCCI regularly gathers data and analyzes trends in various industries, and as a result, the codes change from year to year. This means your rates may change as well, either going up or down from one year to the next.
Exemptions and Applications
Florida outlines some exemptions from the requirements for workers’ compensation coverage. Some are automatic, but if you want to take advantage of other exemptions, you must complete an application and submit a $50 fee through the Division of Workers’ Compensation to be considered exempt. You may be eligible for an exemption if you employ any of the following:
- Sole proprietors and partners in non-construction industries
- Independent contractors in non-construction industries
- Licensed real estate brokers
- Musical and theater performers, including disc jockeys
- Some taxi, limousine, or other drivers
- Some sports officials
Also, note that LLC members and corporate officers are considered employees who must be covered by workers’ compensation unless they apply for an exemption.
The broad outline of requirements for workers’ compensation in Florida is simple, but there are many more details to consider. These resources from the FWCJUA give you a more comprehensive understanding:
- Florida Workers’ Compensation System Guide– This detailed guide gives you a general overview of the laws in the state regarding workers’ comp.
- Coverage Assistance Program– Enter your business description or classification code into this online tool to get help finding providers.
- Benefits Calculator– The FWCJUA provides this calculator to estimate benefits.
- Rule Changes and Notices– Laws change, so it’s important to keep up with anything new on this page.
- Brochures, Guides, and Posters– For informational material, you can use or share with employees, visit this page on the FWCJUA site.
- Annual Reports and Summaries– Here, you’ll find summaries of related data and annual reports on workers’ compensation, disputes, fraud, and more.
Get Informed for Better Choices
As a business owner, purchasing numerous forms of insurance is unavoidable, and it can be complicated. Take the time to read up on Florida’s workers’ comp rules and regulations so that you can make the best choices. You have options to use the Florida state fund for workers’ compensation or shop around for private insurers, but in either case, you must follow the laws or face penalties, fines, or even jail time.