Workers Compensation Insurance Cost in Florida: What You Need to Know

As a business owner in Florida, it’s essential to understand the workers compensation insurance cost to ensure compliance and financial planning. 

Who Needs Workers Compensation Insurance in Florida?

In Florida, businesses with four or more employees—whether full-time or part-time—are required to have workers' compensation insurance. However, construction companies face stricter rules and must provide coverage for all employees, including contractors, regardless of the number of workers.

Some smaller businesses may be exempt from the requirement, but companies with a net worth of $10 million or more can apply to self-insure. However, self-insurance requires meeting strict financial standards, including a $100,000 security deposit, making it an option that only large businesses usually pursue.

Why Is Workers Compensation Insurance Required?

Workers’ compensation insurance offers crucial protection for both employees and employers. It ensures that injured employees receive necessary medical treatment and wage replacement, while protecting employers from lawsuits related to workplace injuries.

The benefits of workers' compensation include:

• Medical treatment: covering doctor visits, surgeries, medications, and therapy

• Disability benefits: providing wage replacement for temporarily or permanently disabled employees

• Death benefits: offering financial support to the families of employees who die from work-related injuries

For temporary disabilities, employees typically receive two-thirds of their regular wages, within state-set minimum and maximum limits. If an employee becomes permanently disabled, additional benefits may be available.

Factors That Impact Workers Compensation Insurance Cost

Several key factors influence the cost of workers compensation insurance in Florida:

1. Number of Employees

The size of your workforce is one of the main factors in determining your premium. The more employees you have, the higher your insurance costs will be, as premiums are calculated based on total payroll.

2. Industry Risk

The type of work employees perform also affects the premium. For example:

• Low-risk jobs (like office work): May have a premium as low as $0.26 per $100 of payroll

• High-risk jobs (such as construction or manufacturing): Could cost $19.40 per $100 of payroll

The National Council on Compensation Insurance (NCCI) sets rates based on the level of risk associated with different industries.

3. Claims History

Your business’s past claims history plays a significant role in determining premiums. Companies that have fewer workers’ compensation claims generally qualify for lower rates, as they are viewed as less risky by insurers.

4. Base Rates from NCCI

All insurance providers in Florida must follow base rates set by the NCCI. However, businesses can reduce their rates by implementing safety programs, offering drug-free workplace initiatives, and other risk management strategies.

Average Workers Compensation Insurance Cost in Florida

On average, Florida businesses pay around $1.30 per $100 of payroll for workers' compensation insurance. However, the actual cost varies depending on factors like industry, risk level, and claims history. Here’s a breakdown of typical costs:

Are Workers Compensation Premiums High in Florida?

While some insurance companies claim that Florida premiums are high, Florida workers compensation insurance costs are actually relatively moderate compared to other states. According to a 2018 study, Florida ranked 21st for average premiums in the country, and rates have decreased in recent years, including in 2018 and 2020.

While premiums may increase due to claims frequency, much of the rise is linked to the safety practices of individual businesses. Companies that don’t prioritize safety measures typically face higher insurance costs.

Tips for Lowering Your Workers Compensation Insurance Cost

To reduce your workers compensation insurance cost in Florida, consider these strategies:

• Promote a safe work environment to reduce accidents and injuries

• Provide regular safety training for your employees

• Maintain a drug-free workplace program

• Ensure accurate employee classification based on job duties

By understanding how premiums are calculated, you can make better decisions to manage your workers compensation insurance cost and ensure your business stays compliant with Florida law. For more details, consult the Florida Division of Workers’ Compensation or speak with a workers’ compensation attorney for personalized advice.