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An introduction to workers’ comp

If you have employees, you probably need this insurance    

By Deb Eveson    

You have a lot invested in your employees; they are your most important assets. If they are unable to workinjury because of a work-related injury or illness, not only do they suffer, but you suffer as well: All the time and training you have invested in them is lost, and you may have to train someone else to replace them while they recover.

One way your employees are protected is through workers’ compensation. Here is a primer on the basics of workers’ comp in Florida:

• What is workers’ compensation? Workers compensation is an insurance program that pays employees who are injured on the job. Payment includes benefits for all medical costs related to the injury and disability benefits if the employee is unable to return to work. But workers comp is not only for employees: It also protects you—the employer—from litigation relating to workplace injuries.

• Who must have it? Any non-construction Florida employer with four or more full or part-time employees must provide workers’ compensation insurance. Note, though, that although you are not required to carry workers’ comp insurance if you have three or fewer employees, you could still incur liability for covering claims from an injury or illness that is job-related.

If your company is in the construction industry and employs even one full or part-time employee, you must carry workers’ comp insurance. There are also specific requirements for farmers and state and local governments which may fall outside of these guidelines.

Several types of employees are not covered under workers’ comp insurance: domestic servants; workers on small farms employees that employ five or fewer regular employees and fewer than 12 other employees at one time for seasonal labor not exceeding 30 days; professional athletes; sports officials for interscholastic sports and public or private non-profit amateur, sports events; labor under sentence of a court to perform community service (DUI law); state and county prisoners unless working for private employees; and employees covered by the Defense Base Act

• What kinds of injuries are covered? Workers’ comp claims are paid based on the direct result of workplace activity, whether it is an injury, disease, or accident from the job. Claims can result from a variety of causes, such as disease contracted as a result of exposure on the job, accidental injury on the job, or other injuries from a work-related activity.

• Who counts as an employee under workers’ comp? An owner or operator may not be counted as an employee under certain circumstances. For example, a sole proprietor or a partner is considered to be the employer, not an employee. These individuals, therefore, are not provided benefits under the law. However, the law provides them the opportunity to elect to be covered by filing the proper election form with the Division of Workers Comp.

An officer of a corporation is an employee if the officer performs services for the corporation for pay. When the officer is considered to be an employee under this rule, the law allows the option to exempt the officer from coverage by filing the proper notice with the Division. Corporations in the construction industry can exempt no more than three officers and those officers must own a minimum of 10% of the corporation. For non-construction corporations, there is no limit to the number of exemptions allowed.

• How can you save money on premiums? The standard rate charged for workers’ comp is calculated on every $100 of payroll, based on risk classifications of your operations. A manufacturing environment, for instance, has a different rate from a business operating in an office environment.  

Certain modifications may apply when premiums reach certain levels. The Experience Rating Plan, which is mandatory for risks exceeding certain annual premiums, recognizes the prior loss experience of the risk and applies either a debit for unfavorable experience or a credit for better-than-expected loss results.

All aspects of rating are administered and enforced by the National Council on Compensation Insurance. The Council files rules and rates with the State Insurance Department, establishes classifications, promulgates experience modifications, and audits all policies for correctness under a rule requiring that a copy of every policy issued must be filed with the Council. 

• Any other requirements? Florida requires employers to place two posters in a prominent place where employees can easily access them. “The Broken Arm Poster” alerts employees of their rights under Florida law; you must place your insurer’s information on the poster. “The Anti-Fraud Notice” warns employees about workers’ compensation fraud.

You are also required to report all job-related injuries to the state within seven days of occurrence. 

• What’s the best rule for dealing with workers’ comp? Think safety first in preventing accidents and injuries to protect your employees and keep your claims and your premiums down. If you have employees, you need workers’ comp coverage.

Find an insurance agent you are comfortable with who has experience with workers’ compensation insurance. Use your business network to get referrals. Choose the agent with the experience and service delivery that best suits your business needs.

To download a copy of Florida’s Workers’ Compensation Guide, click here.

Deb Eveson.smallDeb Eveson is agency owner of Eveson Insurance Agency (www.allstate.com/debeveson), 12525 Philips Hwy, Suite 206 Jacksonville, FL 32256. She can be reached at 904-400-6450 or DebEveson@Allstate.com.

 

 

SIDEBAR

How can you minimize exposure to claims?

Since claims are made because of accidents and injuries, take proactive steps to reduce the opportunity for injury. In other words, think and “preach” safety—to everyone in your employment, whether they are in a job that has inherent risks or in a “safe” job, such as working in an office environment.

Consider the type of activities prevalent in your industry, and those that create an environment for potential hazards for employees. Involve your employees; they know their jobs better than anyone else. And, don’t tolerate short-cutting safety to get a job done faster.

Here are some suggestions to get your started:

• Vehicle safety. Provide a vehicle safety course. Conduct a safety checklist. Install backup alarms on trucks. Consider speed governors.

• Office environment. Involve employees in reporting safety issues they uncover in the workplace, such as slippery floors; ask employees to close desk drawers to prevent bruised shins and worse; don’t allow the use of extension cords to reduce fire risk.

• Keyboarding. Tell employees to stretch and move from their desks every few hours. Provide ergonomic chairs; train employees how to use them properly. Set up work stations for proper keyboard use.

• Manufacturing. Thoroughly train employees on how to safely operate equipment. Issue safety glasses and hearing protection and enforce their usage. Convene a safety committee; get employees involved in identifying and eliminating risks. Run regular safety inspections; correct problems immediately.


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