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What is Workers’ Compensation?

Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for negligence.
Workers’ compensation is required by law. The Florida work comp insurance rates are governed by the Florida Department of Insurance. Work comp is often the costliest line of insurance for Florida businesses.

Compliance Requirements For Business Owners

Chapter 440, Florida Statute establishes workers’ compensation compliance requirements for employers.

1.Construction Industry: A construction business who employs 1 or more part or full-time employees must obtain a work comp insurance policy. Sole proprietors, partners, or LLC Members who own at least 10% of the business, and corporate officers are considered employees.

Corporate officers, and LLC Members who own at least 10% of the business, may elect to exempt themselves from the coverage requirements of Chapter 440, F.S.

A construction industry contractor, who sub-contracts all or part of their work, must obtain proof of workers’ compensation coverage or a Certificate of Election to be Exempt from all sub-contractors, before to work starts. If the sub-contractor is not covered or exempt, the sub-contractor’s employees will become the employees of the contractor. The contractor will be responsible to pay any workers’ compensation benefits to the sub-contractor and its employees.

Again, you are responsible for making certain that all your subcontractors either have their own Florida work comp policy or have a valid exemption from workers’ comp. If you allow a person to work on the construction site without coverage or a valid exemption, your insurance company will charge you premium for them and your policy might be cancelled. Moreover, you risk incurring punitive fines from the state Division of Workers’ Compensation.

2.Non-Construction Industry: A non-construction business who employs 4 or more part or full-time employees, must obtain a work comp insurance policy. Corporate officers and members of an LLC who own at least 10% of the business are considered employees, unless they elect to exempt themselves from the coverage requirements of Chapter 440, Florida Statute. Sole proprietors and partners in the non-construction industry are not considered to be employees unless they elect to be employees. The Notice of Election of Coverage, Form DWC 251, must be submitted to the Division. Once approved the individual is considered an employee until a Revocation of Election of Coverage, Form DWC 251-R is filed with, and accepted by the Division.

3.Agricultural Companies: Agricultural employers with 6 or more regular employees and/or 12 or more seasonal employees, who work for more than 30 days, must obtain a workers’ compensation policy for those employees.

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