Does My Small Business Need Workers’ Comp Insurance?

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Does My Small Business Need Workers' Comp Insurance? on avanteinsurance.com

Here’s how Florida stands on this valuable form of coverage

It’s serious business when people have their health on the line at work. An accident can happen even in what appear to be low-risk environments. In recent years, it’s the “smallest” injuries like strains and sprains that have seen the highest number of work injury claims. For small businesses, it’s cuts and punctures that happen with the most frequency.

Workers’ compensation insurance (WCI) exists to protect both staff and their employers in the event of accident, injury, or death. In most states, if you have one employee or more, you’re expected to have WCI in place, with Texas being an exemption. Even there, employers who don’t properly follow established procedures can be subject to administrative penalties.

Here’s what small business owners need to know when it comes to WCI:

A summary of workers’ compensation insurance

WCI takes three primary forms: medical only, temporary disability, and permanent disability. It goes toward payment of medical expenses, and some policies will cover wages missed while a worker gets back on their feet. In most cases, it is only the loss of wages during the waiting period before the policy pays out that are covered.

Workers’ compensation is not the same in every state. Individual states have to say over their statutes and legislation. In some instances, the state itself will supply the insurance. In other cases, WCI may be supplied by commercial/private insurance companies.

Coverage types will vary depending on where in the country a worker is impacted. For instance, not every state will cover missed wages. The location of a claim will dictate how disputes are resolved and how the claims are generally processed. Factors such as benefit amounts, what accidents or injuries are covered and precisely what medical care is to be received are all state-dependent issues.

Employers and employees should both know that if work needs to be carried out in a state other than your own, then you’ll be subject to the WCI legislation of that second locale, not that of your own.

Florida workers’ compensation insurance by industry

The most recent statute information for Florida WCI can be found here. The Bureau of Compliance has laid out the rules for differing employment sectors. If you’re in the construction industry and have one or more employees, you will be required to have WCI in place. For a list of the trades that are considered part of the construction industry, you can refer to this resource.

If you’re a business operating outside of the construction industry, then WCI will be required if you have four or more employees. The agricultural sector requires WCI when operating with six regular employees and/or twelve seasonal workers who work more than 30 days during a season but no more than a total of 45 days in a calendar year.

If you’re a contractor, then you’re required to ensure that each sub-contractor has WCI in place prior to beginning work on a project. Here’s a link to the documentation required for this step. If you’re from out of state and you or your employees plan to work in Florida, it’s necessary to notify your insurance carrier that you’re going to be working there. You’ll need a Florida Workers’ Compensation Policy to get that underway.

What if I’m a sole proprietor/self-employed?

If you’re either of the above, it’s desirable for some to have a WCI policy in place so that in the event of accident or injury, your personal policy won’t be called on to cover expenses. If you’re a sole proprietor or self-employed and are considering taking on even a single member of staff then you’ll have to have WCI in place before they join your team.

Thinking ahead can be very beneficial when it comes to WCI. You may operate alone, but the time may come where you find yourself in another state or working with a client who will require having WCI in place to protect yourself. If it’s already there, you’ll be saving yourself some time and maybe even a few clients.

Further resources

The state of Florida provides some excellent resources for further information regarding WCI. The Division of Workers’ Compensation website offers educational PDF downloads, benefits calculators and exemption information. You can also find up-to-date information on laws and rule changes and workplace media like brochures, guides, and posters.

The Florida Department of State offers this resource on statute rules about WCI. If you’re in any doubt as to the small business size issues, you can consult with the Small Business Administration. The Florida Department of Financial Services provides this information on small business insurance.

WCI is a wise way for employers to protect themselves against injury suits and no-fault claims. For employees, it’s a comfort to know that their own personal health insurance policy won’t have to come into play if a work-related incident is covered by WCI.

Like every form of insurance, it’s always best to discuss your personal circumstances and needs with a qualified insurance professional. At Avante, we’ll be able to take your individual situation into account and help you on your way to the best possible policy.

Avante Insurance is a South Florida family owned and operated insurance agency that provides an array of insurance services to meet individual needs. If you’d like to know more about staying safe with insurance, you can call us at 305-648-7070, request an insurance quote or contact us with any questions or comments.