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Should I File For a Workers' Comp Exemption?

Should I File For a Workers’ Comp Exemption?

Workers’ compensation insurance is a crucial—and often mandatory—part of owning a business in Florida.

But if you’ve owned a business for some time (or spent enough time around insurance agents), you might have heard of some business owners filing for a workers’ comp exemption.

Filing a workers’ comp exemption is a complex issue that should not be taken lightly. There are requirements that must be met and proper procedures to follow.

So what exactly is a workers’ comp exemption, how does it work, and is it right for you?

 

What is a Workers’ Comp Exemption?

Workers’ comp insurance is an extremely beneficial type of coverage, in that it protects you from costly legal and medical expenses in the event an employee is injured while on the job.

A serious injury or illness could lead to the need for lifelong treatment. Worker’s compensation covers this within the bounds of your policy so that your bank account doesn’t have to.

bandaged paper man under umbrella

Under Florida law, businesses must carry workers’ comp insurance if they are:

  • a construction business with one (1) or more employees (including corporate officers and LLC members);
  • an agricultural business with six (6) regular and/or 12 seasonal workers who work between 30-45 days a year;
  • a non-construction corporation or LLC with four (4) or more employees; or
  • a state or local government office.

Businesses that do not meet these requirements (an accounting firm with only two employees, for example) are not required by law to carry workers’ comp coverage. (This does NOT mean they don’t need it, just that the law doesn’t require it.)

However, some businesses who do meet these requirements (for instance, an accounting firm with 10 employees) might choose to file for a workers’ comp exemption in order to save money on their premiums.

Filing a workers’ comp exemption allows these businesses to exclude their officers, directors, and owners from the state’s requirement to have workers’ comp coverage. Workers’ comp exemptions ONLY apply to officers/directors/owners; the law does NOT allow any business to exempt rank and file employees from otherwise mandatory workers’ comp coverage.

 

How to File for a Exemption

For starters, if you have less than the required amount of employees for workers’ comp coverage and are opting out of workers’ comp, there’s no need to file for an exemption.

A workers’ comp exemption is only necessary if you meet the legal requirements for carrying workers’ compensation but are choosing to exempt an officer, owner, or director of the company. If you do not have an active Notice of Election to be Exempt, the Florida Division of Workers’ Compensation can fine you.

man holding tiny umbrella over cartoon businessman

State employees perform regular field inspections to ensure that businesses are complying with the law. If a business does not carry workers’ comp, fits the statutory requirement to have it, and has not filed for an exemption for its owners/officers/directors that brings them out of the statutory requirement, they will be fined.

Applications for workers’ comp exemptions must be made online through the Florida Division of Workers’ Compensation. For corporations in the construction industry, a $50 fee will apply (this is used to perform an audit). There is no cost for LLCs or non-construction corporations.

You will have to renew your certificate every two years.

 

Should I File for a Workers’ Comp Exemption?

Workers’ comp insurance is a great way to protect your employees from the lost wages and medical bills that come as a result of a workplace accident. They also protect your business from being sued by a litigious employee in most cases.

Any business—especially those in riskier industries—should never be without it.

LLCs and Corporations sometimes exempt their officers from coverage, which reduces premiums. However, the potential costs of a lawsuit (or paying for medical costs out-of-pocket) are worth the relatively minor investment of carrying this coverage in the first place.

 

Protect Your Assets

Risks, by their very nature, are unpredictable. No business owner, manager, or employee can prevent a workplace accident 100% of the time.

A workers’ comp exemption may save you a few bucks in insurance premiums, but the money you will save is nothing compared to the amounts you may have to spend if and when a workplace accident happens.

Owning a small business is a risky venture. Having the right level of insurance helps to ameliorate some of that risk, and workers’ comp insurance is no exception.

If you are looking for comprehensive insurance for your small business, we look forward to meeting with you and discussing your business, your goals, and your needs. Request a quote today.

actual cash value vs. replacement value

Actual Cash Value vs. Replacement Cost

If you’re like most people, you don’t examine your insurance documents until you need to make a claim.

And that’s when you’ll notice it.

Your insurance company isn’t paying you enough to replace your totaled car, stating that your policy only reimburses you for “actual cash value.”

It’s a confusing distinction, understanding actual cash value vs. replacement cost is an important part of creating the coverage level you need.
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Understanding Your Certificate of Insurance

Understanding Your Certificate of Insurance

If you have a small business, you are probably aware that you need a Certificate of Insurance (COI).

You might have been asked to provide one by a savvy consumer or potential landlord. Or perhaps your independent insurance agent advised that you have one.

You may not even have the slightest clue what it is.

As Central Florida-based independent insurance agents, we not only know what a Certificate of Insurance is, we’re also used to answering questions about them. Let’s answer some of your top questions about your Certificate of Insurance.

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Local independent insurance agents

5 Reasons to Use Local Independent Insurance Agents

Maybe you’re starting a new business. Or perhaps you’re just curious about whether you’re overspending on your premiums. Getting an insurance rate comparison is a great way to research your options and get a policy that’s right for you.

But you have a choice: use up next week’s lunch breaks calling every insurance company you can or getting an insurance rate comparison from an independent insurance agent.

Aside from the fact that they’re completely free (yep!), here are five reasons why local independent insurance agents are better than buying your policies directly from the corporate office.

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Rideshare Insurance 101

With millions of drivers between them, ridesharing platforms like Uber and Lyft remain popular for anybody with a dependable car looking to make some extra cash.

But while you may have wondered whether you can actually make a living as an Uber driver, you might not have bothered to think about another crucial number: rideshare insurance.

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Does Homeowners Insurance Cover Theft Outside the Home?

Just like a Business Owner’s Policy (BOP) combines multiple categories of protection into a single policy, typical homeowners insurance covers three major categories:

  • Structure – Protects your home’s roof, walls, foundation, etc.;
  • Liability – Protects you from lawsuits in the event a third party experiences injury, damage, or loss (i.e. your dog bites someone or your neighbor slips and falls on your stairs);
  • Personal property – Protects your belongings (i.e. anything you would take with you when you move) against damage and/or theft.

It is this last category—theft—that often raises questions, even among veteran homeowners.

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What's the difference between personal and commercial auto insurance?

What’s the Difference Between Personal and Commercial Auto Insurance?

If you own any type of business, you probably know that a Business Owner’s Policy (BOP) is an essential tool to have in your insurance arsenal. But it’s not the only kind of commercial insurance you need.

Your BOP doesn’t provide any coverage for vehicles, so you’ll need a separate policy if you want auto insurance. (Trust us, you do!)

You might have heard from other well-meaning business owners that your personal auto insurance will cover business use. In most cases, this isn’t true.

Let’s take a look at the difference between personal and commercial auto insurance.
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Why Did My Car Insurance Go Up?

You just received another letter from your insurance company notifying you that your car insurance rates will be increasing this year.

“Why did my car insurance go up?!” you scream in frustration. “I didn’t even have any claims!”

Unfortunately for car owners, this is an common occurrence…and it doesn’t look like it will stop anytime soon.
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Here's why general liability insurance coverage isn't enough to protect your business.

Why General Liability Insurance Coverage Isn’t Enough

Most business owners hear the phrase “general liability insurance” and assume that they are covered against “general” liabilities.

This assumption could not be further from the truth.

The fact is, as a business owner, your general liability insurance coverage isn’t enough to protect your business from every foreseeable risk.

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10 Crazy Insurance Policies (That Actually Exist)

10 Crazy Insurance Policies (That Actually Exist!)

As every insurance carrier and broker knows, risk is unpredictable. After all, that’s why insurance exists.

But while there are some forms of risk that are foreseeable—fire damage, car accidents, catastrophic hurricane damage—there are other types of losses that are far more surprising.

Even more surprising? You can get insurance for them.

Here are 10 crazy insurance policies that actually exist (and why they’re not all that crazy).

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