What does Workman’s Comp Insurance Cover?
If you are an employee who works for another person, group, or company, you are required to have Workers’ Compensation Insurance. This includes people working under any type of contract and also includes all lawfully and unlawfully employed immigrants and minors. Workers’ compensation insurance, also known as workman’s comp, provides benefits to employees who get injured or sick from a work-related cause. This insurance reduces your liability for work-related injuries or illnesses, and includes missed wage replacement, disability benefits, and death benefits. Workers’ comp also reduces your liability for work-related injuries and illnesses.
What Qualifies you for Workers Comp?
To comply with The U.S. Department of Labor’s Wage and Hour Division (WHD), your business may need to obtain a workers’ compensation insurance policy, based upon the number of people you employ. In Florida, if you are in an industry, other than construction, and have four (4) or more employees, full-time or part-time, you are required to carry workers’ compensation coverage (an exempted corporate officer does not count as an employee). Section 440.107 Florida Statutes, states in part that; “The Legislature finds that failure of an employer to comply with the workers’ compensation coverage requirements poses an immediate danger to public health, safety, and welfare”.
How many Employees Before workers comp is Required?
An employer in the construction industry who employs one or more part or full-time employees must obtain workers’ compensation coverage. Sole proprietors, partners, members of a limited liability company, and corporate officers are considered employees. While corporate officers and LLC members are defined by law as employees, an officer of an active Florida corporation or member of an active Florida LLC can apply for an exemption, providing they demonstrate ownership of the business. If exempt, as approved by the WHD, the corporate officer or LLC member would not be included in the count of employees.
An employer in the non-construction industry who employs four or more part or full-time employees must obtain workers’ compensation coverage. Corporate officers and members of a limited liability company are considered employees. While corporate officers and LLC members are defined by law as employees, an officer of an active Florida corporation or member of an active Florida LLC can apply for an exemption, providing they demonstrate ownership of the business. If exempt, as approved by the WHD, the corporate officer or LLC member would not be included in the count of employees. Sole proprietors and partners in the non-construction industry are not considered to be employees unless they elect to be employees.
The WHD conducts routine investigations of Florida employers to assure that the proper insurance is in effect. When an employer is found to be without workers’ compensation insurance, the law requires the WHD to issue a Stop-Work Order. A Stop-Work Order requires the immediate cessation of all business operations until the employer comes into compliance with the coverage requirements and agrees to pay the assessed penalty. The assessed penalty is equal to 2 times the amount the employer would have paid in insurance premium within the preceding 2-year period or $1,000, whichever is greater.
