What is Workers Compensation Insurance?

What is Workers Compensation Insurance?

Workers’ compensation insurance is an insurance purchased by an employer that provides benefits to employees if they receive any job-related injuries. Workers’ compensation insurance may cover an employee’s medical bills, missed wages, prescription medications, and recovery costs.

For an employee to qualify for workers’ compensation they must have sustained at least 50 percent of their injury on the job and the injury must have occurred during the scope of their employment. This means that if the employee is injured while he/she is acting outside of her job duties then he/she will not qualify for worker’s compensation insurance. Additionally, an employee will not qualify for workers’ compensation if their injury

1) was intentionally self-inflicted,

(2) was while the employee was on drugs or intoxicated, or

(3) occurred because the employee refused to observe safety rules or use readily available safety equipment.

Do I need Workers Compensation for my Business in Florida?

Florida requires that all employers who have at least four or more employees, either full time or part time, purchase workers’ compensation coverage. However, there are three exceptions to this Florida requirement. The first and second exceptions are sole proprietors and partners. Sole proprietors and partners are automatically excluded from having to purchase worker’s compensation insurance; however, they can purchase coverage by filing for election of coverage.

The third exception is the construction industry. Florida mandates that employers in the construction industry who employ one or more employees purchase workers’ compensation coverage. This does not include any sub-contractors that a construction company hires. Each sub-contractor is responsible for providing workers’ compensation insurance to their workers. However, the primary contractor is responsible for making sure that the sub-contractor provides coverage for its workers and must ask for evidence. If you do not require a subcontractor to provide evidence of workers’ compensation insurance and an employee is injured on the job, the primary contractor who hired the sub-contractor becomes responsible for the payment of benefits.

What is the Penalty for not having Workers Compensation in Florida?

It is imperative that an employer operate their business with the required coverage. If an employer operates their business without purchasing workers compensation even though they are required by Florida Law, then there is a high probability that a penalty will be issued.

The division of workers’ compensation conducts routine job inspection to ensure compliance and if they find any employer operating without coverage a civil enforcement action will be taken.

The civil enforcement action will most likely result in a Stop Work order, which requires the business to stop all their operations until it complies with Florida law and pays a penalty. The penalty that the Division of Workers’ Compensation will order the business not operating with coverage is equal to two times the amount that the business would have paid in workers compensation insurance premium within the preceding two-year period.

In order to avoid the penalty, any Florida business operating with four or more employees must purchase workers’ compensation insurance, which in Florida will cost your business about $1.32 per $100 wages.


EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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