WHICH EMPLOYERS NEED WORKERS COMPENSATION COVERAGE?

In Florida, if you have four or more employees, or, if you are in the construction business after October 1, 1989, with one or more employees, you are subject to the Workers' Compensation Act. Corporate officers are automatically included within a definition of covered employees, but can elect to be excluded by filing a Notice of Election To Be Exempt form. Sole proprietors and partners are automatically excluded but can be included by filing a form. If you are a sole proprietor and you are the only employee, workers' compensation is not applicable. If an employer outside the construction industry with fewer than four employees chooses not to secure the workers' compensation coverage, he must post clear written notice in a conspicuous location at each work site telling the employees and others of their lack of entitlement to workers' compensation.

Since there are complicated and special rules which are applicable to the construction industry for contractor/ subcontractor and independent contractor relationships, you should discuss the matter with your insurance agent and/or your attorney if there is any doubt concerning whether or not your business needs workers' compensation insurance coverage.

In 1998, the Florida Legislature enacted amendments to the Insurance Code pertaining to the leasing industry. If you decide to lease your employees or hire temporary staff, you can obtain workers' compensation coverage for these employees through the leasing company. These leasing companies will provide information that will permit the insurance carrier to establish the experience modification factor which should be applied to your company. You should ensure that your leasing company is licensed under the Florida law and require a written agreement explaining in full detail the rights and obligations of the parties in this agreement.

There are special provisions in the Workers' Compensation law which relate to coverage of law enforcement officials and firefighters, and there are certain types of employees which need not be provided with workers' compensation coverage, such as domestic workers, certain agricultural laborers, professional athletes, casual employees, and certain volunteers.Workers' compensation insurance coverage can be obtained for all excluded employees if the employer so chooses to purchase the insurance. If coverage is purchased, the statutory exclusion is waived and the affected employee is then fully covered as if no exclusion ever existed.

FAILURE TO OBTAIN WORKERS' COMPENSATION COVERAGE

If an employer fails to obtain required coverage and an accident occurs, the injured employee can require the employer to pay workers' compensation benefits individually or he can sue the employer in civil court. If suit is filed in civil court, the employer cannot defend the claim on the basis that the injured employee's injuries were caused by himself or fellow employees or that the injured worker assumed the risk of injury. Monetary exposure to liability in these circumstances can be extremely significant. In addition, stop-work orders and fines can be levied in addition to injunctions and assessments against the employer. Employers who try to circumvent the law by going "naked" invite litigation and exposure of their business and personal assets.