Question 1

Are sole proprietors and LLC members required to have workers' comp?

Accepted Answer

Sole proprietors and LLC members generally aren't required to cover themselves and can file exemptions in Florida. Once you hire any non-exempt employee, requirements kick in immediately (1+ employees in construction, 4+ in non-construction). Even when not required, many sole proprietors carry comp voluntarily because health insurance often excludes work-related injuries — without comp, an on-the-job injury leaves them with no coverage.

Question 2

What's the experience modification factor (mod)?

Accepted Answer

The experience mod is a multiplier on your standard premium based on three years of prior loss history, computed by NCCI relative to other businesses in your class code. A mod of 1.0 is industry-average; 0.85 means your loss history is better than peers (15% premium discount); 1.4 means your history is worse (40% surcharge). Mods build slowly but persistently — three good years can drop you below 1.0 and unlock significantly lower premiums and more carrier choices.

Question 3

Can I get an exemption from Florida workers' comp?

Accepted Answer

Officers of corporations and members of LLCs can file for individual exemptions through the Florida Division of Workers' Compensation. Construction-industry exemptions are limited to 3 corporate officers or LLC members; non-construction allows up to 10. Exemptions cost a small filing fee and last 2 years. Filing an exemption means YOU aren't covered — if injured on the job, you have no comp benefits and your health insurance probably won't pay either.

Question 4

How is workers' comp premium calculated?

Accepted Answer

Premium = (payroll ÷ 100) × class-code rate × experience mod × scheduling/credit factors. Each employee classification has an NCCI rate per $100 of payroll — clerical might be $0.20/$100, while a roofer can exceed $20/$100. Annual estimated payroll generates the deposit premium; an audit at policy expiration adjusts based on actual payroll. Misclassifying employees (calling a roofer 'clerical' to lower premium) is fraud and triggers severe back-charges plus penalties.

Question 5

Does workers' comp cover independent contractors?

Accepted Answer

Generally no — true independent contractors carry their own coverage or operate as exempt sole proprietors. But Florida applies a strict test: if the worker's day-to-day is controlled like an employee, looks like an employee, and is paid like an employee, courts and the state often classify them as employees regardless of the 1099 relationship. Construction is especially aggressive on this — anyone working on a Florida job site without proof of exemption or coverage is presumed an employee.

Question 6

What's the difference between Coverage A and Coverage B?

Accepted Answer

Coverage A is the statutory workers' comp benefits — medical, indemnity, death — paid to injured workers per Florida law. Coverage B is employer's liability — protection against employee lawsuits when the comp grand bargain breaks down (third-party-over claims, dual-capacity claims, intentional acts allegations). Standard Florida workers' comp policies include both, with Coverage B limits typically $100K/$500K/$100K. Higher limits are recommended where employer's liability umbrella attaches.

Question 7

What happens if I don't carry required workers' comp?

Accepted Answer

Florida is aggressive about enforcement. The Division can issue a Stop-Work Order shutting down your business immediately, assess penalties of $1,000/day or 2× the premium you would have paid (whichever is greater), and pursue criminal charges in egregious cases. Worse, you lose the immunity from employee lawsuits — an injured worker can sue directly for the full extent of damages including pain and suffering, often producing settlements far above what comp would have paid.

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