Gulfshore Insurance > Gulfshore Blog > Workers' Compensation

Workplace injuries are costing your business money in a many ways; increased insurance premiums, cost of hiring and replacement, lost efficiency, additional training, increased paperwork and administrative costs, and more.

When I speak with business owners and CFO’s they often tell me, “the rates are what they are so there is nothing you can do to change what I pay for work comp.” While the state and the NCCI (National Council on Compensation Insurance) do set the class code rates in Florida, the employer has much more control over their premiums than they initially think.

What Employers CANNOT Control: 

The state sets the rate. Standard rates for Workers’ Compensation policies in the state of Florida are set by the NCCI. That means, whatever “class code” the job description of your employees fall into, is the rate you pay. Rate x Payroll = Standard Premium. But did you know, there is another factor that affects the rates you pay? And you have control over it!

Here’s What You CAN Control:

The Experience Modification Factor (The MOD). Every business that is subject to Workers’ Compensation develops their own MOD over time. The MOD is essentially a multiplier of your rates. It can (sometimes drastically) cause your Work Comp premium to increase or decrease based on how your most recent 3-year loss history compares with your competitors. The equation NCCI uses to calculate your MOD is complicated, but to simplify, if you have more Work Comp claims than your competitors and the claims dollars are higher, you are going to have a higher multiplier (MOD) than they will.

How You Can Control The MOD:

If your company has average claims frequency and costs, you’ll have a MOD of 1.00.  If your claims frequency and costs are higher than your competitors, you’ll have a MOD greater than 1.00.  If they are lower than your competitors, you’ll have a MOD less than 1.00.

Here is an example: 

  • Company A and B both have a base Work Comp premium of $50,000.  Company A has lots of claims and a MOD of 1.35.  Company B has very few claims and a MOD of 0.65.
  • A’s Premium Calculation:  $50,000 X 1.35 = $67,500 (That’s 35% more than their average competitor.)
  • B’s Premium Calculation: $50,000 X 0.65 = $32,500 (That’s 35% less than their average competitor and less than half of A’s premium!)

Depending on the size and scope of your business, it may be unrealistic to eliminate all workplace injuries.  However, the handling process is extremely important to reducing the dollar value of the claim.  At Gulfshore Insurance, we work with you and provide materials, training, and awareness for your employees.  We also have in-house Claims Specialists who are licensed adjusters, navigating each claim on your behalf.

Jeffrey Sanders, TRIP is Client Advisor at Gulfshore Insurance. Jeff works with a wide range of business clients to deliver strategic risk analysis, guidance, and insurance. Comments and questions are welcome at jsanders@gulfshoreinsurance.com

The Florida Office of Insurance Regulation (FLOIR) recently announced two changes that will impact workers’ compensation policies as of January 1, 2020.

Workers’ Compensation Rate Decrease Approved
FLOIR recently announced the approval of an average 7.5% rate decrease for employers, effective January 1, 2020. The rate decrease applies to workers’ compensation policies as they are issued or renewed on or after that date. Please note: The 7.5% decrease is an average rate change across all industry types. The rate change for your specific workers’ compensation policy may be different. Click here for a comprehensive list of the new rates by classification.

1% Surcharge for 2020 Florida Workers’ Compensation Policies
Starting January 1, 2020, new and renewal Florida workers’ compensation policies with effective dates beginning January 1, 2020, through December 31, 2020, will have a 1% surcharge to help provide a safety net for the state’s injured employees.

The Florida Workers’ Compensation Insurance Guaranty Association (FWCIGA) pays the claims of injured employees if an insurance carrier becomes insolvent. The Florida Office of Insurance Regulation approved the 1% surcharge to help FWCIGA resolve claims arising from the November 2017 insolvency of Guarantee Insurance Company. All carriers are required to bill and collect the 1% surcharge and remit directly to the FWCIGA.

If you have any questions or concerns regarding this information, please contact us. We are here to assist you and happy to answer any questions you have.

Under a change to an NCCI rule, policyholders must now report any changes in the ownership of their business to their insurance carrier within 90 days.

When the ownership of a business changes, such as through a sale, transfer, merger, consolidation, or formation of a new entity, the change can affect your workers’ compensation experience modification factor (“mod”) that is assigned by NCCI. In the past, application of a revised experience mod, due to ownership change, was effective on the date a policyholder reported the ownership change. If the ownership change was reported to NCCI within 90 days of the change, the revised mod was applied as of the date of the change. If the ownership change was reported more than 90 days after the change, the revised mod was only applied as of the next rating effective date.

NCCI was concerned that policyholders were delaying their reporting of ownership changes/combinability status in order to delay a change in their current experience mod, so they proposed a change to the rule. NCCI determined that ownership and/or combinability status changes should be reflected in the purchaser’s and the seller’s mods as quickly as possible to ensure that the correct premium for the exposure is charged.

As of January 1, 2019, businesses have 90 days to report changes in their ownership in writing to their insurance carrier. Reporting may be done via a Confidential Request for Information Form (ERM-14), or in a narrative on your company letterhead and signed by an officer. If the change in ownership results in NCCI recalculating your experience mod, the insurance carrier will apply the new mod retroactively to the date of the change in ownership, regardless of whether the revised mod is an increase or a decrease.

The rule change also now requires all policyholders to report ownership changes to their workers’ compensation provider, even if the policyholder is not experience rated.

As always, if you have any questions regarding this update, please feel free to contact us. We are here to help.

Hundreds of construction workers are killed every year from ladders and scaffolds, and many thousand more suffer serious injuries that are permanently disabling. And it is estimated that more than 30% of workers compensation claims costs stemming from construction sites are the result of falls from elevated surfaces.

A recent study indicated that injuries related to falls from elevated surfaces are more severe than other injury claims because these accidents result in more time away from work, damage to multiple body parts, and more short- and long-term disability leave.

Do Not Let These Accidents Happen to You

  • A worker, who was standing on the top of a stepladder, fell when the ladder shifted. He suffered a spinal injury and was out of work for four months.
  • Another worker failed to secure an extension ladder at the top and fell 20 feet when the ladder slipped away from the wall.
  • Two men were working high up in a building atrium when their scaffold collapsed. They plunged four stories to a concrete deck. One man was dead on arrival at the hospital; the other was in critical condition.
  • When a three-story wooden scaffold collapsed, two workers fell to the ground, suffering serious neck and back injuries. A third man working under the scaffolding was also injured.


It’s crucial for construction companies and their workers to implement regular safety training — and put that training to practice. Linked below are several helpful OSHA resources and fact sheets to improve worker safety at your organization:

LADDER SAFETY

SCAFFOLDING SAFETY

FALL PROTECTION

The Florida Office of Insurance Regulation announced that it has approved a rate decrease for workers’ compensation insurance in Florida. The 1.8% decrease was filed by the National Council on Compensation Insurance (NCCI) in a law-only filing resulting from the effects of the Federal Tax Cuts and Jobs Act. This applies to both new and renewal workers’ compensation insurance policies effective in Florida on or after June 1, 2018.

For more information about the filing, read the official release from the Florida Office of Insurance Regulation.