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Workers’ Compensation Frequently Asked Questions

To help answer some of the workers’ compensation questions we receive on a regular basis, we have compiled a list of frequently asked questions. As always, we are standing by to serve you by phone, fax, email, or in person. If you have any unanswered questions, please contact us. Select a topic to get started.


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    Q. How long do I have to report a claim for an injured worker?

    Your employee should report the claim as soon as possible to you (the employer), but no longer than 30 days. You (the employer) should report the injury to the insurance company as soon as possible, but not later than seven days after gaining knowledge of the injury

    Q. I have been told that my Workers’ Compensation Policy covers all injuries arising out of or within the scope of employment. Are there any injuries are NOT covered under the Workers’ Compensation Policy?

    The law does not provide compensation for the following conditions:

    • A mental or nervous injury due to stress, fright, or excitement.
    • A work related condition that causes an employee to have fear or dislike for another individual because of the individual’s race, color, religion, sex, national origin, age, or handicap.
    • “Pain and suffering” has never been compensable in Florida, nor is it compensable in any other state. The employer may not sue an injured worker for causing a catastrophe nor can the injured worker sue the employer for their injury. This trade-off makes it possible for injured workers to receive immediate medical care, at no cost to the injured worker, without any consideration for who was at fault, the employer or the employee. In civil law, negligence must be established through litigation before any compensation is awarded.

    Compensation will not be paid in several other instances:

    • If the injury is caused by the employee’s willful intention to injure or kill himself or another.
    • If the injury is caused primarily because the employee is intoxicated or under the influence of drugs.
    • If the injury or death of the employee is covered by the Federal Employer’s Liability Act, the Longshore and Harbor Workers’ Compensation Act, or the Jones Act (if the injured worker is a “seaman” or member of a crew).

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    Q. What is the rating base for Corporate Officers that are considered employees? Is their payroll included also in the premium?

    If the Corporate Officer is not exempt from coverage by filing a Notice of Election of Exemption, payroll limits are used. Currently, the maximum amount of payroll used for Corporate Officers is capped at $119,600.  Alternately, if a Corporate Officer does not draw a salary, the minimum amount of payroll wages used is $18,200.

    Q. Is overtime payroll included in my Workers’ Compensation premium?

    Only “straight time pay” is chargeable for premium purposes; the extra portion of overtime pay is excluded. The insured’s books must show, for each employee, either the overtime portion of pay as a separate item, or the total pay for overtime hours (which may be converted to straight time pay).

    Q. I have an independent contractor that I pay via 1099; therefore, do I not have to pay Workers’ Compensation premiums?

    An IRS 1099 employee does not always determine the worker to be an independent contractor according to Workers’ Compensation.  In order to be considered independent contractor under workers’ compensation regulations, four of the following criteria must be met in the non-construction industry. For contractors, all six criteria must be met:

    1. The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations.
    2. The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a FEIN number under state or federal regulations.
    3. The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual.
    4. The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation.
    5. The independent contractor performs work, or is able to perform work, for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process.
    6. The independent contractor receives compensation for work or services rendered on a competitive-bid basis, or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.
    Q. As the President, can I exempt myself from Workers’ Compensation?

    Yes, a Notice of Election of Exemption may be filed by you through the Florida Department of Financial Services; however, there are limitations and conditions. Non-construction industry exemptions are limited to corporate officers. Construction industry exemptions are limited to only three exemptions and all exempted persons must own 10% of the construction company.

    Q. What credits are available for my workers’ compensation policy and what is the difference between them?

    Drug-free Workplace Premium Credit – For employers that have a Drug-free Workplace Program established and maintained in accordance with Florida law. The monetary discount is 5% of the standard premium.

    Workplace Safety Program Premium Credit – For employers that have a Workplace Safety Program established and maintained in accordance with Section 440.1025 of Florida Statutes. The monetary discount is 2% of the standard premium.

    Contact your Gulfshore Insurance Advisor for details and assistance in implementing these programs.

    Florida Contracting Classification Premium Adjustment Program Credit – This program is applicable to qualifying employers engaged in contracting operations.  A special updated hybrid formula premium calculation, which may result in a premium credit, will be based on average hourly pay rates for each classification of contracting operations.

    Premium Discount – Carrier discount applied to all Florida policies on a graduated rate, increasing with the premium.

    Q. What is the ‘Expense Constant’ charge on my invoice and workers’ compensation policy?

    The Expense Constant is a charge on every workers’ compensation policy and represents the common administrative expenses of issuing and administering a policy. In Florida, this is currently a flat rate of $160.00 – regardless of policy size. It is not subject to any premium modifications.


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    Q. Can volunteers who do not receive any pay be covered by our Workers’ Compensation policy?

    Yes. Please contact your Gulfshore Insurance Advisor to request an endorsement be added to your policy.

    Q. Why am I subject to a Workers’ Compensation audit?

    Workers’ Compensation premiums are based on payroll dollars. The unit of exposure for which Workers’ Compensation rates are established is $100 of remuneration or “payroll” to employees.  It is important that an audit is completed to ensure that your business neither overpaid nor underpaid the premiums.

    Q. Why do I have to notify the insurance company in writing within 90 days when the ownership percentages change?

    The insurance company agrees to insure your business as it is listed on the application. Each business has individual loss history which follows it accordingly. Incorporating someone else or another entity will require approval for coverage from the insurance company by way of completing an ERM-14 form. Change in ownership includes sales, purchases, other transfers, mergers, consolidations, dissolutions, formations of new entities and other ownership percentage changes.

    Q. I am not statutorily required to carry Workers’ Compensation insurance as I only have two employees. Should I still carry Workers’ Compensation insurance?

    It is always a good idea to carry Workers’ Compensation insurance when you have employees. While you may not be statutorily required to provide it, you are financially responsible for any employee that is injured during the course of the job.

    Q. Who must carry Workers’ Compensation Insurance in the State of Florida?

    Any non-construction employer that employs four or more part or full time employees is required to provide Workers’ Compensation insurance.  Any construction employer that employs one or more part or full time employee is required to provide Workers’ Compensation insurance. This includes corporate officers.


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    Q. What is the Merchant Marine Act of 1920/Jones Act?

    The Jones Act is one of the three legal pillars of the modern United States Merchant Marine.  A cabotage law, the Jones Act requires that all merchandise transported between two ports within the jurisdiction of the United States be carried by a U.S.-flag vessel, built in the United States, owned by a U.S. citizen and crewed by American merchant mariners. This prevents the use of a foreign ship to trade between two ports in the United States.

    Q. What is the Federal Employers’ Liability Act?

    This law applies principally to employees of railroads.  Rather than being a compensation act, with specific benefits, this law provides the framework for suits brought by the employee against the employer. The law gives employees access to damages by taking away the primary common law defenses of the employer.  The Merchant Marine Act of 1920 (Jones Act) amended the Federal Employers’ Act to bring within its jurisdiction seamen aboard ships flying the U.S. flag.

    Q. What is the U.S. Longshore and Harbor Workers’ Compensation Act

    This is a federal compensation law applying to stevedores, longshoremen, workers repairing and outfitting ships for sea and other employees whose duties are related to loading, unloading, repairing or building vessels.  Scheduled benefits as under state compensation laws, apply.  Coverage for the USL&H Act is often included in a Florida Workers’ Compensation and Employers Liability Policy, even though no hazard may be known to exist.  The reason for such action is that an employee might incidentally go aboard a vessel to perform a service or otherwise have an association with a vessel near navigable waters, and if injured, might seek the jurisdiction of the USL&H Act (its benefits being generally broader than those under state laws).


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