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Pay as You Go Workers Compensation

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Pay as You Go Workers’ Compensation Insurance is designed to allow business owner’s to pay their insurance premium’s monthly instead of in one lump sum. In many cases this can help business owner’s free up cash their business so desperately needs for other more urgent expenses. If you are a business owner who is cash-strapped or you manage a business that is seasonal, a Pay as You Go Option may be just what your business needs.

Pay as You Go

How is Pay as You Go different?

With a traditional Workers’ Compensation Insurance Policy, employers have to estimate their annual payroll and pay 25% of that total for a workers comp deposit. This is typically followed by 3 – 6 monthly installments to the insurance company in order to make up the difference of the premium. If you are a small employer in a less risky class code like clerical, office or a small retail business; your cash-flow may not be impacted by this payment all that much.  If you are in a more risky classification code or your payroll is large, than this 25% payment can be significant. It can cause your cash-flow to be tied up in insurance premium instead of on more immediate business needs like inventory.

How does Pay as You Go Benefit a Business? 

Pay as You Go Workers’ Compensation benefits employers in three main ways:

  1. It allows businesses to pay their premium monthly instead of in one large payment.
  2. It can free up cash flow for more immediate business needs.
  3. It may prevent mid-term audits because both payroll and premiums are calculated monthly instead of yearly.
Monthly Payments

Pay as You Go Workers’ Compensation Insurance Coverage benefits businesses by allowing them to pay premium monthly based on payroll instead of having to pay a 25% up front payment based on premium. In many cases, this is a great option for seasonal businesses like construction, farming or landscaping. These industries sometimes have a hard time forecasting payroll because of the weather and many other factors. If your business deals with these types of issues than Pay Go may be a great option for you and your business.

Frees up Cash

Another benefit of Pay as You Go Workers’ Compensation Insurance is that it frees up cash flow for more immediate business needs. With a traditional Workers Comp policy typically twenty five percent of the premium is due all at once. This is an estimate of your payroll and may be significantly different than your current payroll. This can cause your initial payment to be more or less than what it should be. Now this typically gets ironed out during the end of term payroll, but it still causes your business to either over pay or under pay your premium on the front end.

Prevents Audits

Business owner’s benefit from Pay Go Workers’ Compensation Coverage because it can  prevent audits from happening more frequently than are necessary. An end of term audit still happens, but Pay Go prevents audits from happening mid-term.  With the monthly payment format there is less risk of over or underpaying the premium.

Winter Driving Safety Tips

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Every Winter when temperatures dip and snow and ice begin to come down, businesses are forced to make hard decisions about when and how they will have their employees operating motor vehicles.  In some parts of the country, not driving in icy conditions is simply not an option. Unless the business can deal with minimal operations for an extended portion of the Winter. For that reason, it is extremely important to prepare your staff to deal with the risks your business faces out on the roads.  Here are several tips to help you get to where your going safe and sound.


Adequately Maintain your Vehicles

Proper maintenance should be done to all vehicles in the fall before the temperatures drop. Having a mechanic on staff or a dependable mechanic that you trust is important. This mechanic should be able to help you determine how much anti-freeze your vehicles need for the conditions you face in your area, whether you need to switch to winter tires and if you need to keep chains available for the vehicles you use.

Have a few staff members monitoring the Weather

Keeping an eye on the weather forecast is important during the Winter Months.  It is important to have more than one employee who is responsible for monitoring the conditions and for them to know what conditions are simply too treacherous for your staff to be out in their vehicles. It is important to have more than one employee responsible for this activity because employees call in sick, go on vacation and leave your organization. it is important not to be stuck in a situation where you are not available and the staff does not know who is in charge of monitoring the conditions.

Drive Slowly

The only way to drive safely on ice is to go slow. Having four wheel drive vehicles may help your staff get out of a ditch after they have run off the road, but it will not prevent slipping on ice. Driving slowly and giving yourself plenty of distance is always the best way to drive when you are dealing with snow and ice.

Procedures for when an Employee is Stuck

When an employee is stuck somewhere for some reason, it is beneficial for them to have a Winter Safety Kit in the vehicle with them. Many sporting goods stores have most of the supplies you may need to keep handy. An emergency sleeping bag or at least a blanket should be available. Some snacks and bottled water are a good idea as well. A shovel, an ice scraper and other tools may be beneficial to help get them out of many situations.

Stay Home

The best way to prevent having to use any of these tips is to stay off the roads and do not drive unless you absolutely have to.





Snow Removal

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Ensuring Adequate Insurance Coverage for Your Snow Removal Business

The Snow Removal Businesses have a certain amount of risk associated with the nature of the business.  The risks are unique to both the health and safety of your employees, the maintenance of your equipment, as well as the risks the business faces towards outside third parties.  Because of those unique risks, it is especially important for snow removal business owners to speak long and honestly with their insurance agent about the activities the business does and does not partake in on a daily basis.

Tractor being used as a part of a snow removal business.

Here are four insurance policies that are essential to protect your business if you are working in the snow removal industry

1. General Liability

General liability Insurance is a type of coverage that will protect your business from the liability it faces to third parties you and your employees come in contact with. It will cover both bodily injury and property damage that occurs because of the actions of your organization.

2. Workers’ Compensation

Depending upon which state you operate in, the classification your business is place in and the number of employees you have; a snow removal business is more than likely required by law to carry workers’ compensation coverage.  A workers comp policy is commonly referred to as the ‘Exclusive Remedy’ because it covers your employees for injuries that occur on the job while giving the business owner the confidence to know they cannot be sued for injuries that occur as a part of normal business operations.  Because of the nature of the work in the snow removal business, employee s are exposed to extremely cold temperatures every time they are working for the business.  For this reason, it is important to secure work comp coverage regardless of whether it is required in your state or not.  It can be the ‘exclusive remedy’ that can protect business while providing proper care for your injured employees.

3. Commercial Auto / Hired and Non-Owned Auto

Commercial Auto Insurance is needed for businesses who own vehicles to operate the snow removal process for the business. If your business uses leased vehicles or you have contractors and employees who use their own vehicles, you will need to obtain a separate policy called Hired and Non-Owned Auto Insurance.  Hired and non-owned auto coverage will cover the liability your business faces to the damage of other vehicles or the property of third parties.  The damage that is caused to your employee’s personal vehicle will be covered by your employee’s personal auto policy.

4. Inland Marine

A Commercial Auto Policy will cover the vehicle your employee is operating, but it will not cover the trailer or any equipment being transported on the trailer. Inland Marine Coverage will protect all of your specialized equipment while it is in transit on a trailer or in use off premise.  Taking some additional time to speak with your agent and to do an adequate inventory of your equipment can go a long way towards properly insuring all of your businesses equipment.



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Workers Compensation Concerns for Construction Businesses

In the Construction Industry there are many risks your business faces in relation to the health and well-being of your employees. Carpenters typically perform construction work on both the interior and exterior of properties. Now the exposures vary depending upon the size and nature of the job. Injuries due to cutting, sawing and hammering can be frequent and severe. For this reason, it is extremely important for a Construction Business Owner to partner with an experienced independent insurance agent with whom they trust. It is equally important to have an extended conversation about exactly what it is your employees do and do not do on a daily basis.

Construction Hammer and Nails lying on the floor.

There are many types of common injuries employees experience in the construction industry.  Electrical burns can occur while installing electrical work. The potential injury due to falls from heights is higher than in other industries. If you do or do not work on roofs, than you need to tell your agent. Remember, the agent is in the business of analyzing risk. If you do not tell them exactly what you do or do not do, it is in their best interest to always assume more risk. This can cause your business to pay additional premium for workers compensation coverage. Now this mistake usually gets cleared up at the end of term audit, but regardless of whether you under or over paid for coverage, it can negatively impact your business. In a worst case scenario it can cause your business to have a claim not be covered by your carrier. For this reason, it cannot be stressed enough to take an appropriate amount of time to make sure your agent is placing your business properly for the activities your business partakes in.

 Constrution workers, working outdoors.

Additional Insurance Programs for a Construction Company

  • General Liability
  • Property Insurance
  • Commercial Auto

General Liability for Construction Businesses

In relation to General Liability Coverage, job-site exposures vary based on the work being done, whether the work is underground or at heights, and whether it is inside or outside.  Careful attention must be paid to the type of brick as well as to the mix of the mortar being used ont he project. Strict process need to be in place to ensure all specifications are followed and changes are only made with proper permission. .

Construction Property Insurance

Commercial Property Insurance Exposures may occur both at the carpenter’s own location and out on the job site. These can include an office where there is storage of materials, equipment and vehicles. If the carpentry business owns the building then commercial property insurance should be purchased. Business personal property can also be covered for furniture and other assets that stay at the primary location.

Commercial Auto for Construction

In the construction industry, Commercial Automobile Insurance Exposures are generally limited to transporting workers, equipment and supplies to and from the job site.  There is a definite need to monitor driving records of all employees who will be operating a company owned vehicle. You also need to be mindful of the age of the vehicle as well as the condition and maintenance of all vehicles used by employees.


Restaurant Workers Compensation Insurance

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Common Workers Comp Risks Faced by a Restaurant

The Restaurant Industry is a service based industry and there is an extreme amount of contact with the public. Most businesses that operate in a service based industry tend to have a larger amount of injuries to their employees, but those injuries tend to be less severe in nature. For instance, businesses like construction, roofing or floor installation have less claims, but those claims tend to be more severe because of the nature of the work. Because of the amount of contact directly with the public, employees are exposed to a large amount of risks that can cause an increase in workers compensation claims. Luckily those incidents tend to be less severe in nature, but the need to address these risks is high for business owners and managers in the restaurant industry.

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Restaurant Workers Compensation Coverage

Workers Compensations Liability, like in many industries, primarily results from slips, trips, and falls. These incidents typically result as a result of frequent interactions with customers. Cuts and burns happen with an elevated amount of frequency for kitchen staff. There are also extensive risks relating to back injuries that occur as a result of awkward lifting. Extensive training related to safety procedures is a must to keep incidents to a minimum and the rate of workers compensation insurance premium low. Having a well-documented safety program that includes a detailed return to work program can help immensely if your restaurant has a severe injury to an employee or if you have several claims during a particular term. In an industry that works with the public as much as the restaurant industry does, there are going to be accidents and injuries. When those incidents occur, if you have these safety programs in place and they are documented, your agent can show your insurance carrier that the incidents are more of an outlier and not indicitive of how your business will perform in the future. This can prevent or at least limit the amount your premium will rise after a term when you have a severe or several claims.

Because employees in most restaurants are low-wage earners, staff turnover is often high. Well-trained employees with an incentive to do their best have the fewest accidents. These employees have even fewer accidents when they receive clear direction from management. There are many ways to develop incentives to get your employees involved in a  safe work culture.  Company incentives to encourage long-term employment are positive signs of good management and a focus on employee retention can help you save when purchasing commercial insurance.

Birds Eye View of a Restaurant


Common Restaurant Workers Compensation Class Codes:

  • 9082: Restaurants
  • 9083: Restaurants—Fast Food Service
  • 9084: Bar, Pub, Tavern and Nightclub


Key Terms for Workers Compensation Insurance

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7 terms to familiarize yourself with when purchasing Workers Compensation Insurance

Insurance is like many industries, there is a lot of industry jargon. This jargon is hard to understand, even for people who are experienced business owners or even some people who work in the insurance industry. Here are 10 terms that a business owner should familiarize themselves with before renewing any commercial insurance policy. Especially before purchasing or renewing your workers compensation insurance coverage. Here is a list of 10 terms you might will more than likely hear as you talk with your workers compensation insurance agent.


Average Weekly Wage (AWW)

The Average Weekly Wage is a term that is used to determine an employee’s rate of temporary, total, partial disability or permanent total disability. It is usually determined by dividing the employee’s total wages for the previous year by 52. This will be important to have an accurate number and not an estimate. The policy will be audited at the end of the term and the more accurate your numbers are on the front end, the less likely you are to have to pay additional premium at the end of the term.

Date of Injury (DOI)

If the injured employee was hurt as the result of one individual event, the date of injury is the specific date the injury occurred. If the injury was caused by repeated exposures, what most would consider a cumulative injury, this is the date that the worker knew of should have known that the injury was caused by work.

First Report of Injury (FROI) 

Following an on-the-job injury, employers are usually required to file a first report of injury form.  This form should be filed with the proper state administrative agency who oversees workers compensation insurance.

Return to Work (RTW)

Return to work is a part of a businesses safety program that incorporates the injured worker in the business activities even before they are able to return to full time permanent work. This is important because humans are creatures of habit and the longer they stay off the job, the more likely they are to never return to full time employment. When this occurs claims can get out of control and negatively impact your loss ratio. A businesses loss ratio is one of the main factors carriers use to determine how much to charge a business for workers compensation premium.

Loss Ratio

The relationship of incurred losses compared to the earned premiums expressed as a percentage. If, for example, a firm pays $100,000 of premium for workers compensation insurance in a given year, and its insurer pays and reserves $50,000 in claims, the firm’s loss ratio is 50 percent ($50,000 incurred losses/$100,000 earned premiums).



NCCI stands for the National Council for Compensation Insurance. According to their website the mission of NCCI is, ‘To gather data, analyze industry trends, and provide objective insurance rate and loss cost recommendations’. NCCI is currently used by 35 out of 50 states to determine workers compensation premium rates.

Pay as You Go

Pay as You Go Workers Compensation Insurance is designed to allow business owner’s to get coverage in place for less up front costs and pay premium each month based on payroll. With a traditional Workers Comp policy typically twenty five percent of the premium is due all at once. This is the minimum a business can pay to get coverage in place. The rest of the premium is usually paid in nine monthly payments. With the pay as you go option businesses can get coverage in place for as little as a few hundred dollars.  Additionally, business owner’s benefit from Pay Go Workers’ Compensation Coverage because it prevents audits from happening more frequently. An end of term audit still happens, but Pay Go prevents audits from happening more frequently and makes the difference owed much smaller. With the monthly payment format there is less risk of over or underpaying the premium.




Unique Workers Comp Risks

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10 Industries with Unique Workers Comp Risks

Workers Compensation Insurance Coverage is the ‘Exclusive Remedy’ that helps employers and employees sleep soundly at night. They both can sleep soundly at night because the ‘Exclusive Remedy’ allows organization to work in a way that both employers and employees have protection if an employee is hurt on the job. Employers have the protection of not being sued for injuries that occur as part of normal business duties and employees know they will be covered for medical expenses and some lost wages when they are hurt and not able to work. Now each industry has their own unique workers comp risks when it comes to managing employee safety.



The main type of workers comp risks that restaurants face is from the frequency of traffic walking in and out of their location. Slips, trips and falls are common; but fortunately are not severe when they happen. Interacting with the public can cause employees to get the cold and flu more frequently than workers in other industries.

Food Trucks

Food Trucks are similar in scope to restaurants, but they have some additional workers comp risks restaurants do not face.  The most glaring risk is the driving aspect of the business. When the employees are driving from one location to another they are still the liability of the business. Car accidents have a tendency to be injure employees more frequently and more severely.  With these more severe risks usually comes a higher premium for workers compensation insurance.

Home Health Care

In the Home Health Care Industry, workers comp risks are primarily off-site. Again, driving risks cause for a larger premium as do the risks from having to lift sick and elderly patients. Back injuries are common due to the mobility limitations of many patients. Unruly or unpredictable patients can cause injury or harm including strains, back injuries and contusions. The employee must be able to handle conflicts that may occur during interactions with other family members. All of these risks add to the increase in premium for businesses in this industry.

Roofing Companies

Roofing companies are another industry that has a higher than normal risk. Obviously working at elevation causes them to have risks for severe injury. The physical nature of the job also causes back injuries.

Floor Installers

In the Floor Installation Industry, the workers comp risks vary based upon the size and nature of the work being done. Some risks arise from working with sharp objects and hand tools. Lifting injuries, sprains, strains, hernias and back injuries occur at a fairly high frequency. Long term exposure to working on floors can lead to knee problems. Safety programs and the proper use of safety equipment can go a long way towards helping your business limit injuries and lower what a business pays in insurance premium.

Cable Installation

Cable Installation businesses have many risks that occur off premises. Slips, trips, falls, electrical shock, and lifting injuries are common. Climbing telephone poles can add additional risks and extensive digging can cause injuries to occur as well.  Like many other industries a driving risk is present in the cable installation business. Having some type of driver safety program can help limit excessive claims related to the driving risk associated with this industry.

Lawn Care and Landscaping

Workers compensation exposures in the lawn care and landscaping industry come from the operation of machinery and equipment, including some work at heights, work on uneven ground, and exposure to underground or above ground cables and lines. Since power-cutting equipment is used, there are also potential cuts and possible amputations. Back injuries, hernias, sprains and strains are all common claims. Chemical applications may cause lung problems along with allergic reactions and other more serious complications. Casual labor, seasonal workforce and high turnover present a significant loss control challenge.


Wood Product Manufacturers are a different type of business than most insurance agents are used to partnering with for commercial insurance coverage. Assessing the risk of this industry is much different than assessing the risk of an HVAC or a pest control company. There are more than ten different classification codes just for workers comp risks.  The reasons for the large number of class codes is because of some businesses operating as a manufacturer, others operate as a distributor and others operate as a retailer. These differences can have an enormous impact on what you pay for insurance.  Having a long conversation with your insurance agent can help you prevent any and all potential problems.

Day Care Centers

If you own or operate a day care center you more than likely understand the uniqueness of the workers comprisks associated with this industry. Workers compensation exposures, like in a lot of industries, arise from lifting, slips, tirps and falls. These accidents can cause back injuries, hernias, sprains and strains.  Communicable diseases are another issue, because of the close proximity workers have while they spend enormous amounts of time with children who have weak immune systems and bad hygiene. All employees should have up-to-date immunizations to prevent the spread of communicable diseases. Unauthorized visitors can pose a threat to employees as well as children.

Retail Stores 

Retail stores like, unlike most industries, have a fairly predictable amount and type of workers comp risks. Those risks generally come from employee lifting and ladder usage. Employees should be trained to properly use all common devices. These devices may include ladders and commonly used equipment for lifting. Whatever type of equipment you decide to use, make sure your employees are properly trained in relation to using this equipment.  Equipment used for repair operations should be appropriately maintained to prevent injury.

Cable Installers

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Cable television companies provide television programs to customers over both fiber optic and coaxial cables. They can be provided both digitally and via satellite, but someone must install the equipment that makes these technologies work. This is where companies spring up to provide this needed service for both cable providers and television viewers. Cable Installers are usually employed by cable service providers, but in some instances they are employed as sub-contracted labor. All sub-contract labor is generally required to have specific coverage limits per their agreement with the cable contractor. This is where their workers compensation coverage is a requirement in most states.

Workers Compensation Class Codes - Cable Installers

What are the concerns for cable installers relating to Workers Comp?

The first concern related to workers’ compensation coverage is whether the installer is an employee for a cable provider or whether they are an independent contractor. If they are an employee of the company than the company is responsible for carrying the proper workers compensation coverage for them as an employee. Now if they are a contractor, depending upon the state the installer may need to purchase coverage for themselves and for their business if they have employees working for them. It is important to speak with an independent insurance agent and the proper governing body in the state in which you operate in to make sure you have the proper coverage.

What other insurance might a cable installer need?

  • General Liability
  • Inland Marine Coverage
  • Commercial Auto Insurance
  • Workers Compensation

In most states, workers compensation and general liability are required by law for most businesses. Again it is important to check with the state governing agency to determine what your business is required to carry. In most states this is the department of insurance. Two additional coverages that are beneficial to many cable installers are commercial auto and inland marine coverage. Commercial auto is needed regardless of whether you are driving your own personal car for work or a company owned car. If you do drive your personal car for work than you can get a policy called hired and non-owned auto policy. This will cover the liability the business faces that is not covered by your personal auto policy. An inland marine policy will cover any specialized equipment or tools that you have with you in transit. Because of the remote nature of this work, most of the time the installer is located at a third party site. During the time that the installer is driving from location to location they are at risk of damaging their vehicle and the tools located inside it or any additional equipment attached to a trailer. The problem is that a standard commercial auto policy will not cover additional equipment. It just covers the vehicle. For that reason you may need inland marine coverage. An independent insurance agent can help you determine if you need this coverage, and if so, how much you actually need.

Classification Codes for Cable Installers

Commercial insurance companies use various liability classification systems in order to classify and rate coverage premiums for Cable Installation. Here are the most common business insurance classifications for Cable Installers:

Business Liability Category: TV and Media Installation

SIC Business Insurance Codes:

  • 4841: Cable and Other Pay TV Services

NAICS Liability Classifications:

  • 517110: Wired Telecommunications Carriers
  • 515210: Cable and Other Subscription Programming

Business ISO General Liability:

  • 91315: Cable and Subscription TV Companies

Common Workers Compensation Class Codes:

  • 7536: Cable Installation and Construction
  • 8901: Cable and Telecommunications—Office Employees
  • 7600: Cable TV or Satellite—Other Employees and Drivers
  • 6325: Conduit Construction—for Cables or Wires
  • 8742: Outside Sales Persons


Work Comp Rates are on the Decline

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Many States have Work Comp Rates that are Changing in 2018.  

Work Comp is the only Commercial Insurance Line going down, but most states have rates that are going to decrease significantly in 2018.  The second half of the year, is when the governing body for the workers compensation system in each state makes the decision to set rates on different classification codes. So far in 2017, 36 out of 50 states are deciding to decrease their work comp rates. Several states are seeing significant decreases. According to Business Insurance, 13 states show rate-decrease filings of between 10% and 16.3%.

Work Comp Rates are on the decline in 2018.

Here are a list of several recommendations from NCCI and State governing bodies throughout the US.


The NCCI is recommending a 12.7 percent decrease in rates for 2018. The reason for this significant of a decrease in Colorado is related to ongoing efforts by employers to prevent workplace injuries. Also included in the reasons for the significant decrease in work comp rates is the declining or stabling figures in frequency of claims, duration of claims, severity of injuries and medical costs.


NCCI recommends a 10.9% workers compensation premium rate decrease for Illinois.


The 2017 rate filing, which will impact rates in 2018 is an average reduction of 4.6 percent for work comp rates.

New Mexico

The New Mexico Office of Superintendent of Insurance has announced an average 16percent reduction in workers compensation pure premiums for 2018.

West Virginia     

NCCI recently filing for a 10.3 percent reduction in work comp rates with the state Insurance Commission.


The Idaho Department of Insurance has received a proposal from the NCCI for an overall rate drop of 5.8 percent percent to workers’ compensation insurance. This rate has not yet been approved, but employers can expect a decline in work comp rates.


Montana’s state-mandated workers’ compensation insurance fund has announced it is returning a record $40 million in dividends to most of the businesses and organizations it insures.

Work Comp Rates in 2018 are decreasing in 36 out of 50 states.


The 2017 rate filing by NCCI for workers’ comp shows a decrease of 8.4 percent in the voluntary base rate and a decrease of 7.8 percent for assigned risk workers’ compensation rates. Adding together the rate decreases Kansas business owners saw in 2016, the rates will have dropped 20 percent in the voluntary base rate and 18 percent in the assigned risk rate over the past two years.


NCCI Files 12% Decrease for Tennessee Workers’ Comp Loss Costs, as a result of a decline frequency and severity of claims.


Connecticut has had a recommendation of 14.1 percent reduction on average in the “loss cost” formula which helps determine rates. This rate has not yet been approved, but employers can expect a significant decline in work comp rates.


Washington’s Department of Labor and Industries has recommended a drop of 2.5% in 2018.


NCCI has announced an 8.7 percent average reduction in premiums for Iowa employers beginning in January 2018.


Florida businesses may need help the most because of hurricanes that have ravaged the state and a workers compensation system that has been in flux for the past few years.  NCCI has recommended an average 9.3 percent reduction in workers’ compensation premiums in 2018. This reduction comes after an average increase in 2017 of more than 14 percent.


Oregon workers comp rates are dropping for fifth straight year.  They have actually declined about an average of one-third since 2013.  In 2018, Oregon employers will see a drop by an average of 14 percent, according to the Department of Consumer and Business Services.


Oklahoma will have an average decrease of 16.3 percent for 2018 work comp rates.


Michigan’s Workers’ Compensation System continues to benefit workers and job providers as the state’s pure premium advisory rate for work comp insurance will decrease by 9.3 percent for 2018. This has contributed to a cumulative decrease of 45 percent from 2011-2018, saving Michigan employers an estimated $446 million in workers’ compensation premiums



Florida Work Comp Market still in Flux

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This time the Florida Work Comp Market is benefiting the Business Owners who are getting a 9.6% decrease.

For more than a year now, the Florida Work Comp Market has been unstable to say the least. A year ago the National Council on Compensation Insurance (NCCI) recommended a 14.5percent increase which was eventually approved. This increase was in response to two court cases (Castellanos vs Next Door Company and Westphal vs City of St. Petersburg) and state bill 1402. Most within the insurance industry and the business community predicted the state legislatures would enact measures in the first half of 2017 to stabilize the workers comp system in Florida. Those measures failed and the instability has continued.

Florida Work Comp Market

In response to the lack of response from the Florida Legislature, NCCI has taken steps to stabilize the markets after last years large increase in work comp rates. This years’ recommended decrease includes a statewide average premium decrease of 9.3 percent. NCCI said a large part of the recommended decrease stems from improvement in claim frequency of more than eight percent over the last two years. Because this recommended decrease mostly reflects data that pre-dates the Castellanos and Westphal decisions, it would be wise of insureds to not expect this decreased rate to continue in the future.  Carriers are beginning to receive data relating to the impact of Castellanos and Westphal.  As this data continues to mature business owners can expect carriers to adjust their rates accordingly.

Florida is a state that requires employers to carry workers compensation coverage.  The Florida Office of Insurance Regulation has stated it will review the recommendations by NCCI. They plan to evaluate the impact of this decrease in relation to the insurance marketplace as well as employers. A public hearing to discuss this matter will be conducted in October.

Workers Compensation Insurance in 2017 has been a very changing industry. Especially in the state of Florida and many states are using the issues facing Florida as a cautionary tale to get the system in their state in line.