How to Calculate Workers’ Compensation Cost Per Employee
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Calculating the price of a worker’s compensation policy for a single employee is simple: you will just need information about the employee’s payroll and the rate of insurance that accompanies their job and industry. Businesses shouldn’t feel daunted by the prospect of figuring out the price of their worker’s compensation policies—they can simply visit NPN Brokers’ website, enter some basic information, and receive a quote within a few minutes. If you are a business in Florida that is interested in learning more about how you can calculate the cost of your worker’s compensation policy and how Florida worker’s compensation insurance brokers at NPN Brokers can help you get a quote on a policy, continue reading.
Calculating the Cost of an Employee’s Worker’s Compensation Policy
The cost of a worker’s compensation policy for one employee will be determined by two main factors: the employee’s payroll and the worker’s compensation insurance rate. An employee’s payroll will be used to calculate the amount that their employer will pay for their policy, regardless of whether they work full-time, part-time, seasonally, or otherwise.
The rate of an employee’s policy is determined by a few factors: the level of risk that is associated with their job and the company’s “experience modification factor.” Industries that are risky carry higher rates since they are more likely to result in an injury and therefore a worker’s compensation claim. All jobs are classified by a classification code determined by the National Council of Compensation Insurance (also known as the NCCI). In Florida, jobs that are in the construction industry and its related industries can expect to pay more for worker’s compensation policies since those jobs are more likely to result in injuries for employees. Those types of businesses will typically use a workers’ compensation policy for construction sub-contractors.
An experience modification factor is a number the represents the company’s history of loss in comparison with the average amount of loss for their industry. It is determined by the worker’s compensation claims that a business has made in the past—both the number and the severity of the claims are taken into account in an experience modification factor. An experience modification factor also takes the amount of time that a business has been in operation into account. Businesses that have been operating for less than three years usually have to pay more for their worker’s compensation policies.
To calculate the rate that an employee can expect to pay for a worker’s compensation policy, they can divide their payroll by 100 and then multiply that number by their rate.
What You Pay for in a Worker’s Compensation Policy in Florida
Worker’s compensation policies are beneficial for both employers and employees—they ensure that employees that are injured on the job have their medical costs and lost wages covered and they protect employers from lawsuits following employee injuries.
For employees that are injured while they are working, the main cost that worker’s compensation policies cover is medical costs. Medical costs that are covered with a worker’s compensation policy include prescription medications, physical and occupational therapy, hospital stays, appointments with doctors and specialists, and medical equipment. The other cost that worker’s compensation policies cover for employees that are injured while they are working is wages that are lost due to employees’ inability to go to work. If an employee is killed while they are working, their family will be able to receive death benefits. Death benefits include funeral costs (up to $7,500) and money for dependents.
If employees inflict injuries upon themselves, suffer from an injury because they were neglecting to wear the proper safety equipment, or suffer from an injury because they were intoxicated or under the influence of a substance, they will not be able to receive benefits through their worker’s compensation policy. Employees that have worker’s compensation policies should note that they are subject to a statute of limitations for filing claims that lasts for two years following their injury. Employees that were minors, mentally impaired, or misled about the details of their policies at the time of their injury will be able to benefit from an extended statute of limitations.
Employers should note that they can face severe penalties for not having workers’ compensation insurance policies for their employees. If an employer fails to get a worker’s compensation policy for employees and they are injured on the job, the employee is able to file a lawsuit for damages associated with their injury, including medical bills, lost wages, and pain and suffering. Other possible penalties include fines issued by the State of Florida and a stop-work order that will require them to cease all business operations until they get policies for employees.
Getting a Quote on a Worker’s Compensation Policy
Employers that would like a worker’s compensation policy quote for their employees can go to NPN Brokers’ website and enter basic information about their business, the industry they do work in, and their employees. After submitting this information, employers will receive a quote on a policy in merely minutes. Employers that are satisfied with their quote can bind it in less than 48 hours. NPN Brokers offers policies that can be paid as they go, with maximum flexibility.
Worker’s Compensation Insurance Broker Serving Florida Businesses
NPN Brokers understands that businesses in Florida want access to good worker’s compensation policies for their employees. We know that businesses are seeking fast quotes and policies that they can afford. Our Florida workers’ compensation insurance brokers are available to discuss rates with business owners and employees at any time. Call us at (866) 340-9120 as soon as possible to learn more about getting the policy that is right for you and your employees.