What is the Governing Class Code for Worker’s Compensation in Florida?
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Prices of worker’s compensation policies in Florida are determined by the class codes of each profession. The codes are used to express the level of risk associated with each profession and are set by the National Council on Compensation Insurance, also known as the NCCI. If you are a business that has worker’s compensation or is interested in getting it, keep reading to learn more about the class codes that are used to price policies and how you can get a quote from Florida worker’s compensation insurance broker NPN Brokers.
Florida Worker’s Compensation Insurance Class Codes are Determined by NCCI
In Florida, class codes are used to determine the risks for each type of employee. Each code is connected to an insurance rate that represents the risk of a workplace accident—jobs that are riskier carry higher rates of insurance. Employees that work in offices, for example, have class codes that carry insurance rates that are much lower than the prices connected to class codes for employees in the construction industry. When determining the price of a policy, the rate attached to a class code, along with what is known as the “experience modification factor” is used to find the final rate.
Florida uses a class code classification system that was determined by the NCCI, which is an independent “Advisory Organization.” The NCCI creates worker’s compensation class codes by examining data for each group of employee classification and then gives their recommendations for insurance rates to the Florida Office of Insurance Regulation. The rates are then used by insurance carriers.
The NCCI collects data on millions of worker’s compensation policies and policy claims. Aside from determining the rates of worker’s compensation insurance policies, they do cost analysis of legislation and regulatory decisions regarding worker’s compensation, do research on injury liability, and analyze industry trends. The NCCI is also responsible for publishing materials that inform employers about the classification system that is used in Florida.
Common Class Codes in Florida
There are more than 600 class codes. The following are class codes for types of employees that are common in Florida:
- 3507 – Construction or Agricultural Machinery Manufacturing
- 5348 – Stone, Mosaic or Terrazzo or Ceramic Tile Work – Inside
- 5223 – Swimming Pool Construction – Not Iron or Steel
- 5506 – Street or Road Construction: Paving or Repaving
- 5606 – Contractor – Construction Supervisor
- 6400 – Metal Fence Construction
- 5551 – Roofing
- 9052 – Hotel: Restaurant Employees
- 8209 – Vegetable Packing
- 0113 – Farm: Fish Hatchery
- 9083 – Fast Food Restaurant
- 8380 – Auto Service/Repair Center
How Worker’s Compensation Policies are Priced
There are many factors that go into the price of a worker’s compensation policy. First, the manual premium (the price associated with each type of employment that is connected to the class code) is taken into account. (The manual premium is given at a rate per $100 of an employee’s pay.)
The manual premium is then multiplied by the company’s experience modification factor (this is also known as an X-mod). The experience modification factor determines whether an employer’s risk of employee injury is higher or lower than average. Companies that have filed many worker’s compensation claims in the past have a higher experience modification factor, as do companies that have been newly founded. The data used to determine a company’s experience modification factor is gathered from the 3 most recent policy periods before the most recent one.
Employers that qualify for credits can receive lower insurance rates. These credits are the Safety Credit, the Drug-Free Credit, and the Florida Contracting Classification Premium Adjustment Program. Other adjustments can also be made after the manual premium and the experience modification factor are taken into account—these may be the Premium Discount, the Expense Constant, and certain fees. The amount after these adjustments are made is known as the “Total Estimated Annual Premium,” which is the rate that is billed to employers for the policies that they buy.
After the insurance policy has been bought, the policy will be audited to make sure that it is proportional to the payroll. Employers should be aware of potential incentives from their insurance provider if they effectively control losses.
Get a Quote on a Worker’s Compensation Policy Today
Most companies, though not all, are required to have worker’s compensation insurance in Florida. Whether or not your company will need worker’s compensation insurance depends on the amount of people you employ and the industry you work in. If you work in the construction industry or a construction-related industry, you will need worker’s compensation insurance if you employ one person.
The penalties for not having worker’s compensation insurance are severe. If your company meets the criteria for needing to have worker’s compensation insurance, failing to have it can result in major fines or a stop-work order. It’s also important to note that worker’s compensation policies ensure that employees get compensated for injuries but they also protect employers from lawsuits from injured employees. Not having a policy makes you susceptible to lawsuits.
The best thing you can do to protect yourself from fines and legal trouble is to get a worker’s compensation policy as soon as possible. It’s easy to get a quote if you visit NPN Brokers’ website and enter some basic information. We’ll get a quote back to you in a few minutes.
Contact NPN Brokers for a Worker’s Compensation Insurance Quote Today
Understanding the prices attached to worker’s compensation policies doesn’t have to be difficult. If you are a company that is seeking a good worker’s compensation policy but is discouraged by the price, know that NPN Brokers is available to help you secure a policy that is affordable. You can visit our website if you would like a quote on a policy, or call us at (866) 340-9120 for more information.