The good news: It was not a 20 percent rate hike as previously proposed.
The rate hike has had a fraught history since its introduction in May, and needed a revision based largely on two interim court rulings and a Florida Senate bill, but it appears that the rate hike will go into effect on schedule. This is, however, not the end of the story. Naturally, the Florida Chamber of Commerce has a bone to pick with this rate hike and the National Council on Compensation Insurance – which files rate requests on behalf of the insurance industry. However, the lobbyists and lawyers will be going up against a Florida Supreme Court decision that put attorneys’ fees back in play, stating that limits on attorneys’ fees were unconstitutional.
What Does it Mean for Your Business?
As an example, let’s say your business pays $20,000 a year on worker’s compensation insurance. Your premium will increase by about $3000 per year in addition to your general liability and other insurance policies. What the legislature does will depend on how vigorously they are lobbied by various interest groups such as attorneys, business owners, assorted policy nonprofits, industry groups, and their constituents. Legislators are already looking at implementing additional reforms to Florida’s workers compensation laws.
There is, however, some good news. Policies in force will be exempt from the increase, despite NCCI’s recommendation that the premiums be prorated for the remainder of the term. As of this week, the rate increase will only apply to renewing policies or newly issued policies. Eventually, as policies renew, all Florida businesses would have to bear the increase. Naturally, costs will be passed up and down the supply chain until they reach the consumer.
Lean and Mean
There are other ways to make up that extra 15 percent, though it’s going to take some sweat and work. Bundling your insurance policies is a good way to rack up discounts, and talking to your insurance agent about ways to trim your premiums is always a good idea. There are always ways to improve your insurance savings, from modernizing safety equipment, to investing in better security for your premises, and your independent insurance agent can show you the way to lessen the impact of a wedgy to the wallet.
We are not here to point fingers at the insurance industry, or at attorneys. Workers’ compensation insurance fills a vital role in protecting the well-being and interests of people who are doing vital work to keep our homes safe, lights on, and take care of our health and welfare. Workers’ compensation is for everyone – the roofer, the teacher, the police officer, the electrical lineman, and others who do vital work for the rest of us. Nor does anyone who is injured on the job need to be barred overtly or covertly from compensation for that injury, the medical treatment to make them well, or payment for their disability should medicine fail.