Workers Compensation premiums are on the rise. On October 1st, 2016 Florida business owners could expect to pay 19.6% more for their workers’ compensation coverage. The estimated cost to employers in the state of Florida is expected to exceed $700 million. This has many employers asking why?
In 2003, the state of Florida initiated a major overhaul of the state’s workers’ compensation system when the state legislature passed a statute to limit attorney’s fees in workers compensation cases. The attorney fee cap was later upheld in a 2009 amendment that reinforced this statute. Initiatives such as these helped slash workers compensation premiums by more than 50% in the last 13 years!
However, in April of this year, the Florida Supreme Court ruled that the “attorney fee schedule” set in 2009 was unconstitutional under both the Florida and the U.S. Constitution. This ruling arose out of the court case Castellanos v. Next Door Company. The attorney, in this case, sought fees totaling $37,520, the equivalent of $350/hour. Under the statutorily imposed fee schedule, the attorney was limited to a fee of $164.54, which amounts to less than $2/hour.
With the Supreme Court’s ruling on this case in April, along with two other decisions that negatively impacted work comp rates later in the summer, employers should prepare to pay significantly more for workers compensation policies. Florida business owners are now depending on our legislature to find a solution to the increase.
For employers and insurance advisors the increased costs only emphasize the importance of implementing an effective risk management program. Florida employers, now more than ever, need to partner with educated insurance advisors who can assist in implementing strategies such as: safety meetings & incentives, dividend schedules, return to work programs, drug-free workplaces, claims monitoring and management, and other strategies to mitigate the increased cost of their workers’ compensation programs. All of these strategies can be implemented at little to no cost to the employer.
Florida employers, are you maximizing the savings on your workers’ compensation premiums?
Questions? Call our Office @ 863-385-5171.
Heacock Insurance Lakeland and Sebring, Florida