Your Workers Compensation premium calculation is directly related to the risks associated with your specific operation, your company’s payroll, and your company’s loss history (claims).  A Tree Care company’s rate will be significantly higher than a Retail Store’s rate.  This is due to the higher likelihood of employee injury.  Additionally, your company’s prior claims are reviewed and compared to similar companies.  A factor called your Experience Modifier is created to penalize or reward you by increasing or decreasing your premium.

We have developed the Florida Workers Compensation Premium Estimator to help you better understand your Workers Compensation premium by learning the factors that go into the calculation and how you can begin saving your company money.  Biscayne Risk & Insurance is always available to discuss strategies to reduce your premium.

Florida Workers Compensation insurance premiums are calculated by multiplying the insured employer’s payroll by the rate promulgated by the National Council on Compensation Insurance (NCCI).  The rate corresponds to a job specific class code and is multiplied to each $100 in remuneration.

​For Example, the Fast Food Restaurant classification (9083) maintained a rate of $1.87 per $100 in payroll.  If the estimated payroll was $500,000, the manual premium would be calculated at $9,350, subject to additional factors.

​An Experience Modification Rate is a factor that was developed to compare an insured employer’s actual past loss experience and the expected loss experience of similar companies.  Once calculated by the NCCI, an employer’s Experience Modification Rate is multiplied by the manual premium to tailor the premium cost to the individual employer and provide incentive for loss reduction that would be absent from manual rating alone.  An Experience Modification of greater than 1.0 would be worse than average, while a rate lower than 1.0 would be better than average. 

​Using the example above, if the restaurant with the manual premium of $9,350 had a mod of 0.90, then their premium would be reduced by 10%, and calculated at $8,415, subject to additional taxes and fees. 

There are opportunities for employers to reduce their premium through available policy credits. The Drug-Free Workplace credit affords a 5% premium credit after satisfying requirements of program.  Florida employers that implement a qualified Safety Program are eligible to receive a 2% premium credit.  

​Following on the prior example. If an insured earns a 5% Drug-Free Workplace credit, premium would be reduced to approx $7,994.​

Following the policy period, the insurance company may examine the books of the insured employer to compare the estimated annual payroll, projected prior to policy term, to the actual payroll.  The Workers Compensation carrier may perform the audit in-person or remotely, via phone, mail, or internet.

If the above referenced restaurant projected $500,000 in payroll but actually paid its employees $550,000, there would be an audit additional premium owed to the carrier – in this case $799.

Florida Workers Compensation insurers may offer an insured guaranteed flat dividends or loss sensitive dividends, typically following the policy term.  These dividends can be a set % of premium (typcially 5% to 15%) or based upon a pre-agreed upon loss ratio throughout the term.  Upon successful completion of agreed upon guidelines, the insured will receive a return premium. 

If an insured employer pays $8,793 in premium on policy with 10% flat dividend and meets all eligibility guidelines, they should receive a return of approx $879 following the policy term.

*Workers Compensation policies are subject to additional fees, not contemplated in this example