Workman’s Comp in Florida: Seeking Advice
Hello everyone,
I’m new to owning a business, and I’ve encountered a requirement for workman’s comp insurance in order to operate at certain marinas where I’m planning to work. This requires me to be a W2 employee, which also means I need to involve a payroll company.
I’ve received a quote for $175 weekly for workman’s comp based on a $520 weekly payroll, along with a $50 administrative fee for each pay period. Altogether, this adds up to nearly $1,000 per month just for workman’s comp, not including general liability insurance.
I’m wondering if there are any strategies to lower these costs. Would switching to bi-weekly pay help? Or could being considered a part-time employee for my own company reduce the expenses? I’d appreciate any advice you might have.
I should also mention that I am currently a full-time W2 employee elsewhere, but that job is unrelated to my business. Thank you!
Starting a business can definitely come with unexpected costs, especially regarding insurance and compliance matters like workers’ compensation. Here are a few suggestions to help manage your expenses:
Understand Your Class Code: Workers’ comp rates can vary greatly depending on the classification code assigned to your business. Make sure that your code accurately reflects your work—it may help to discuss this with your insurance provider to see if there’s a lower rate applicable.
Pay Frequency: Some payroll companies may offer better rates for different pay schedules. Ask if switching to bi-weekly or monthly payments would reduce your costs. Just be aware that some insurance policies calculate premiums based on the payroll estimates, so verify how different payroll methods affect your rates.
Part-Time Employment: Depending on the nature of your business and how you structure your employment, being part-time employed might lower your payroll and thus your workers’ comp costs. However, make sure this approach is compliant with both your state laws and the terms of your insurance policy.
Shop Around: It never hurts to get quotes from multiple workers’ comp insurance providers. Some may offer more competitive rates or different payment structures.
Consider the Benefits of Being a Sole Proprietor: If applicable, you might look into structuring your business as a sole proprietorship or LLC, which can sometimes have different insurance requirements. However, this would mean you wouldn’t have the same protections as a W2 employee.
Loss Control Programs: Some insurers offer discounts for implementing safety programs and training. Investing in safety may reduce your premium in the long run.
Seek Professional Help: Consulting with a business advisor or an insurance broker who specializes in workers’ compensation could provide more tailored strategies based on your specific situation.
Explore Other Insurance Options: If your business is small and relatively low-risk, there may be alternative insurance products, such as a business owner’s policy (BOP), which combines several types of coverage including general liability and workers’ compensation at a potentially lower rate.
It’s essential to thoroughly research your options and ensure that whatever route you take still meets legal requirements for your business operations.