In the state of Florida there are three premium credits available to employers to reduce the cost of workers’ compensation insurance. To receive these credits the employer must establish these programs within their business and apply for them through their insurance carrier. These credits have to be reapplied for each year through the carrier to be awarded the credits.

The first credit is a “Safety Program Premium Credit” which saves 2% of the total premium. This credit is available for employers who have certified that they have established a workplace safety program that satisfies the requirements of Section 440.1025 of the Florida Statues. It also should be noted that this program could save you from incidents resulting in claims that could increase your premium in the future years and has the potential to minimize your premium for having minimal claims.

Another 5% credit could be established for developing a “Drug Free Workplace”. This credit is applied to the insured’s policy pro rata as of the date of receipt of certification by the carrier.

The third credit available is for companies that perform landscaping duties under the class code 0042. This credit is called the “Florida Contracting Premium Adjustment Program” or FCCPAP. Payroll must be composed of wages greater than $10.00 per hour to qualify for this credit that can range anywhere between 5% and 25%.

Please click here to download these premium credit forms.

Yesterday, the Florida Insurance Commissioner Kevin McCarty issued a final order approving the new workers’ compensation rates for Florida that will be effective January 1st, 2009. The National Council on Compensation Insurance (NCCI) submits proposals to the state whenever rate changes are needed. The state of Florida reviews these proposals and issues new rates.

The new workers’ compensation rates in Florida will be reduced by an average of 18.6, which is even lower than the 14.1 percent proposed by NCCI. This is great news for business owners (estimated to save businesses $610 million this year) and it demonstrates the improvements in Florida’s comp market since the 2003 legislative reforms. At that time, Florida had the highest rates in the country on workers’ compensation and now it is no longer even in the top ten states. This will be the sixth reduction in rates since 2003 with a total impact of more than 60 percent. The current rates on workers compensation are still in effect for landscapers until January 1st and we will let you know the specifics rates for your industry as we approach that date.

This could potentially be the last rate decrease, as a recent Florida Supreme Court case (Murray vs. Mariners Health/Ace USA) was recently ruled in favor of increasing lawyers fees. Capping these fees was one of the biggest causes of decreased rates in that 2003 reform. The impact of this ruling on rates is still unkown and will be seen over the upcoming years. In the meanwhile, enjoy the reduced rates. If you would like a workers’ compensation quote for your landscaping business, please click the ‘Get an Insurance Quote’ tab in the menu at the top of our webpage.

Dividend plans are used on workers’ compensation policies as a way to lower premium. Since the Florida workers’ compensation rates are determined by the Office of Insurance Regulation, it is hard for many insurance carriers to compete with each other on price. One way in which they can do this is through dividend plans.

Dividend plans are also a great way a great way to align to goals of the insurance company and the insured business to prevent and control workers compensation claims. These plans motivate employers to keep a safe working environment and to manage risks for their employees. In return for successfully accomplishing this goal, employers are returned a percentage of their premium after the policy period. Many workers compensation carriers will offer dividend plans to insureds that have surpassed a minimum premium amount and have minimized their losses. Dividend plans are a great opportunity for landscaping businesses to lower their insurance expenses because a large portion of their premium dollars goes to this line of insurance. We have access to carriers that offer dividends that will return up to 40% of the premium to your company if claims are prevented for an entire policy period.

The two most common types of dividend plans available are a flat-dividend plan and a sliding-scale dividend plan. A flat-dividend plan returns a flat percentage of the premium back to the eligible policies. Under a sliding-scale dividend plan, the size of the dividend returned depends on the insured’s loss ratio. The lower the loss ratio is at the expiration date; the higher the dividend payment will be.

It is important to point out that dividends cannot be guaranteed. Dividends are not paid out until the end of the policy and the rate has to be declared by the insurer’s board of directors. The board of directors occasionally will reduce dividends and also has the ability to declare no dividends at all. This is why it is important to look at the rating or financial strength of the insurance company.

Once again, an employer who implements proper safety training and procedures and manages employee risk will over time minimize losses, which potentially can result very high dividend payouts.

We represent several great workers compensation companies that are offering some wonderful dividend plans and would like the opportunity to offer workers comp quotes to your landscaping business with options of dividend plans. Contact one of our agents or complete our easy online form so we can get started on your quotes today.

The past couple of days I attended a seminar put on by Zenith Insurance Company for Florida agents. Zenith did a great job of really explaining their philosophy on worker compensation and let us agents attending really dive into their operations. Zenith really impressed me on the value they offer for their insured’s. Several times they mentioned, quite proudly, that they will never be the cheapest in price among workers compensation companies. Their model will never be able to compete with the low cost carriers, but they do not even want to be in the same category as some of the price leaders in the industry.

However, coming along with the slightly higher premium comes a multitude of value added services that really can save you on the back end. Zenith prides themselves in the service they provide and the savings they create. Unfortunately accidents happen and Zenith understands that. Where Zenith really makes there name is in the value added services that keep your company running and minimizing the damage done from an accident. The premium may not be the cheapest on the front end, but they make up for it and much more on the back end savings. Zenith will be one of the industry leaders in managing and settling claims, exposing fraud, returning employees to work, and improving your experience mod.

Check out some of the resources Zenith offers to employers on their website.

In Florida, the rates and classifications of employees are established by the Division of Workers’ Compensation in the Department of Financial Services. This governmental agency consults with the National Council on Compensation Insurance (NCCI) to revise the rates and classifications each year. Currently, the rates for workers’ compensation have been reduced by 50% below what they were in 2004.

In Florida, there are four classification codes that apply to landscaping businesses depending on the type of landscaping work that is done. I wrote about this subject in another article and you can read more details about these Florida workers’ compensation codes below:

0042 - This classification code is applied to businesses that are primarily engaged in installing landscapes. The classification includes planning, clearing, grading and planting necessary for landscaping operations. It also includes the installation of sod. The clearing and grading done by these insureds is of the fine type necessary for finishing operations and does not result in changes to the contour of the land. This classification cannot be used in Florida along with the class code 9102 unless the operations are conducted as a separate and distinct business. The Florida rate for this classification in 2007 was 10.67 and in 2008 it is now 8.70 dollars for every 100 dollars of remuneration.

9102 - This classification code is assigned to insureds engaged in the lawn maintenance business. Code 9102 is also applied to all employees engaged in the operation of public parks. For landscapers, the essential difference between the application of Code 0042 and Code 9102 is that Code 0042 applies to work involving new landscaping installations whereas Code 9102 applies to work involving the maintenance of existing landscaping and/or lawn maintenance. Insureds that perform maintenance of lawns, grounds, and gardens include work that may involve lawn mowing, raking, application of liquid or granular fertilizer, spraying and trimming of shrubs or small trees from the ground, and thatching or aerating. The Florida rate for this classification in 2007 was 5.84 and in 2008 it is now 4.86 dollars for every 100 dollars of remuneration.

0106 - This classification code is applied to employees and businesses that prune and trim trees from above the ground. This code is applicable by job site to tree pruning contracts requiring any above-ground level work and it also applies to the whole contract including, but not limited to, chipping and cleanup activities regardless of whether or not a separate contract is written for tree pruning or lawn maintenance and another contract is written for chipping or cleanup. Incidental tree removal on a developed site conducted in connection with tree pruning, spraying, and repairing operations is also assigned to Code 0106. This classification includes risks contracting exclusively to remove immediate tree hazards due to natural catastrophes. Tree hazard cleanup may involve removing dead trees; trees or branches that are leaning on trees, power lines, or other structures; trees with broken or cracked stems; or large, dead or broken limbs that are still attached to a tree. The Florida rate for this classification in 2007 was 21.23 and in 2008 it is now 15.96 dollars for every 100 dollars of remuneration.

5183 - This classification code is applied to employees and businesses that are engaged in plumbing work that is otherwise unclassified by the Basic Manual. For landscapers, this code is used for installation of underground lawn sprinkler systems. Trenching work performed by the same contractor engaged in the installation of underground pipes for sprinkler systems is assigned to this classification since trenching work is an integral part of the underground sprinkler installation work. Such operations may be performed using either a vibrating plow or a pipe pulling machine, which knives the ground to a depth of 12 to 18 inches and to a width comparable to that of the piping being used. The piping is then automatically inserted into the ground. The Florida rate for this classification in 2007 was 8.13 and in 2008 it is now 6.75 dollars for every 100 dollars of remuneration.

The employees and operations of most landscaping businesses are classified into the codes listed above. Depending on the nature of work performed, other classification codes may apply to the business. Code 8810 is used for employees that only do clerical work and 8742 is used for those employees that only have sales duties. If you would like more information about these classifications or information on how your own employees should be classified, please do not hesitate to contact our office or request a workers’ compensation quote online.

In Florida, workers’ compensation insurance is provided by insurance carriers, but the coverage terms and rates are dictated by the state. The coverage terms are listed under Chapter 440 of the Florida Statutes, which states that businesses need to provide workers’ compensation insurance for their employees if:

• The business is in an industry other than construction and it has four (4) or more employees, full-time or part-time (Corporate officers that have correctly filed exemptions with the state do not count as employees).
• The business is in the construction industry and you have one (1) or more employees (Corporate officers that have correctly filed exemptions with the state or a member of a limited liability company do not count as employees).

For landscapers, this means that if your business installs sod or plants trees, then it is considered to be in the construction industry and you need to carry workers’ compensation insurance if you have 1 or more employees. If your business only does lawn care and other landscape maintenance activities, or if your business trims trees, then you are required by law to provide workers’ compensation insurance when you have 4 or more employees.

I highly recommend that you provide workers’ compensation for your employees even when you are not required to do so by law. There are many advantages for this, but the main one is that by doing so, employees accepting workers’ compensation will waive many of their rights to sue your business for their injury, which often results in much higher costs. This is known as the ‘Great Trade-Off’.

Please keep in mind that BearWise Landscapers has access to over 10 insurance carriers that provide workers’ compensation insurance for Landscapers in Florida. If you need workers compensation insurance or if you currently have workers’ compensation insurance and are interested in obtaining quotes through our program, then we would like the opportunity to give those to you. Please select the ‘Get an Insurance Quote’ link at the top of this page and complete our online form. We look forward to working with your landscaping business.