Workers comp protects your business from liability if an employee is injured in the workplace and covers you against unexpected expenses. Although you can take safety measures to reduce the risk of workplace injuries or illnesses, a workman’s comp is still essential because an incident may still occur.
The cover protects you from financial bankruptcy when a catastrophic injury happens. If you are in Florida, the state mandates that every company with a specific minimum number of employees should carry a worker’s comp cover. For instance, companies in agriculture with at least six regular employees, one in construction companies, and four in other fields should have the cover.
However, some companies fail to carry the cover, choosing to risk it. As tempting as this may be, it can end your business because the state severely punishes violators. Here are some repercussions for not having workers’ comp insurance in Florida.
1. Hefty Fines
The state has investigators who conduct inspections at job sites. They look around your business and even talk to employees. In addition, they have the power to check your business records and even issue subpoenas if they feel you are violating the law on workers’ comp insurance in Florida.
In Florida, the fine for noncompliance is double what you would have incurred if you had paid for workers comp premiums for the amount of time you stayed without the policy in the last two years or a minimum amount of $1,000, whichever is greater.
In addition, you incur an additional $5,000 fee for every worker you have falsely declared as an independent contractor. These fines and fees can significantly impede your business. However, getting a cover minimizes the chance of such financial burdens, especially if you find an affordable cover.
2. Stop-Work Orders
Besides the severe fines and fees, you can also get stop work orders for not having workers comp insurance in Florida. When the state’s investigator issues a fine, they also issue a stop-work order to force your business to comply with the law. The order forces you to cease all business operations at your workplace until you become compliant with state laws.
Lost productivity damages your company’s reputation, destroys your net income, and, in extreme cases, causes permanent business closure. Before it gets to this, it is advisable to get a workers comp policy that is within your budget.
3. Civil Lawsuits
Another thing that happens for failing to have workers comp insurance in Florida is facing civil lawsuits. Any employee injured in the workplace and the course of employment must go through the worker’s comp system. The system gives them the certainty of their well-being in case of a workplace-related injury or illness.
Without the policy, an injured employee can sue you. A jury will then decide how much compensation they deserve, an amount that’s typically larger than what is in the workers’ comp system. As a result, your finances are hit twice through legal fees and large settlement amounts.
Skipping workers comp insurance in Florida is something every business should avoid. These punishments accorded violators can have a significant negative impact on your business and may lead to the permanent cessation of operations.