There are approximately 600 employment classifications called workers compensation class codes.
Workers Compensation Class Codes are created by the National Council on Compensation Insurance (NCCI).
NCCI reviews statewide claims data each year and suggests potential rate adjustments to the Florida Office of Insurance Regulation.
Based on this annual recommendation, the State will make adjustments to each class code as needed for insurance companies to adhere to.
How to determined you workers compensation premium: Divide your payroll by $100.00 and multiply by the appropriate rate per class code.
Example: Air Conditioning Company WC Code: 5537
WC Rate: $6.92 Annual Payroll is $60,000/$100 = $600 X 6.92 = $4,152 annual WC premium.
An Employer can reduce their workers compensation premiums by applying the following factors to their policy.
Establish a Safety Program: 2% Reduction in Premium
Implement an Employee Drug Free Program: 5% Reduction in Premium
Add a Deductible to Your Workers Compensation Policy: The WC insurance carrier makes the medical payment for an injured worker and bills the employer up to the deductible amount.
Monitor your Experience Modification Factor (MOD): Your MOD is a rolling 4 year look back calculation of workers compensation claims in relation to your premium. Each anniversary period the prior year is added to the calculation and the 4th year falls off. Your WC policy must be over $10,000 in premium for the last 2 years to establish a MOD. MODs start at 1.0 and can be as low as .75. If your MOD is .75, you are receiving a 25% discount off your premium.
Apply for the Florida Contracting Classification Premium Adjustment: Available for employers that are in the construction trades. The discount can average about 5%.
Dividend Plan: Request your agent to market their insurance carriers for a dividend plan. This type of plan allows employers to share with the insurance company in the profitability of their account. Depending on how well the employer was able to minimize their claims, the insurance carrier will reimburse the employer a percentage amount times the amount of premium paid for the year.
One of the most common types of Dividend Plans is called a Sliding Scale Dividend like the one Illustrated below.
Feel free to contact Dave Johnson at the Southern Insurance Group to learn more about workers compensation options!
239-839-4728
Sliding Scale Dividend Illustration
Loss Ratio Return of Premium
| 0% | Indicated Dividend 20.0% |
| .1 to 7.5% | Indicated Dividend 20.0% |
| 7.6 to 12.5% | Indicated Dividend 18.0% |
| 12.6 to 17.5% | Indicated Dividend 15.0% |
| 17.6 to 22.5% | Indicated Dividend 14.0% |
| 22.6 to 27.5% | Indicated Dividend 11.0% |
| 27.6 to 32.5% | Indicated Dividend 8.0% |
| 32.6 to 37.5% | Indicated Dividend 7.0% |
| 37.6 to 42.5% | Indicated Dividend 5.0% |
| 42.6 to 45.0% | Indicated Dividend 1.0% |
| Over 45% Loss Ratio | 0% |
