In the state of Florida workers’ comp starts at 4 employees unless the owner exempts themselves. Then you can have four employees and an exempt officer. This is a common practice many are drawn to but is it the right approach for an officer? Let’s dive into this.
Yes owners can, and many do, exclude themselves from their workers’ comp policy, but there are potential downsides to this that require serious consideration.
Workers Compensation vs The Business Owner
When an officer or owner exempts themselves from the Workers Comp policy it’s usually they have one or two things in mind.
I have medical insurance that will cover it. No need to “double-pay”. Or. I’m not going to file a claim against my own company. Ever.
First off, never say never. Even at a desk, there is a potential for injury. And when the injury occurs, there is a sneaky exclusion in many health insurance policies called “Occupation Accident Exclusion.” Meaning, the cost of whatever treatment you need will come from one of two places, your company’s pocket or your pocket.
This doesn’t mean your premium is going to jump drastically by adding you. Split class codes can be done per employee or officer to match the true extent of the work you perform within your company.
In summation, as with all things insurance, it’s the risk you’re willing to take vs the risk you’re willing to pay for someone else to take and in this case, it’s usually not much up-front when it comes to dollars.