Worker’s Comp Insurance vs Exemption: What’s the Difference?

Workers comp insurance vs. exemption

When you hire a company to work on your home, a worker’s comp policy protects the company from liability if one of their workers gets injured. Some companies can, and do, file for a worker’s compensation exemption. However, a worker’s comp insurance exemption leaves the company exposed to liability and can threaten your home as well.

In 2018, more than 600 independent contractors suffered fatal injuries on the job, and thousands more suffered bodily harm. Worker’s comp covers the cost related to these kinds of injuries.

For example, it covers medical bills, rehabilitation costs, and lost income. Furthermore, it provides coverage regardless of who the courts find liable for the incident. However, many Florida small business owners opt to forgo the benefit.

It’s important to keep your home clean. However, it’s also vital to make sure you don’t place the home you love at risk.

Let’s learn more about the difference between worker’s comp insurance and worker’s comp exemptions.

The Basics of Worker’s Comp Insurance

If a worker gets hurt on the job, they can file a claim for worker’s compensation. While worker’s comp law provides this protection, it also limits the liability of companies when employees get injured on the job.

In nearly every state, businesses that employ workers must have worker’s comp insurance. As long as a company pays its premium, worker’s comp insurance protects it from the financial losses that one might incur when paying for medical bills for injured workers.

Worker’s compensation law outlines how much employees receive when they are injured. It also establishes what kind of benefits workers receive.

In most instances, worker’s comp law provides employees with two-thirds of their wages as they recover from their injuries. These funds cover expenses such as medical care, as well as compensation for permanent injuries. However, it can also cover the cost of training for a new vocation if needed.

Worker’s comp also provides for an injured employee’s wages while they are unable to work. Most companies with employees who don’t have an ownership interest must have worker’s compensation coverage.

Worker’s Comp Exemptions

If you’ve heard of worker’s comp exemptions, you might be wondering about the difference between worker’s comp exemption vs insurance. In Florida, worker’s compensation is vital for ensuring the security of a business.

In many instances, it’s mandatory. However, some businesses can file for a worker’s compensation exemption.

Worker’s compensation exemption is a complex issue. It’s important to meet the requirements for an exemption. It’s also important to follow the correct procedures to apply for it.

Companies that operate without worker’s compensation expose themselves to liability. Nevertheless, many business owners that can qualify for worker’s comp exemption do just that.

Florida law allows a business owner to exclude the company owners from the state requirement for worker’s comp coverage. The rule only applies to company owners, officers, and directors. Also, a company isn’t required to apply for worker’s comp insurance if they employ no non-owner employees.

A company only needs to file for worker’s compensation exemption if they qualify as an organization that must have coverage. If a business owner does not file for a “Notice of Election to Be Exempt” as required by Florida law, they can receive a fine from the state.

Unfortunately, this exemption also frees contractors to sue anyone they deem liable for damages. If a contractor gets injured in your home, you could find that you’re the target of a lawsuit.

Worker’s Comp Exemption Tips

For this reason, it’s important to make sure that your contractor has worker’s compensation insurance, amongst other coverages. Before allowing a contractor to work on your home, it’s important to ask questions about a contractor’s licensing and insurance. One of the most important questions you can ask a contractor is whether they have worker’s compensation and liability insurance.

Most consumers don’t even think about whether a contractor has worker’s comp. After all, worker’s comp is a business issue for that contractor, or is it?

Even if the contractor creates unsafe work conditions, you could find that you’re liable for their injuries. If an uninsured contractor gets hurt on your property, you can end up paying for their medical expenses.

In some instances, your homeowner’s insurance policy may cover the contractor’s injuries. However, your insurance company will not like the idea of paying the claim. More than likely, they’ll increase your homeowner’s insurance premium.

If you find a contractor that can afford to offer a rock-bottom rate, you will probably find that it’s because they don’t pay for insurances such as worker’s comp, general liability, and property coverage. As a homeowner, it’s not worth it for you to work with this kind of contractor.

An uninsured contractor passes the risk of doing business on to you. Ultimately, you’re gambling with your property when you hire a company that’s uninsured. In the long run, saving money upfront on contract work can end up costing you more than you ever imagined.

Talking to Your Contractor About Insurance

When hiring a contractor, it’s important to ask the tough questions. You must ensure that you’re not liable for injuries or damages if a contractor does work on your home.

If you choose to work with an uninsured contractor, it’s essential to have them sign a “hold harmless” or indemnification agreement. These agreements release you from liability if they are injured while working on your property. Also, make sure to include a provision that this indemnity will continue even if the contractor performs work outside of the original scope of the project.

Finally, it’s a good idea to think about the kind of contractor that skips on insurance. If they’ll take shortcuts with something as important as insurance, how will they handle your project? Ultimately, it’s easier and safer to work with a contractor that’s licensed and insured.

Licensed, Insured, and Ready to Make Your Home Sparkle

Now you know more about how a company’s worker’s comp insurance can affect your relationship with that firm. If you’re in need of cleaning services, Outdoor Extreme Clean is licensed, insured, and ready for the job.

Outdoor Extreme Clean is a full-service mobile pressure and soft wash company that’s ready to beautify your home or business. We’re licensed and fully insured in Florida and the tri-state region.

At Outdoor Extreme Clean, we understand the importance of trained expert staff. Every member of our team is a licensed cleaning contractor. You can rest assured that your home or business is safe in our hands.

Contact a friendly Outdoor Extreme Clean cleaning expert today at (850) 499-6149 or connect with us online to find out how you can enjoy the benefits of beautiful, long-lasting results for your home or business.