Can I exclude owners and officers from workers’ comp coverage in Florida?

Workers’ compensation insurance for your Florida small business is an important consideration. Think about this: It’s much more affordable to pay policy premiums than millions of dollars in legal fees and medical care for a work-related injury. But you may want to exclude some of your upper leadership from coverage with a Florida workers’ comp exemption. So, can you?

The short answer to this question is yes. You can exclude owners and officers from workers’ compensation coverage in Florida. But it depends on many factors, including the size of your company and your employees’ roles within it.

First, your employees must be covered

Employee workers’ comp coverage is a crucial part of your small business insurance lineup. If an injured worker files a claim, it could make or break your business—literally. But you don’t have to worry because Florida law requires all employers to have workers' compensation insurance for their employees.

Coverage requirements depend on your industry, the number of employees, and the business entity you have set up. For example, businesses in the construction industry must have coverage as soon as they have their first employee.

But if you’re starting a business in Florida that’s not construction, you can wait until you have four or more employees to find workers’ comp insurance—but that includes you as the owner of the business if you’re a corporate officer or Limited Liability Company (LLC) member.

Is your business a corporation?

Your business structure determines if you can exclude owners and officers from Florida workers’ compensation benefits—and the steps you must take to make it happen.

The process is different for construction vs. non-construction businesses, according to the Florida Division of Workers’ Compensation (DWC). However, both procedures allow a workers’ compensation exemption for the officers of a corporation if:

• The corporation is registered and listed as active with the Florida Department of State, Division of Corporations.
• The applicant is listed as an officer of the corporation in the Florida Department of State’s records.
• The applicant isn’t affiliated with an ACTIVE Stop Work Order or Working in Violation.

Companies in the construction industry have additional eligibility requirements to meet, such as having a minimum of 10% ownership in the corporation.

If the requirements are met, start by applying for a Certificate of Election to be Exempt from Florida's Workers' Compensation Law at MyFloridaCFO.com. Then, follow the steps to apply or renew the exemption form through the online system and notify your insurance carrier.

Is your business a sole proprietorship?

As a sole proprietor, you don’t need to opt out of workers’ comp insurance coverage. Sole proprietors aren’t considered “employees,” so your insurance policy automatically excludes you.

Depending on your line of work, you may choose to be covered. You can purchase coverage by filing form DWC 251 Election of Coverage. You’d submit the notice of election form to the state of Florida DWC. If you change your mind, you can file form DWC 251-R to go back to being excluded.

However, that’s if you don’t have a construction business. Sole proprietors in the construction industry are considered employees under Florida workers’ comp law and cannot exempt themselves from coverage.

What if family members work for you?

Many small businesses hire family members. Whether or not you can exclude them from the company’s workers’ comp policy depends on their status.

For example, suppose you own a landscaping company in Tallahassee and hire your cousin Hannah to help out. If you hire Hannah as an independent contractor, you don’t need to exempt them from your policy—workers’ comp coverage doesn’t include contractors.

However, regular employees cannot be excluded from workers’ compensation insurance coverage. If you hire Hannah as a seasonal, part-time, or full-time employee, you can’t file for a workers’ comp exemption.

What about a partnership?

Partners operate under similar guidelines as sole proprietors. If your business isn’t construction-related, partners in a partnership aren’t considered employees. In that case, the workers’ comp policy doesn’t cover them unless they file Form DWC 251 Election of Coverage.

If you’re in the construction industry, the rules are slightly different. Florida statutes consider partners to be employees. If you’re in a partnership, your policy automatically includes you, and you cannot exempt yourself from workers’ compensation coverage.

Is your business an LLC?

Generally, your workers’ compensation policy automatically includes members of a Florida LLC. Business owners and officers can reject coverage — but they must meet specific requirements. For example:

• The LLC must be registered and listed as active with the Florida Department of State, Division of Corporations.
• The applicant must own at least 10% of the LLC.
• The applicant can’t be affiliated with an ACTIVE Stop Work Order or Working in Violation.

Businesses in the construction industry must meet additional requirements, such as paying a $50 application fee.

What if an officer rejects coverage and then changes their mind?

Sometimes, an owner or officer may opt in or out of coverage and then change their mind. Luckily, Florida workers’ comp law has a simple fix. For example, suppose you’re an officer, partner, or LLC member, and you want your workers’ comp policy to cover you. Simply fill out form DWC 251 Election of Coverage to request coverage.

If you previously elected coverage and now want to opt out, you’ll need form DWC 251-R Revocation of Election of Coverage. You fill it out and submit it to the Florida DWC to opt out of your previous request for coverage.

Workers’ comp laws are a bit tricky to navigate. Florida law and requirements can vary depending on the industry. So, what works for a restaurant owner may not work for someone in agriculture or the construction industry.

But Huckleberry is here to help. We’re Florida workers’ comp experts. If you’re ready for an instant quote, use our workers’ comp calculator. We’ve got you covered for business insurance, too. Plus, everything is online, and you’ll get your quote in minutes.