Workers’ compensation premium in Florida begins with
manual rating. A single price or rate does not exist. Under
manual rating, all employees are grouped according to their
job duties and classification. There is a specific price
or rate for each of the approximately 600 employment classifications,
with each classification representing a specific activity
(For more information regarding classifications, please
see the Classification
section). The estimated losses of the group are added
together and this average cost is obtained through the ratemaking
process. The rates determined for manual rating are averages
reflecting the normal conditions found in each of the 600
classifications and represent the cost of workers compensation
insurance per $100 of payroll.
Employers use these rates to multiply their employees’
payroll (in $100 units) that is expected over the upcoming
year. Businesses also often use multiple classifications
to group their employees by job duties and use the rates
associated with each classification. The resulting total
is the manual premium for the policy. The experience modifier
and discounts are then applied to this number to get the
total estimated premium. At the end of the policy period,
there will be an audit to determine the actual payroll over
the year and the difference between that and the estimated
premium will be paid or returned.
