Orlando, Fla.—Except for the state of Texas, where employers are allowed to opt out the state’s system, workers compensation coverage is required for employers in all other states, including Florida. In the case of Texas, about one-third of the employers are non-subscribers. In the event of a serious accident, those that opt out of the system can be sued by employees for failure to provide a safe workplace. These non-subscribers tend to be smaller companies. 

The workers compensation social contract is a part of a social contract embedded in each individual state’s  law, although their systems may vary from one state to another. It all started when the industrial expansion that took place in the United States during the 19th century was accompanied by a significant increase in workplace accidents. At that time, the only way injured workers could obtain compensation was to sue their employers for negligence. Soon enough —employers found that negligence was a costly, a time-consuming effort, and often the court ruled in favor of the employer. That was when, in the early 1900’s, a state-by-state pattern of legislative proposals designed to compensate injured workers emerged.

Wisconsin enacted the first permanent workers compensation insurance law in 1911, and by 1920 all but eight states had enacted similar laws. By 1949 all states had a workers compensation system that provided compensation to workers hurt on the job, regardless of who was at fault. As part of the compromise that made the employer liable for work-related injury and disease costs regardless of fault, the employee gave up the right to sue the employer for injuries caused by the employer's negligence.

In some states benefits are still inadequate, while in others, they are overly generous. Some states were slow in adopting the National Commission's guidelines and have still not embraced the entire package of 19 recommendations published in 1972. A major benefits issue still to be resolved in some states is the imbalance between levels of compensation for various degrees of impairment; permanent partial disabilities tend to be overcompensated and permanent total disability under compensated.

When premiums rise sharply, legislators often call for reforms. The last round of widespread reform legislation started in the late 1980s. In general, the reforms enabled employers and insurers to better control medical care costs through coordination and oversight of the treatment plan and return-to-work process and to improve workplace safety. Among the cost drivers that require attention are the increasing costs of prescription drugs, in particular the long-term use and abuse of narcotic painkillers, according to industry studies. 

Our insurance specialists at Garzor, can help you find the option that best suits your business needs and keep you well covered.

At Garzor Insurance our experienced professionals are dedicated to providing commercial insurance coverage for businesses in Florida as well as Georgia, Texas, and now many other states across the U.S.A. If you have questions about business insurance, or any other commercial insurance aspects, please do not hesitate to visit us online at Garzor Insurance, or you may want to call us directly at (321) 206-8035. 

Mariana Morante

Licensed Insurance Agent