COLUMN: No magic solution for workers’ comp

Jun 16, 2008

Herald Tribune--June 16, 2008

Sarasota resident Lydia Corn performs magic in her work. But even though she is the “Engineer of Dreams” for Cigma Magician’s Camp for children, her wizardry is not dazzling enough to make workers’ compensation insurance magically appear.

“Our major problem was that we were seasonal and had a small payroll,” she says.

Cigma only has one employee, not counting Corn and two other owners. Workers’ compensation agents prefer larger clients.

Florida companies are not required to buy workers’ compensation insurance until they have four employees. Owners do not count. Therefore Corn can operate within the law without insuring her employee. But the former doctor of internal medicine cares too much about her employee and is not willing to take the risk of her being injured on the job. Additionally, she does not want her company “to have that kind of liability.”

Seemingly unrelated to Corn’s dilemma, I received a e-mail from Stephen Sutter, president of Sarasota-based Sutter Roofing Co. of Florida. He wanted to talk about the new thin solar electric roof panel product that he installs on residential and commercial properties to reduce electric bills. It turns out that he was also president of Florida Roofing, Sheet Metal, and Air Conditioning Contractors Association, which lobbied for workers’ compensation reform.

Roofing and construction workers are among the highest risks for injury. As such, the premiums for workers’ compensation are higher and coverage is harder to get.

“Back in 2003, and I spoke to Governor (Jeb) Bush’s task force on affordability and accessibility in the workers’ comp insurance industry,” Sutter says. “Apparently, we were heard and understood since the Legislature passed reforms in 2004, which reduced the rates, cleaned up exemptions, and changed the methodology in attorney and injured worker remuneration”

Cleaning up abuses, including exemptions issued to corporations and LLCs with fewer than four employees, has been a big factor in getting premiums lowered. But according to Sutter, there are still contractors who abuse the system and may put those that hire them at risk.

If contractors are uninsured and get injured on the job, they may look for ways to sue whoever hires them. Therefore Sutter recommends that you “should always require a copy of the contractors license, a general liability certificate of insurance and a certificate of insurance from the contractor’s workers’ compensation carrier.”

Meanwhile, Corn was unable to find a workers’ compensation insurance agent for her very small and seasonal magic camp.

Instead, she found Paychex, a payroll processing company that also connected her with a willing workers’ compensation insurer.