Florida Supreme Court Ruling May Increase Business Costs

Comprehensive Risk Management Programs Can Help Manage Workers’ Compensation Costs

Today’s challenging economic environment has resulted in a renewed focus by the Florida business community to evaluate and implement opportunities to increase efficiencies and reduce the cost of doing business in Florida. Employment-related opportunities are an important part of this ongoing evaluation, however, the recent Florida Supreme Court ruling will likely result in increased workers’ compensation costs and employment-related costs for Florida businesses.

The Florida Supreme Court ruling in Emma Murray v. Mariner Health allows for the payment of hourly attorneys’ fees by the insurance carrier in all workers’ compensation cases. This ruling creates the opportunity for more substantial legal fees and will likely result in workers’ compensation claims being more attractive for attorneys to litigate. This would then produce a significant increase in both the number of workers’ compensation claims filed and the claim settlement amounts. The rationale is based on enhanced worker protections; however, Florida businesses will ultimately pay the price for the increased workers’ compensation costs associated with the Florida Supreme Court’s ruling.

Workers’ compensation rates are based on a variety of factors which include both overall industry projections, as well as the individual business’ claims experience. While Florida businesses cannot eliminate the increased workers’ compensation cost associated with overall industry projections, they can and should take action to mitigate the cost impact based on their own workers’ compensation claims experience. This will require a comprehensive Risk Management program designed to: 

  1. Reduce the risk of employee injury by maintaining a safe work environment
  2. Reduce exposure with efficient workers’ compensation claims management and
  3. Educate employees and managers in both areas.

Additionally, Florida businesses and businesses nationwide can evaluate other workers’ compensation carriers and/or employment-related partners to allow for innovative solutions that can help manage their workers’ compensation costs. As a Professional Employer Organization (PEO) that provides employment-related support and guidance for our clients, we have seen the results that can be achieved when clients adhere to a Risk Management program and have access to a top-rated workers’ compensation insurance carrier.   

Workers’ compensation costs can be positively impacted, for example, by improving the various processes that an employee will experience once a workers’ compensation claim is made. According to the National Council on Compensation Insurance (NCCI) Issues Report, the median cost index of a workers’ compensation injury typically increases when delays in claims reporting occur – as much as 35% for back injuries. National Underwriter Property and Casualty News reports that non-timely provision of benefits is the primary reason that injured workers litigate, which can increase the cost of a claim by 40%.  

By utilizing a comprehensive Risk Management strategy, workers’ compensation costs can indeed be effectively managed. Unfortunately, most small- to medium-sized businesses do not have the expertise or infrastructure to handle these or other techniques and processes.  The first step is being aware of the issue. The next step involves taking action to protect your business. Innovative solutions can help and will certainly be required to help mitigate workers’ compensation costs.