A drywall contractor in Winter Garden lands a subcontract with a builder putting up a phase of new homes in Horizon West. The builder’s onboarding packet asks for a certificate showing general liability with completed operations, the builder named as additional insured for ongoing and completed work, a waiver of subrogation, auto liability and workers’ compensation. His general liability policy turns out to exclude new residential construction, and he has an exemption instead of a comp policy. He has the crew and the schedule, but not the insurance the contract requires, and the builder gives the work to the next sub on the list.
Central Florida is one of the busiest construction markets in the country, and the work runs from new subdivisions in Lake Nona, Horizon West, Clermont and Poinciana to remodels in College Park and Winter Park, commercial build-outs along the I-4 corridor and maintenance work for the resorts and theme parks. For a contractor, that means steady demand and a long line of general contractors, builders and property managers who will check the insurance before they check anything else. This page covers what Orlando-area contractors are most often asked for and where coverage usually falls short. The statewide basics are in our guide to what insurance a contractor needs in Florida.
Workers’ Compensation Is Where Most Orlando Contracts Stall
Florida treats construction differently from every other industry for workers’ compensation. A construction business needs coverage once it has a single employee, not four, and painting, drywall, flooring, roofing, framing, pressure washing and most other trades are classified as construction. Corporate officers and LLC members who own at least ten percent of the business can file an exemption for themselves with the state, but an exemption covers only the owners named on it. It doesn’t cover anyone the business hires.
The bigger issue in Orlando is that many builders and general contractors won’t accept an exemption at all. Under Florida law, a contractor is responsible for the workers’ compensation of an uninsured subcontractor’s employees, so general contractors protect themselves by requiring every sub to carry an actual policy. When a contract says workers’ compensation is required, it usually means a policy, even for a one-person company. The state’s compliance investigators can also issue stop-work orders on job sites where coverage is missing. Our articles on workers’ compensation for contractors and PEO workers’ comp for contractors explain the options, including for new businesses and harder classes.
New Homes Need the Right General Liability
Much of the work around Orlando is new residential construction, and that matters for general liability. Many contractor policies in the excess and surplus lines market exclude tract homes, new residential construction, condominiums or townhomes, and some limit work above a certain height. A policy that’s fine for remodels may not cover a single day of work in a new subdivision. Builders also tend to require completed operations coverage and additional insured status that continues after the job is finished, since claims over new homes can arrive years later.
The fix is to describe the work accurately when the policy is written and to read the endorsements before signing a builder’s agreement. Our article on general liability for contractors explains the endorsements that decide coverage, and our article on additional insured coverage covers the contract wording.
Resort, Hospitality and Commercial Clients Ask for More
Contractors who work for hotels, resorts, theme park vendors, convention properties and large property managers usually face the highest requirements in the region. Expect higher liability limits, an umbrella, primary and noncontributory wording, a waiver of subrogation, auto liability on every vehicle that comes on property and, in some cases, specific endorsements spelled out in the vendor agreement. These clients often check certificates through a compliance service that rejects anything that doesn’t match exactly, so the policy has to be built to the contract before the first invoice. Our articles on what your contract requires from your insurance and umbrella liability for contractors go into detail.
Afternoon Storms, Theft and the Commute
Central Florida’s summer thunderstorms bring lightning, sudden wind and heavy rain almost every afternoon, and they cause their share of contractor claims: water getting into a house with an open roof or window opening, materials blowing off a site, damage to a customer’s property when a tarp fails. Those losses can land on general liability, on the builders risk policy for the project, or on nobody, depending on whose property was damaged and what was in place.
Fast-growing subdivisions also make theft of tools, trailers and materials a real problem, and the auto policy doesn’t cover what’s in the truck. Tools need their own coverage on an inland marine form. And the drive between Kissimmee, Lake Nona, Sanford and Clermont puts a lot of miles on work trucks, so the auto policy needs to match how the vehicles are titled and who drives them. Our articles on tools and equipment insurance, builders risk for contractors and commercial auto for contractors cover each.
Subcontractors and Certificates
Many Orlando contractors grow by bringing on subs, and the insurance has to keep up. Contractor general liability is audited at the end of the term, and payments to subcontractors who can’t show their own coverage are usually added at a higher rate. Some policies go further and remove coverage for work done by uninsured subs. Collect a current certificate and a signed subcontract from every sub before they start, and watch for certificates that belong to someone else’s company. Our article on the shell company problem in Florida construction explains what a rented certificate can cost.
What Orlando Contractors Should Confirm
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Do you carry a workers’ compensation policy, or only an exemption, and do your contracts accept an exemption?
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Does your general liability cover new residential construction, condos and townhomes if you work on them?
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Is completed operations included, with additional insured status for ongoing and completed work?
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Can your policies provide primary and noncontributory wording and a waiver of subrogation?
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Are your limits and umbrella high enough for resort, hospitality and commercial clients?
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Are tools and trailers covered on an inland marine policy?
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Is every work vehicle on a commercial auto policy?
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Do you collect certificates from every subcontractor before they start?
For more, see our contractor insurance page, insurance requirements for contractors in Florida, how much contractor insurance costs, what contractor insurance doesn’t cover, our pages for drywall, painting, flooring, plumbing and electrical contractors, and our Spanish-language guide for Orlando and Kissimmee businesses.
Contractor Insurance in Orlando With Prestige
Prestige Insurance Group has an office in Orlando and insures contractors across Orange, Osceola, Seminole and Lake counties, from Kissimmee and Lake Nona to Sanford, Winter Garden and Clermont. We work with over 100 MGAs and specialty markets, including markets for new contractors, new residential work and workers’ compensation for small crews. Send us the insurance section of the contract you’re trying to sign, and we’ll tell you what it takes to meet it. Call the office nearest you. Se habla español.
Orlando: 407-993-2331 Miami: 305-969-8776
General information only, not legal advice. Workers’ compensation requirements and exemptions, policy forms and endorsements, and contract requirements vary and change; refer to your policies, your contracts and the Florida Division of Workers’ Compensation for the terms that apply to your business.
