A tile contractor in Bradenton takes on more work than his crew can handle and hands a bathroom remodel to a friend’s one-man company, which has no insurance. A week later the friend cracks a supply line during demolition, water runs into the unit below for a weekend, and the downstairs owner files a claim. The contractor sends it to his general liability carrier, expecting it to be covered. The carrier points to an endorsement on his policy that conditions coverage for subcontracted work on the subcontractor carrying its own liability insurance. Months later, at the policy audit, the carrier also charges premium on what he paid the friend, at the rate for uninsured subcontractors.
General liability is the policy most contractors buy first and understand least. Its basic promise is simple: it pays for injury and property damage you cause to other people, and it defends you when you’re sued for it. But a contractor’s policy in Florida is shaped by endorsements that decide what work is covered, who has to be insured, and what happens after the job is done. Most of those endorsements sit in the back of the policy and only come up at a claim or an audit.
What the Policy Covers
A commercial general liability policy has three main parts. The first covers bodily injury and property damage to third parties caused by your operations, the coverage that responds when a customer trips over your materials or your crew damages a neighbor’s property. The second covers personal and advertising injury, such as defamation or using someone else’s advertising material. The third pays limited medical expenses for people injured on your premises or by your operations, regardless of fault. The policy also pays to defend covered lawsuits, and for most policies that defense cost doesn’t reduce the limit.
Most contractor policies are written on an occurrence basis, which means the policy in force when the injury or damage happens is the one that responds, even if the claim is made years later. That matters for contractors, because claims over completed work often arrive long after the job.
Your Work Versus the Damage It Causes
The most misunderstood part of a contractor’s general liability is how it treats the contractor’s own work. The policy generally doesn’t pay to repair or replace faulty work itself. A tile job that has to be torn out because it was installed badly is the contractor’s cost. What the policy can cover is damage the faulty work causes to other property: the subfloor, the ceiling below, the neighbor’s belongings. On the standard form, damage to the contractor’s completed work can be covered when the work that failed was done by a subcontractor, but many excess and surplus lines policies remove that exception by endorsement.
General liability also isn’t a warranty, a performance bond or professional liability. It doesn’t pay for delays, cost overruns or design errors. Our article on what contractor insurance doesn’t cover goes through those gaps.
Completed Operations Is Where the Long Tail Lives
Contractors carry two aggregate limits: one for claims during ongoing work and one for products and completed operations, the claims that come after the job is finished. A roof that leaks two years later, a deck that fails, a fixture that causes a fire: those are completed operations claims, and in construction, they’re often the largest. Florida’s statute of repose for construction claims was shortened in 2023, but completed work can still produce claims for years, so a contractor who changes carriers or closes the business should think about how prior work stays covered.
Florida also has a presuit process for construction defect claims under Chapter 558, which requires a property owner to give the contractor written notice and a chance to inspect and respond before filing suit. A contractor who receives a 558 notice should send it to the insurance carrier right away rather than trying to handle it alone, since late notice can complicate coverage.
The Endorsements That Decide Coverage
Most contractor general liability in Florida is written in the excess and surplus lines market, where carriers shape coverage with endorsements. A few of them come up repeatedly.
Classification limitations restrict coverage to the work described on the policy. A painting contractor who takes on a roofing repair or a handyman who starts doing electrical work may have no coverage for that job at all. The class on the policy should match everything the business actually does.
Subcontractor requirements, like the one in the opening example, condition coverage on subcontractors carrying their own general liability at specified limits, naming the contractor as additional insured and signing a written agreement. A contractor who uses an uninsured or underinsured sub can lose coverage for injury or damage arising from that sub’s work.
Injury to contractors’ and subcontractors’ employees is excluded on many surplus lines policies, which means a sub’s worker injured on your job and suing you may not be covered. That makes the sub’s workers’ compensation, and your verification of it, critical.
Residential and condominium exclusions are common, particularly for new construction. Some policies exclude tract or multifamily residential work, some exclude condominiums and townhomes, and some limit coverage for work above a certain height. Water intrusion, exterior insulation and finish systems, mold and pollution exclusions can also appear depending on the trade.
Prior work exclusions can remove coverage for work completed before the policy started, which matters when changing carriers.
None of these are unusual, and many contractors can work within them. The point is to know which ones are on the policy before signing a contract that assumes otherwise.
Subcontractors and the Audit
Contractor general liability is usually rated on payroll, gross receipts or both, and the premium paid at the start of the term is an estimate. At the end of the term, the carrier audits the actual figures and adjusts. Payments to subcontractors who can’t show their own general liability coverage are commonly added to the audit at a higher rate, sometimes close to what the contractor’s own payroll would cost. Payments to properly insured subs are usually rated much lower.
The fix is administrative. Collect a certificate of insurance and a signed subcontract from every sub before they start, confirm the certificate shows the limits and additional insured status your policy requires, and keep records organized for the audit. Our article on the shell company problem in Florida construction covers what happens when a certificate isn’t what it appears to be.
Additional Insureds and Contract Wording
General contractors, owners, property managers and developers routinely require subcontractors to name them as additional insured, often for both ongoing and completed operations, with primary and noncontributory wording and a waiver of subrogation. Some require a per-project aggregate so one job’s claims can’t exhaust the limits for every other job. Each of these is an endorsement, and the policy has to include the right ones for the contract to be satisfied. A certificate that lists a party as additional insured doesn’t create coverage the policy doesn’t contain. Our articles on additional insured coverage for contractors and what your contract requires from your insurance explain the wording.
Licensing Minimums and Real Limits
Florida’s construction licensing rules require certified and registered contractors to carry general liability at minimum amounts that vary by license category. Those minimums are a licensing requirement, not a measure of real exposure, and they’re well below what most commercial contracts, property managers and general contractors require. Limits should be set by the contracts you want to sign and the size of the jobs you do, with an umbrella above them when contracts call for more. Our articles on insurance requirements for contractors and umbrella liability for contractors go into detail.
What General Liability Doesn’t Handle
Injuries to your own employees belong to workers’ compensation, not general liability, and in Florida, uninsured subcontractors’ workers can become your workers’ compensation responsibility as well. Vehicle accidents belong to commercial auto. Tools and equipment belong on an inland marine policy, and the building under construction belongs on builders risk. A contractor’s program works when those pieces fit together. Our articles on workers’ compensation for contractors, commercial auto for contractors, tools and equipment insurance and builders risk cover each.
What Contractors Should Confirm
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Does the classification on the policy describe all the work you actually do?
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Does the policy require subcontractors to carry their own coverage, and at what limits?
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Do you collect certificates and signed agreements from every sub before they start?
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Does the policy exclude injury to contractors’ or subcontractors’ employees?
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Are there residential, condominium, height or water intrusion exclusions that affect your jobs?
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Is completed operations coverage included, and is prior work excluded?
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Can the policy provide additional insured status for ongoing and completed operations, primary and noncontributory wording and a waiver of subrogation?
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Are your limits and umbrella set by your contracts rather than by licensing minimums?
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Are payroll and receipts estimates close to actual, so the audit doesn’t bring a surprise?
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Do you know to send any Chapter 558 notice to your carrier right away?
For more, see our contractor insurance page, what insurance a contractor needs in Florida, how much contractor insurance costs, the biggest contractor insurance claims in Florida, and our pages for electrical, concrete, masonry, drywall, flooring, landscaping, janitorial and marine contractors.
General Liability for Contractors With Prestige
Prestige Insurance Group insures artisan and trade contractors across Miami, Fort Lauderdale, Bradenton, Orlando and Tampa, through over 100 MGAs and specialty markets that write contractors standard carriers won’t. Send us your current policy with all its endorsements, a description of the work you do and the insurance section of a recent contract, and we’ll show you what the endorsements actually restrict and whether your coverage matches the jobs you’re signing. Call the office nearest you. Se habla español.
Miami: 305-969-8776 Orlando: 407-993-2331
General information only, not legal advice. Policy forms, endorsements, audit rules, licensing requirements and Florida construction law vary and change; refer to your policy, your contracts and the applicable statutes for the terms that apply to your business.
