Contractor Insurance in Florida

Coverage that qualifies you for the job, from workers comp and GL to builders risk, tools and bonds

Contractor insurance in Florida is less about buying coverage than about qualifying for work. Builders, general contractors, property managers, associations and building departments all decide whether a contractor can start a job by looking at the insurance first, and they look at details most contractors never see until a certificate is rejected: whether workers’ compensation is a policy or an exemption, whether the general liability excludes the kind of building the job is on, and whether the endorsements behind the certificate match the contract. A contractor program built around the work the business actually does, and the contracts it actually signs, is what keeps jobs moving and claims paid.

Workers’ Compensation Comes First

Florida treats construction differently from every other industry when it comes to workers’ compensation. A construction business needs coverage from its first employee, and almost every trade counts as construction, from roofing, framing and concrete to painting, drywall, flooring, pressure washing and installation work. The state can stop work on a jobsite where it finds employees without coverage, and the penalties are calculated on the payroll that went uninsured.

Corporate officers and LLC members who own a qualifying share of the business can file an exemption for themselves, and many owner-operated companies start that way. An exemption covers only the owners named on it. It never covers employees or helpers, it has to be renewed, and many builders and general contractors will not accept it, because Florida law makes them responsible for the injured employees of an uninsured subcontractor. When a contract says workers’ compensation, it usually means a policy. For trades that standard carriers avoid, a PEO arrangement can sometimes provide coverage while the business builds a track record. Our articles on workers’ compensation for contractors, PEO workers’ comp for hard-to-place classes and, in Spanish, the workers’ comp exemption explain each option.

General Liability: The Classification Decides the Coverage

A contractor’s general liability policy is written for the trade described on the application, and many policies, especially in the surplus lines market, limit coverage to exactly that description. A painter who starts doing small roof repairs, or a remodeler who takes on a new home, may be working outside the policy without knowing it.

The exclusions that matter most in Florida are the ones that follow the type of building. Many contractor policies exclude new residential construction, condominiums or townhomes, and some exclude roofing or work above a certain height. A policy that is perfectly sound for commercial remodeling can provide no coverage at all on a production home in a new subdivision. Completed operations coverage, which responds to claims that surface after the job is finished and the crew has left, is just as important, because construction defect and water intrusion claims often arrive long after the final invoice. Some surplus lines policies also count defense costs inside the limit, which reduces what is left to pay a claim. Our articles on general liability for contractors, what contractor insurance does not cover and construction defect claims go into the details.

What Builders, General Contractors and Owners Require

The insurance section of a construction contract is usually longer than the scope of work, and it has grown over time. Expect required limits for general liability, auto and workers’ compensation; the hiring party named as additional insured for both ongoing and completed work; coverage that is primary and noncontributory; a waiver of subrogation on every policy that allows one; and an umbrella above the primary limits on larger jobs. Hotels, property management companies and national builders often review certificates through a compliance service that rejects anything that doesn’t match.

Each of those requirements is created by an endorsement on the policy, not by the certificate. A certificate that lists a requirement the policy doesn’t contain protects no one, and it can cost the contractor the job, or the coverage, when a claim is made. The simplest habit is to send the insurance section of a contract to your agent before you sign it. Our articles on additional insured coverage, insurance requirements for contractors and why contract requirements keep growing explain what to look for.

The Rest of the Program

Vehicles used for work generally belong on a commercial auto policy, particularly when they are titled to the business, driven by employees or towing trailers, and personal auto policies commonly exclude business use of that kind. Tools and equipment are not covered by auto or general liability; they need inland marine coverage that follows them to the jobsite, the trailer and the truck. A builders risk policy covers the structure itself while it is under construction or renovation, which general liability never does. An umbrella adds limits above general liability, auto and employer’s liability when contracts or exposure call for more. Design-build contractors may need professional liability, and trades that handle mold, asbestos, fuel or chemicals may need pollution coverage. Our articles on commercial auto for contractors, tools and equipment coverage, what builders risk covers that general liability does not and umbrella liability for contractors explain each one.