Do I Need Workers’ Compensation Insurance for My Subcontractors in Florida?

The question of how workers’ compensation insurance applies in the relationship between a general contractor and subcontractor can be tricky. The simplest answer is just to say that subcontractors are usually responsible for insuring their own employees, but these things can often get a bit complicated, especially in the chaotic aftermath of a workplace accident.

If you are a general contractor in Florida, it is of the utmost importance that you are aware of the state’s laws regarding workers’ compensation insurance and how they apply to you and those you hire. The specifics can be somewhat complicated, but understanding your obligations can protect you from a wide range of unpleasant consequences including increased premiums on your workers’ comp policy and potential lawsuits from injured workers. Read on to learn just what the Sunshine State requires for your job site.

Requirements for Subcontractors

All companies operating in the construction industry must meet the same standard for workers’ compensation coverage under the law. While other fields have slightly more relaxed rules, construction-related businesses face the strictest standard for coverage: any company with one or more employees must maintain a valid workers’ comp insurance policy, regardless of whether they are a general contractor or subcontractor.

According to Rule 69L-6.021 of the Florida Administrative Code, a wide array of job responsibilities falls within the bounds of the construction industry, including landscaping, paperhanging, and farm machinery operation. Any company working as a subcontractor should take care to follow the legal requirements that pertain to their specific job, as subcontractors are generally responsible for insuring their employees themselves.

Requirements for General Contractors

The requirements for general contractors are even more stringent than those for the companies they hire. Under Florida law, all general contractors are responsible for making sure the subcontractors on their job sites have the proper workers’ compensation insurance policies in place before that company begins work.

This is especially important for contractors to know because, in the event that a worker is injured on the job, the general contractor is responsible for paying out benefits if the subcontractor does not have proper coverage. No general contractor wants to be on the hook for medical bills, missed income, or increased premiums because the company they hired did not follow through on their own obligations. Fortunately, the state spells out exactly how you can confirm a subcontractor’s insurance status so you aren’t left wondering whether an expensive payout is in your future.

Confirming a Subcontractor’s Insurance Policy

The first of the three prescribed documents through which a general contractor can confirm a workers’ compensation policy is also the easiest to obtain: a copy of the “information page” from the subcontractor’s insurance policy.

The second document that counts as confirmation is a screen print from the Proof of Coverage database on the Division of Workers’ Compensation website, which can be found at www.fldfs.com/WC. A subcontractor simply needs to pull up the necessary information regarding their insurance policy on the website to show the evidence they need.

The third and final document that can be used to show coverage for a subcontractor is a Certificate of Liability Insurance and written documentation – which could simply be a printout from the Proof of Coverage database, as described above – from that company’s insurance carrier. Bear in mind that the certificate must contain very specific information:

1. The name, address, and phone number of the producer
2. The name of the carrier providing the workers’ compensation insurance policy
3. The name of the subcontractor, which should be listed as the insured
4. The policy number corresponding to the workers’ comp insurance, or the binder number if the policy has not yet been issued
5. The limits of coverage, in dollars, for the insurance policy
6. The signature of authorized representative
7. The dates the work is being performed by the subcontractor, which should be within the “Policy Effective” and “Policy Expiration” dates listed on the certificate

If the company being subcontracted is a member of a professional employer organization, or PEO, the evidence of coverage that can be offered is limited to just a Certificate of Liability Insurance, along with a list of all employees to be sent to the job. This difference is because any workers who go to the site are technically being leased by the PEO. A certificate obtained for this purpose also has its own unique requirements, and should include:

1. The producer’s name, address, and phone number
2. The name of the insurance carrier that is providing the policy
3. The professional employer organization or employee leasing company name should be listed as the insured
4. The proper policy number
5. The limits of coverage under the policy, listed in dollars
6. The signature of an authorized representative
7. The date on which the certificate is issued must precedes the date the subcontractor began working
8. The dates on which any work was performed by the subcontractor must fall within the “Policy Effective” and “Policy Expiration” dates on the certificate
9. The information provided in the Description of Operations section should name the subcontractor and clearly state that only the leased employees of that subcontractor are covered under the workers’ compensation policy

Collecting all the pertinent paperwork and information, while tedious, can save a contractor significant expense in the long run. It should be noted that these same rules also apply to any subcontractors who themselves hire another company to complete all or part of a job, as this would effectively make qualify them as a general contractor under Florida workers’ comp laws.

Don’t Let Finding Workers’ Compensation Coverage Get In Your Way

Managing a job site can be more than a little complicated, and it comes with its fair share of stress. At NPN Brokers, we don’t believe that workers’ compensation insurance should add to that stress. With our connections and expertise, we can find you or your subcontractor an affordable workers’ comp policy, often within 24 hours. Don’t let workers’ compensation insurance stand in your way; contact us today at 1 (561) 990-3022 or visit us online.