Workers’ Compensation Insurance Policy for General Contractors in Florida

Like other types of companies in Florida, general contractors have to ensure that their employees are covered by workers’ compensation insurance. However, they also have the added burden of ensuring that their subcontractors maintain proper insurance coverage, or they themselves could face legal or financial complications that hurt their bottom line.

Though it may seem like an unfair policy, the fact remains that knowing the requirements for general contractors in Florida can save owners a serious headache. If you are a general contractor and need to help a subcontractor get insured quickly, or if you are looking for a policy for yourself, NPN Brokers can help. Contact us today at (561) 990-3022 or visit us online.

Rules for Workers’ Compensation in the Construction Industry

Like the vast majority of employers that operate in Florida, construction companies are required to keep an active workers’ compensation insurance policy on file. More accurately, any company that is working in a construction-related field – as defined by Rule 69L-6.021 of the Florida Administrative Code – and that has at least one employee is obligated to have a workers’ comp policy.

Be aware that the state takes a broad view of what constitutes a construction company. This classification can include anyone from landscapers and paperhangers to roofers and farm equipment operators. If any employee of your business falls under one of these classes, your entire company will be held to the state’s requirements for construction companies, no matter what the focus of your work may be.

Those who may want to circumvent this law should know that state investigators are empowered to conduct on-site inspections and examine business records. In addition, the state’s Department of Workers’ Compensation maintains a Proof of Coverage database specifically so the status of any company’s policy can be conveniently checked at any time.

What are the Workers’ Compensation Requirements for My Company?

The workers’ compensation requirements for general contractors in Florida are fairly straightforward. Because they are classified as construction companies by the state, general contractors face the strictest form of regulation concerning workers’ comp coverage: any general contractor with at least one employee must carry workers’ compensation insurance, according to the law. Any owner who works as a corporate officer or member of a limited liability company counts as an employee for the purposes of this requirement, though exemptions to this may be possible.

As in other industries, the general contractor must pay the insurance rate that corresponds to their employees’ job responsibilities. Workers who face greater danger – roofers and glaziers, to name two examples – cost a greater amount when paying workers’ compensation premiums. It is important to note here that failing to properly represent your employees’ responsibilities can be a punishable under Florida law, as it is considered a type of insurance fraud.

Provisions for General Contractors

Technically speaking, general contractors are held to the same standard of coverage as any other construction company in that they must have a workers’ comp policy if they have even one employee on the payroll. However, there are additional provisions of the law that relate to subcontractors, and they are worth mentioning here.

Under the law, all subcontractors are supposed to insure their own employees before they begin working on a job. Of course, in a world of deadlines and schedules it can be tempting to give the green light to a subcontractor under the assumption that they are insured; if you are a general contractor, this could be a grave mistake.

The law clearly states that any injury that happens on a job site you control becomes your responsibility if the subcontractor that employs the injured worker does not have the proper insurance coverage. In the event of an accident, you could suddenly find yourself on the hook for medical bills or missed income, and you could even end up the target of a lawsuit.

The best way to cover your bases is to obtain the appropriate documentation from any subcontractors you hire proving that they are covered. The state spells out which three documents it recognizes as evidence of a valid workers’ compensation insurance policy:

• A copy of the “information page” from the subcontractor’s policy
• A screen print of the page on the Department of Workers’ Compensation’s Proof of Coverage database showing that the subcontractor has a policy on file with the state
• A Certificate of Liability Insurance issued by the insurance producer or carrier confirming that the appropriate coverage is in place and additional written documentation, which can take the form of a computer printout (as described above)

Are There Any Additional Requirements for Subcontractors?

As mentioned above, the general contractor of a project is required to make sure that all subcontractors are properly insured in accordance with the state’s workers’ compensation insurance laws. Note that this does not mean that the general contractor must themselves find or provide insurance for their subcontractors; however, they must obtain certain assurances that those companies are covered before allowing them to begin work.

The forms these assurances can take are spelled out in Florida statutes. Getting any of three specific documents could satisfy the state’s requirements and ensure that you are covered in the event of a workplace injury:

• A copy of the “information page” from the subcontractor’s workers’ compensation insurance policy
• A printout of the page in the Division of Workers’ Compensation’s Proof of Coverage database showing that the subcontractor has active and adequate workers’ compensation coverage. The database can be found on the DWC’s website, www.fldfs.com/WC.
• A Certificate of Liability Insurance from the subcontractor’s insurance carrier proving that they are covered under a workers’ compensation policy. Some attendant documentation may be required, which could include a screen print from the Proof of Coverage database.

If you are working with a subcontractor that is part of a professional employer organization, or PEO, the Certificate of Liability will need to be accompanied by a list of the employees leased to the subcontractor under their agreement with the PEO. Also, if any of the subcontractor’s corporate officers elect to exempt themselves from the workers’ comp requirements, a Certificate of Election to be Exempt must also be obtained.

Keep in mind that any subcontractor that in turn hires another company to complete part of their work – basically, if a subcontractor subcontracts out all or a portion of their job – then that company will also be considered a general contractor, for all intents and purposes. Therefore, the requirements described above would also apply to that company.

What Happens if a Subcontractor is Not Insured?

In the event that a worker from a subcontractor is injured at a job site run by a general contractor, the responsibility for workers’ comp benefits falls on the subcontractor. However, if the subcontractor in question does not have a workers’ compensation insurance policy in place, then that responsibility falls on the general contractor. In essence, any employee that is not covered by the appropriate subcontractor is considered an employee of the general contractor under the law.

For any general contractor that does not want to be on the hook for another company’s employees, this means that you must obtain adequate proof of workers’ compensation insurance from your subcontractors before allowing their employees to begin working at your job site; otherwise, you could face significant hurdles ranging from increased premiums to potential lawsuits.

Options for Obtaining Workers’ Compensation Insurance Coverage

Although a number of avenues exist for companies looking for workers’ comp coverage, finding a policy that suits your company can be trickier than it may seem. While the state may mandate that you have coverage, they do not force any insurance carriers to provide that coverage if you appear to be a potential liability for that provider.

Construction companies can be especially vulnerable to the judgements of insurance carriers because workers in the construction industry are often exposed to a high level of danger. This can make it difficult to convince a workers’ comp insurance provider to cover your company, or to offer an affordable rate. This is where professional employer organizations can make all the difference.

A professional employer organization, or PEO, is a business entity that takes over some of a company’s administrative aspects – mainly payroll and human resources – for a fee, and in exchange it can extend workers’ compensation coverage that company’s employees. This is often the only option for companies that has been unable to find a policy through the more common channels, or for companies that have been forced to halt operation and need immediate coverage to resume work.

Ensure that Your Company Has the Right Workers’ Comp Insurance

Coordinating a construction job can be a daunting prospect under the best of circumstances. The last thing a general contractor needs to worry about is what could happen to their company if a worker is hurt on the job without the proper coverage in place, whether that person is employed by a subcontractor or not. NPN Brokers can help make sure that you and those you hire have the peace of mind that comes with an affordable workers’ compensation insurance policy. To learn more today, contact us at (561) 990-3022 or visit us online.