In Florida’s trades, subcontractors play a vital role in helping roofing, HVAC, plumbing, electrical, masonry, and sheet metal contractors complete projects on time and within budget. But when it comes to workers compensation coverage, overlooking subcontractor compliance can quickly turn into a costly mistake.
If a subcontractor is injured on the job without proper coverage, the responsibility may fall back on the primary contractor. That could mean unexpected claims, higher insurance costs, penalties, or even halted projects. Knowing how to properly verify subcontractor coverage and exemptions is a necessity for staying compliant and protecting your business.
At BrightFund, we’ve supported Florida contractors since 1955 with workers compensation programs tailored to the trades. Here’s what every licensed contractor needs to know about subcontractor workers comp verification and avoiding compliance issues in Florida.
Why Subcontractor Workers Comp Verification Matters
Florida law requires most businesses in the construction industry to carry workers compensation coverage. This includes roofing, HVAC, electrical, plumbing, and other licensed trades. Subcontractors must either:
- Carry their own valid workers compensation policy, or
- Hold a state-issued exemption if they qualify.
If they don’t, and an accident occurs, your business could be held liable. According to the Florida Division of Workers Compensation, non-compliance can result in fines up to $5,000 per employee and a stop-work order that halts operations until coverage is secured.
For contractors working on tight timelines, even a short disruption can cause ripple effects delaying projects, straining client relationships, and causing unnecessary financial strain.
Best Practices for Florida Subcontractor Compliance
Best Practices for Florida Subcontractor Compliance
Ensuring compliance doesn’t have to be complicated. By following these best practices, contractors can protect their business and keep projects moving smoothly.
1. Request Certificates of Insurance (COIs)
Always request a current certificate of insurance before allowing a subcontractor on site. Verify that:
- The policy is active for the entire project timeline.
- The coverage matches Florida workers compensation requirements.
- The subcontractor’s business name on the COI matches their license and contract.
2. Confirm Coverage with the State Database
The Florida Division of Workers Compensation maintains a database where contractors can check active policies and exemptions. Don’t rely solely on a printed COI, double-check directly with the state to ensure accuracy.
3. Require Written Contracts
Include clear language in subcontractor agreements requiring proof of workers compensation coverage or a valid exemption. Spell out that non-compliance is grounds for termination of the contract.
4. Track Expiration Dates
Coverage isn’t static. COIs and exemptions have expiration dates, and it’s your responsibility to make sure they don’t lapse mid-project. A simple tracking system or calendar reminder can help prevent gaps.
5. Train Your Team
Project managers and supervisors should know how to spot and escalate subcontractor compliance issues. A well-informed team reduces the risk of accidental oversights.
Florida-Specific Considerations
Because Florida has unique rules for construction businesses, subcontractors in roofing, electrical, plumbing, HVAC, sheet metal, and masonry must be especially diligent. For example:
- Sole proprietors, partners, and corporate officers may apply for exemptions, but those exemptions must be renewed every two years.
- Roofing subcontractors are not eligible for exemptions if they employ any workers.
Understanding these nuances helps contractors avoid costly missteps that are common in the trades.
Protect Your Business, Protect Your Team
Subcontractor workers comp verification is a critical step in safeguarding your company, your employees, and your projects. By taking a proactive approach to compliance, contractors in Florida can avoid penalties, reduce liability, and build stronger partnerships with reliable subcontractors.
At BrightFund, we’ve built a system that puts contractors first. If you’re looking for a partner who understands the trades and provides workers compensation solutions tailored to your business, we’re here to help.