If you're planning to work as a contractor in Florida, here's something you need to understand right away: the state takes insurance requirements seriously. Really seriously. We're talking immediate license suspension if your coverage lapses, mandatory proof of insurance before you can even get licensed, and personal liability if you don't verify your subcontractors are covered. But here's the good news—once you understand what Florida actually requires, getting compliant isn't as overwhelming as it sounds.
Florida's contractor insurance landscape is unique. Unlike states where you can sometimes slide by with minimal coverage, Florida's Construction Industry Licensing Board (CILB) and Department of Business and Professional Regulation (DBPR) have built a system designed to protect homeowners and ensure contractors are financially responsible. That means navigating license bonds, general liability policies, workers' compensation insurance, and a paper trail of certificates that need to follow you to every job site.
General Liability Insurance: Your Foundation Coverage
Let's start with general liability insurance, because this is non-negotiable. The Florida licensing board sets specific minimums based on your contractor classification. If you're a general contractor or building contractor, you need at least $300,000 in public liability coverage and $50,000 in property damage coverage. For specialty contractors—think plumbers, electricians, roofers—the minimums are $100,000 in liability and $25,000 in property damage.
Here's what catches contractors off guard: these aren't just requirements for getting your license. You must maintain this coverage continuously. If your policy lapses for even a day, DBPR can suspend your license immediately. You'll need to submit a Certificate of Insurance when you apply for your license, and again at renewal. The certificate must be prepared by a licensed insurance agency and must list DBPR as the certificate holder—not you, not your business, but the regulatory agency itself.
Think of general liability as your safety net for the unexpected. A homeowner trips over your tools and breaks an ankle. Your crew accidentally damages a gas line and the house needs to be evacuated. You're demolishing a wall and discover you've taken out a load-bearing beam. These scenarios aren't hypothetical—they're Tuesday for most contractors. Your general liability policy covers bodily injury to third parties, property damage you cause to someone else's property, and legal defense costs if you get sued.
Workers' Compensation: Stricter Rules for Construction
Workers' compensation in Florida is where construction industry rules get particularly strict. While non-construction businesses need workers' comp when they have four or more employees, contractors need it with just one employee. That's right—hire a single helper, and you're required to carry coverage.
But here's where it gets interesting: Florida law considers corporate officers, LLC members, sole proprietors, partners, and even independent contractors as employees in the construction industry. Yes, you read that correctly. If you're a corporate officer working on job sites, the state assumes you need workers' comp coverage too. However, corporate officers and LLC members who own at least 10% of the company can apply for an exemption—but only up to three people per company can be exempt at any given time.
Getting an exemption requires filing paperwork with Florida's Division of Workers' Compensation, paying a $50 fee, providing a valid driver's license, and completing an online workers' compensation tutorial. The exemption isn't automatic and needs to be renewed. Sole proprietors and partners, on the other hand, cannot exempt themselves—they're automatically considered employees for coverage purposes.
Here's the critical part that trips up many contractors: you're legally responsible for verifying that every subcontractor you hire has valid workers' compensation coverage before they start work. If your sub doesn't have coverage and someone gets hurt, you could be on the hook for their medical bills and lost wages. Smart contractors keep a file of current certificates of insurance from every sub they work with and verify coverage before each new project.
The License Bond Requirement: What You Need to Know
Florida's contractor bond requirement changed significantly in 2022, and there's still confusion about how it works. Here's the current situation: if your FICO credit score is 660 or higher, you don't need to post a statewide contractor bond at all. This is a relatively recent change that eliminated the bond requirement for contractors with good credit.
If your credit score falls below 660, you have two options. Option one: complete a 14-hour financial responsibility course and post a reduced bond. Division I contractors (general, building, and residential contractors) would need a $10,000 bond, while Division II contractors (specialty trades) need $5,000. Option two: skip the course and post the full bond amount—$20,000 for Division I contractors or $10,000 for Division II.
The bond isn't insurance for you—it's protection for your customers. If a homeowner has a valid complaint against you and wins a judgment, they can make a claim against your bond. The surety company pays the homeowner, then comes after you to recover the money. Think of it as a guarantee that you'll fulfill your contractual obligations and follow Florida construction laws.
One important note: even though the statewide bond requirement has changed, many Florida cities and counties still require local contractor bonds. Before you start working in a new municipality, check with the local licensing board about additional bonding requirements. Some areas require bonds for specific types of work or projects above certain dollar amounts.
Certificates of Insurance: Your Paperwork Survival Guide
If you talk to any established Florida contractor, they'll tell you the same thing: managing certificates of insurance becomes a significant part of your administrative workload. You need certificates for your own coverage, certificates from every subcontractor, and you'll be providing certificates to nearly every client and general contractor you work with.
Your Certificate of Insurance must include specific information: the date it was issued, your business name exactly as it appears on your license, coverage types and amounts, policy numbers, and effective dates. For DBPR submissions, the certificate holder must be listed as the Department of Business and Professional Regulation and the Construction Industry Licensing Board. Get this wrong, and your application gets delayed or rejected.
Most job sites will require you to post your certificate of insurance on-site or have it immediately available for inspection. Homeowners, general contractors, and project managers routinely request certificates before allowing you to start work. Set up a system with your insurance agent to quickly generate certificates with different certificate holders—you'll be requesting them constantly.
What It Actually Costs and How to Get Started
The cost of contractor insurance in Florida varies widely based on your trade, coverage limits, claims history, number of employees, and annual revenue. General liability for a small specialty contractor might run $1,000 to $3,000 annually, while a general contractor with multiple crews could pay $5,000 to $15,000 or more. Workers' compensation costs are calculated per $100 of payroll and vary dramatically by trade—roofers pay significantly more than finish carpenters because of the injury risk.
License bonds are relatively inexpensive if you have decent credit. You don't pay the full bond amount—you pay a premium, typically 1-3% of the bond amount annually. A $10,000 bond might cost $100 to $300 per year. If your credit is poor, expect to pay higher premiums or potentially need to post collateral.
To get started, contact an insurance agent who specializes in contractor coverage—not your regular auto insurance agent. Contractor insurance has unique underwriting requirements, and you want someone who understands construction industry policies and Florida's specific requirements. Bring your contractor license information, details about your business structure, payroll estimates, and the types of work you perform. Many contractors bundle their general liability and workers' comp with the same insurer for better rates.
Yes, Florida's contractor insurance requirements are comprehensive. But they exist for good reasons—protecting homeowners, ensuring injured workers get care, and maintaining professional standards in the construction industry. Once you've got your coverage in place and understand the certificate management routine, these requirements become just another part of running your contracting business. The contractors who struggle are the ones who try to cut corners or don't stay on top of renewals. Stay compliant, keep your certificates organized, and verify your subs' coverage, and you'll avoid the headaches that sink less careful contractors.
