If you're running a demolition contractor business in Florida, you're dealing with one of the highest-risk trades in construction. Between the heavy equipment, structural hazards, and potential for catastrophic accidents, getting your insurance right isn't just a licensing requirement—it's your financial safety net. Here's what makes Florida different: the state treats demolition contractors as construction industry businesses, which means stricter requirements than most other trades. Let's break down exactly what coverage you need, what it costs, and how to stay compliant with Florida's Department of Business and Professional Regulation.
Florida Demolition Contractor Licensing Requirements
Before we dive into insurance, you need to understand Florida's licensing structure because it directly affects your insurance requirements. As of 2026, Florida requires a state contractor's license for all demolition work on buildings and residences, regardless of height. This changed in 2012 when Senate Bill 704 expanded the definition of "demolish" beyond just structures over 50 feet tall.
You have several licensing options depending on the scope of your demolition work. A certified general contractor license allows you to demolish any building, residence, or structure without restrictions. A certified building contractor license covers any residence or commercial building up to three stories. A certified residential contractor license limits you to residences not exceeding three stories. Each requires passing a state certification exam covering contract administration, project management, and business practices, plus demonstrating four years of experience (or a combination of education and work experience).
Here's something critical if you currently hold a local specialty contractor license: as of July 1, 2025, Florida is ending all local specialty contractor licensing extensions. Senate Bill 1142 means if you're operating as a local 'registered' contractor, you must transition to a state-wide 'certified' contractor by that deadline. This isn't optional, and it affects your insurance requirements since state certification has more stringent standards.
Workers' Compensation Insurance: The One-Employee Rule
This is where Florida demolition contractors face their strictest requirement. Unlike non-construction businesses that need workers' comp only when they have four or more employees, construction industry businesses—including demolition contractors—must carry workers' compensation insurance with just one employee. That's right: hire your first worker, and you need a policy in place immediately.
The Florida Chief Financial Officer's Division of Workers' Compensation enforces this strictly. You cannot obtain or renew your contractor's license without proof of an active workers' comp policy or a valid exemption. For demolition work, workers' comp rates tend to be among the highest in construction because of the inherent risks—expect to pay anywhere from $15 to $40 per $100 of payroll depending on your loss history and specific classification codes.
If you're a business owner, corporate officer, or LLC member, you can claim an exemption from workers' comp coverage, but there are specific rules. You must own at least 10% of the company and be officially listed as an officer in the company's corporate records. No more than three officers can claim exemption in a construction company. The exemption costs $50 and must be renewed every two years. Important caveat: if you claim an exemption for yourself but have even one employee, you still need a full workers' comp policy to cover that employee.
General Liability Insurance Minimums
Florida requires all contractors to maintain general liability and property damage insurance as a condition of licensure. The minimum amounts depend on your license type. For most specialty contractors, including demolition contractors operating under a specialty license, you need at least $100,000 in bodily injury liability coverage and $25,000 in property damage coverage.
However, if you hold a certified general contractor or building contractor license, the requirements jump to $300,000 for bodily injury coverage and $50,000 for property damage. When you submit your application for initial licensure or renewal, you must provide a signed affidavit attesting that you have obtained and will maintain these insurance minimums for the duration of your license period.
Here's the reality check: while these are the state minimums for licensing, they're woefully inadequate for actual demolition work. Most commercial clients and project contracts require at least $1 million in general liability coverage, and many require $2 million or more. A single structural collapse during demolition could easily result in claims exceeding $100,000. Don't just meet the minimum—get coverage that actually protects your business. Most demolition contractors carry between $1 million and $2 million in general liability coverage with aggregate limits of $2 million to $4 million.
Surety Bond Requirements and Additional Coverage
Beyond insurance, Florida requires surety bonds for contractor licensing. The financially responsible officer for your construction business must provide a $100,000 surety bond, which must be maintained for as long as that individual holds the financially responsible officer position. This bond guarantees reimbursement to clients if you fail to fulfill contract terms or adhere to building codes.
Many demolition projects also require project-specific performance and payment bonds, especially for municipal or commercial work. These bonds typically equal the contract value and guarantee you'll complete the work and pay subcontractors and suppliers. Bond premiums usually range from 1% to 3% of the bond amount depending on your credit history, business financials, and experience.
While not required by the state, most demolition contractors also carry commercial auto insurance for their trucks and equipment haulers, inland marine coverage for their heavy equipment (excavators, wrecking balls, bulldozers), and often pollution liability insurance since demolition can involve asbestos, lead paint, or other hazardous materials. These additional coverages protect you from risks that general liability doesn't cover.
Getting Your Insurance in Place
Start by working with an insurance agent who specializes in construction and demolition contractors. Not all insurance companies write policies for demolition work because of the high risk, so you need someone who knows which carriers will offer competitive rates. Expect to provide detailed information about your operations, including types of structures you demolish, square footage per project, annual revenue, payroll, years in business, and loss history.
Your workers' comp rates will be based on your classification codes and payroll. Demolition contractors typically fall under NCCI class codes like 5507 (wrecking and demolition) or similar state-specific codes. Maintaining a strong safety program, investing in proper equipment, and minimizing claims will help you qualify for better rates over time. Many carriers offer premium credits for documented safety training programs and OSHA compliance.
Once you have your insurance and surety bond in place, you'll submit proof to the Department of Business and Professional Regulation as part of your license application or renewal. Keep copies of your certificates of insurance, policy declarations pages, and bond documents. Your license won't be issued or renewed without them, and you're required to maintain continuous coverage throughout your license period. If your policy lapses, your license can be suspended or revoked.
Demolition contracting in Florida requires serious insurance investment, but it's the price of operating legally and protecting your business from potentially catastrophic losses. With the right coverage, proper licensing, and a commitment to safety, you can build a successful demolition business while staying fully compliant with Florida's requirements. Don't cut corners on insurance—it's the foundation of your entire operation.
