If you're running a plumbing business in Florida, you already know the state doesn't mess around when it comes to licensing and insurance. The Florida Department of Business and Professional Regulation keeps tight oversight on who can legally work as a plumbing contractor, and insurance is a non-negotiable part of that equation. But here's what catches most plumbers off guard: the state minimums for insurance are just the starting line. The real requirements you'll face on actual jobs are often much higher.
Whether you're a solo plumber thinking about going out on your own or an established contractor hiring your first crew member, understanding Florida's insurance requirements isn't optional. It's the difference between operating legally and facing fines, license suspension, or worse. Let's break down exactly what you need to know.
Florida Plumbing Contractor License Requirements
Before we dive into insurance specifics, you need to understand that Florida offers two types of plumbing contractor licenses. The Certified Contractor License allows you to work anywhere in the state, while the Registered Contractor License limits you to specific local jurisdictions where you've met their requirements. For most plumbing contractors aiming to grow their business, the certified license is the way to go.
Florida plumbing contractors fall under Division II specialty contractor licenses. Your license expires every two years on August 31st of even-numbered years—so mark your calendar for 2026, 2028, and beyond. Missing that renewal deadline can shut down your business faster than a frozen pipe in winter.
General Liability Insurance: State Minimums vs. Real-World Needs
Here's where things get interesting. To get your plumbing contractor license in Florida, you need general liability insurance with at least $100,000 in coverage and property damage insurance with a minimum of $25,000. That's what the state requires. But that's like showing up to a hurricane with an umbrella.
In practice, most contracts—especially commercial work or jobs with general contractors—require at least $1 million per occurrence and $2 million aggregate coverage. High-rise projects and large commercial complexes often double those amounts. Why? Because one serious leak in a commercial building can cause hundreds of thousands in damage. Your $100,000 state-minimum policy would be exhausted before the restoration company even shows up.
Smart plumbing contractors carry $1 million to $2 million in general liability coverage from day one. Yes, it costs more than the bare minimum, but it opens doors to bigger, more profitable jobs. Many general contractors won't even let you on site without proof of $1 million in coverage and additional insured status on your policy.
Workers' Compensation: The One-Employee Rule
This is where Florida plumbing contractors get hit with a surprise. In the construction industry—which includes plumbing—you need workers' compensation insurance with just one employee. That's right: one. Hire a single helper, even part-time, and you're legally required to carry workers' comp.
This is different from non-construction businesses in Florida, which can have up to three employees before workers' comp kicks in. But the state considers plumbing work inherently risky, so the threshold is lower. Corporate officers and LLC members with at least 10% ownership can apply for an exemption, but no more than three officers or members can be exempt per company.
Here's another curveball: if you hire independent contractors for plumbing work in Florida, they must be covered under your workers' compensation policy unless they can prove they have their own coverage. The state doesn't want contractors using the "1099 loophole" to avoid workers' comp obligations.
Surety Bonds and Financial Responsibility
Florida uses credit scores as a measure of financial responsibility for plumbing contractors. If your FICO score is 660 or higher, you're good to go. But if your score falls below 660, you'll need to post a $10,000 surety bond for your Division II contractor license. The good news? You can cut that bond requirement in half to $5,000 by completing a state-approved 14-hour financial responsibility course.
Bond costs typically run 1% to 3% of the bond amount, depending on your credit and experience. So a $10,000 bond might cost you $100 to $300 annually—not a huge expense, but one more item to budget for. Since April 2022, Florida no longer requires statewide contractor bonds, but many counties and municipalities still require local bonds. Check with your city or county licensing department to see what's required in your area.
What Happens If You Don't Maintain Coverage
Your insurance isn't something you get once for licensing and then forget about. The Florida DBPR requires proof of continuous coverage. If your general liability or workers' comp policy lapses, your contractor license can be suspended immediately. That means you can't legally work, can't bid on jobs, and can't collect payment for ongoing projects.
Insurance companies are required to notify the state if your policy is cancelled or not renewed. There's no grace period, no warning letter. One day you have an active license, the next day you don't. And getting it reinstated involves paperwork, fees, and potentially re-proving your insurance coverage—all while you're losing money and potentially losing clients.
Additional Coverage to Consider
Beyond the state-mandated coverage, successful Florida plumbing contractors typically carry several additional policies. Commercial auto insurance is essential if you're driving company vehicles to job sites—your personal auto policy won't cover business use. Tools and equipment coverage protects your investment in specialized plumbing tools, which can easily run into tens of thousands of dollars.
Professional liability insurance, sometimes called errors and omissions coverage, protects you if a design flaw or professional mistake leads to property damage or injury. This is increasingly important as plumbing contractors take on more complex commercial and multi-family projects. And umbrella policies provide an extra layer of liability coverage above your standard limits, typically at a relatively low cost.
How to Get Started
Start by getting quotes from insurance agents who specialize in contractor coverage. Not all insurance companies understand the unique risks plumbing contractors face, so working with someone who knows the industry can save you money and ensure you get the right coverage. Shop around—premiums can vary significantly between insurers, especially for workers' compensation.
Be upfront about your business operations, annual revenue, number of employees, and types of projects you handle. Accurate information leads to accurate quotes and prevents coverage disputes later. Once you have your insurance in place, keep your certificates of insurance current and readily available—you'll need to provide them for licensing, contract bids, and often before you can even step foot on a job site.
Meeting Florida's insurance requirements for plumbing contractors isn't just about checking boxes for your license. It's about protecting your business, your employees, and your ability to compete for the jobs that will grow your company. The investment in proper insurance coverage pays for itself the first time you avoid a devastating lawsuit or qualify for a major contract that requires higher limits. Don't settle for bare minimums—build a insurance foundation that supports your ambitions.
