Florida requires most employers to carry workers’ compensation insurance, but the rule that applies to you depends on your industry and how many people you employ. For Naples and Southwest Florida business owners, a contractor with one employee and a restaurant with three part-time servers can face very different requirements.
This guide explains Florida’s coverage thresholds, how owner exemptions work, what contractors must check before a subcontractor starts work, and the penalties for operating without required coverage. When you are ready to compare options, see our page on workers’ compensation insurance in Naples.
Who needs workers’ compensation in Florida?
The Florida Division of Workers’ Compensation sets the requirement by industry. Business owners who are corporate officers or LLC members count toward the total unless they hold an approved exemption.
- Construction: one or more employees. The trades the state treats as construction are listed in Rule 69L-6.021 of the Florida Administrative Code.
- Non-construction: four or more employees, full-time or part-time.
- Agriculture: six regular employees, and/or 12 seasonal workers who work more than 30 days in a season or more than 45 days in the same calendar year.
Sole proprietors and partners in a non-construction business are not counted as employees unless they elect coverage by filing Form DWC-251 with the Division. Read more: Florida Division of Workers’ Compensation coverage requirements.
Construction businesses: the one-employee rule
With so much building and storm-repair work across Southwest Florida, many local businesses fall under the construction rules. Florida’s workers’ compensation law does not recognize independent contractors in the construction industry: a worker is either a business owner or an employee of a business.
If you hire subcontractors, you must confirm they have coverage before they start on your project. If a subcontractor’s workers are not covered, those workers are treated as your employees, and you become responsible for benefits if one of them is hurt. To document a subcontractor’s coverage, the state accepts items such as the information page of the subcontractor’s policy, a screen print from the Division’s Proof of Coverage database, or a certificate of liability insurance with written confirmation from the producer or carrier. If the subcontractor’s owners are exempt, keep a copy of their exemption or a screen print from the Division’s Exemption Search database. Our construction insurance page covers the other policies contractors usually need.
Restaurants, shops, offices and other non-construction businesses
Outside construction, coverage is required once you have four or more employees, and part-time staff count. In Naples that matters during the winter season, when restaurants, shops and service businesses often add help. A business that is under the threshold in summer can cross it when seasonal hires start.
Non-construction businesses can work with genuine independent contractors, but Florida law sets specific criteria, and the worker must be able to show they meet them. A business owners policy (BOP) covers property and liability, but workers’ compensation is a separate policy. Restaurant owners can also see our restaurant insurance page.
How owner exemptions work
Corporate officers and LLC members can apply to the Division to be exempt from coverage for themselves. An exemption covers the individual, not the business, and an exempt owner cannot collect workers’ compensation benefits if they are hurt on the job. Employees still need coverage.
- Construction: the company must be active with the Florida Division of Corporations, a corporate applicant must be listed as an officer, each applicant must own at least 10 percent, no more than three officers or members per company (including affiliated companies) can be exempt, and there is a $50 application fee.
- Non-construction: corporate officers must be listed as officers of a corporation that is registered and active with the Florida Division of Corporations. LLC members must own at least 10 percent, and up to 10 members can be exempt.
Applications and renewals are filed online with the Division and require a valid driver’s license. Read more: Florida workers’ compensation exemptions.
What it costs to go without coverage
Florida treats a missing workers’ compensation policy as a serious danger to public safety. When the Department of Financial Services finds an employer without required coverage, it can issue a stop-work order that halts business operations at all of the employer’s Florida worksites, and the order stays listed on the Division’s website for at least five years. Penalties include:
- Twice the premium you would have paid for the uncovered period in the previous 12 months, or $1,000, whichever is greater. A 24-month look-back applies to repeat violations and understated payroll.
- $1,000 for each day you keep operating in violation of a stop-work order.
- A $5,000 penalty for each worker treated as an independent contractor who does not meet the legal definition.
Understating payroll or misrepresenting what employees do in order to lower the premium is treated the same as having no coverage.
What affects your workers’ comp premium
According to the Division, premium is based on three main factors: your payroll, the type of work your employees do (their classification codes), and your claims history. Discounts may be available, including 2 percent for a qualifying workplace safety program and 5 percent for a certified drug-free workplace program; each must be renewed every year. If standard insurers will not offer coverage, your insurance agency can apply to the Florida Workers’ Compensation Joint Underwriting Association, where rates are higher than in the standard market. The employer pays the entire premium; it cannot be passed on to employees.
What to have ready for a quote
- A short description of what each employee does day to day.
- Estimated annual payroll by type of work, including part-time and seasonal staff.
- Owners who hold an exemption, or who want to be covered.
- Subcontractors you use, with copies of their coverage or exemptions.
- Prior policies and claims history for the last few years.
- Any work your business does outside Florida.
PRK Insurance Inc is a full-service insurance agency in Naples. We can review your payroll, job classifications and subcontractor setup and compare workers’ compensation options for your business. Call 239-799-5884 or request a quote.
Frequently asked questions
Do part-time employees count toward Florida’s four-employee rule?
Yes. For non-construction businesses, the four-employee threshold includes part-time and full-time employees, plus any corporate officers or LLC members who are not exempt.
Does an owner’s exemption cover my employees?
No. An exemption applies only to the officer or member who holds it. Anyone else you employ still counts toward the threshold and needs coverage once you meet it.
Can an out-of-state contractor use its home-state policy in Florida?
Usually not for ongoing work. Construction employers with employees working in Florida generally need a policy from a Florida-licensed insurer with Florida listed on the policy’s information page. Some states have reciprocity agreements that allow short, temporary jobs of no more than 10 consecutive days and 25 total days in a calendar year.
How quickly do I need to report a work injury?
Report it to your insurance carrier right away. Florida requires employers to file the First Report of Injury or Illness (Form DWC-1) with the carrier within 7 days of first learning about the injury, even if you are not sure it is covered.
This article provides general information about Florida workers’ compensation requirements, not legal advice or a coverage guarantee. Requirements can change, so confirm your obligations with the Florida Division of Workers’ Compensation. Policy terms, eligibility and pricing vary by insurer.
