Why This Matters: Florida's Sub-as-Employee Rule
Florida law is unambiguous on this point: if a subcontractor cannot prove they carry workers' comp coverage, the general contractor's policy treats the sub's workers as the GC's employees. At year-end audit, the auditor adds the sub's payroll to the GC's payroll and charges premium at the GC's class code rates. The GC pays for coverage they thought the sub was providing.
This rule catches Florida contractors by surprise constantly. You hired a licensed, professional sub. You paid them via check. You have a signed contract. None of that matters to the auditor if you can't produce a valid certificate of insurance showing active workers' comp coverage for the dates the sub worked.
What a Valid Certificate of Insurance Looks Like
The standard form is the ACORD 25 - Certificate of Liability Insurance. Workers' comp coverage appears in section E of that form. A valid COI for workers' comp purposes must show:
- The insured's name - must match the company doing work for you
- The carrier - must be an insurance company admitted in Florida, not a non-admitted surplus lines carrier in most cases
- The policy number - a real policy number, not a placeholder
- Effective and expiration dates - must cover the dates the sub is working on your project
- Florida listed as a covered state - or "all states" coverage
- Workers' compensation checked - the form has a specific box for WC; it must be checked and populated
A COI that shows general liability only is not sufficient for workers' comp purposes. You need to see the workers' comp section specifically. An email saying "we have coverage" is not a COI. A verbal confirmation is not a COI. Only the actual ACORD 25 form counts.
How to Verify a Certificate
Certificates can be fraudulent. A dishonest sub can produce a convincing-looking ACORD 25 for a policy that was cancelled months ago or never existed. The only reliable verification is calling the carrier directly using a number you look up yourself - not one the sub provides. Give the carrier the policy number from the certificate and ask if the policy is currently active and valid in Florida.
You can also check workers' comp coverage directly through the Florida DFS Proof of Coverage lookup at apps8.fldfs.com/proof_of_coverage/. Enter the company name or FEIN and the system shows active coverage and active exemptions. This is free, takes 30 seconds, and is the fastest way to verify whether a Florida company is legitimately covered.
Exemption Certificates - A Valid Alternative
Florida allows corporate officers and LLC members to file exemptions from workers' comp. An active exemption certificate is a valid substitute for a workers' comp COI - but only for the exempt individual. An exemption covering one owner-operator who works alone is legitimate. An exemption for a company officer who has three uninsured field employees working under them is not - the exemption covers only the officer, and those field workers are still uninsured.
To verify an exemption certificate is current, check the DFS proof of coverage site. Exemptions expire every two years, and a sub might present you with an expired exemption certificate thinking it's still valid. Always verify the status is "active" in the DFS system before accepting it as proof of coverage.
| What Sub Provides | Valid for Audit Protection? | Action Required |
|---|---|---|
| Valid ACORD 25 with active WC policy | Yes - if dates cover work period | File and track expiration date |
| Active DFS exemption (owner-only crew) | Yes - for the exempt officer | Verify on DFS site; confirm no non-exempt employees |
| Expired COI | No - coverage gap exists | Do not let sub work until renewed cert received |
| Expired exemption certificate | No | Verify on DFS site; require renewal or policy |
| Email saying "we're covered" | No | Require actual ACORD 25 form |
| Nothing - sub can't produce anything | No - their payroll added to your audit | Do not use this sub or require them to get coverage first |
Building a COI Tracking System
The best practice is to require a COI before the sub starts any work, not after. Build it into your subcontractor onboarding process: no COI, no contract, no start date. Then track expiration dates. A COI that expires in March doesn't protect you for April work - and many subs forget to send renewals without a reminder.
A simple spreadsheet works fine for small operations: sub name, carrier, policy number, expiration date, date received. Set a calendar reminder 30 days before each expiration to request a renewed certificate. Larger operations use their accounting or project management software to track this. Either way, the system only works if you actually enforce it - a COI policy that gets waived for preferred subs defeats the purpose.
How PEO Solves This for Your Own Workforce
The sub certificate problem applies to contractors you hire separately. For your own W-2 employees, a PEO program eliminates the complexity entirely. All your employees are covered under one policy, your certificate is clean and current, and you can produce proof of coverage instantly for any GC or owner who requests it. No chasing down paperwork, no expired certs in the file, no audit exposure from your own people.
You still need to collect COIs from the subs you hire. But at least the coverage for your own workforce is handled cleanly with a pay-as-you-go PEO program.
Frequently Asked Questions - Subcontractor Certificates
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