What to check before you qualify a company

Why the order matters

By the time a company is answering your questions, you are already in a conversation you want to go somewhere. The records do not know that. Pull them first, before anyone has been charming at you, and you will read them differently.

You are never more objective about a company than in the hour before you speak to it.

The entity itself

Florida's Division of Corporations is free, instant, and requires nothing from the company.

• Search the company by name at search.sunbiz.org/Inquiry/CorporationSearch/ByName. You want the document number, the filing date, and the status. Active, INACT, or INACT/UA all mean different things and only the first is good news.
• Search the people at search.sunbiz.org/Inquiry/CorporationSearch/ByOfficerOrRegisteredAgent. This is the more useful search of the two, because it shows you every other entity the same officers are attached to.
• Compare the filing date against the experience you are being told about. A company formed six weeks ago describing nine years of work is describing somebody else's nine years, and that is worth understanding rather than assuming the worst about.

• Sunbiz shows what was filed, not what is true. Officer and agent data is self-reported and refreshed on an annual report cycle, so a name match confirms a filing rather than a person.

Licensing history, including who held it before you

• Check anyone who claims a license at myfloridalicense.com/wl11.asp?mode=0. Search by name as well as by number, because the two searches return different things, and tick Include Historic Licenses.
• Read the Board's own discipline files at www2.myfloridalicense.com/construction-industry/public-records/, which publishes disciplinary data for licensed contractors, unlicensed activity, and the recovery fund.

And a company's previous qualifiers are public as well, which two earlier versions of this page managed to get wrong in opposite directions. DBPR publishes a License Relationships view: look the company up on the licensee search, open its record, and the related licenses are listed with their dates, former qualifiers included. Free, about three clicks, and the most useful thing on this page.

So if a company has been through three qualifiers in four years, you can know that before you speak to anybody. Ask them anyway, and compare their answer to the record. What is missing from what you were told is worth more than anything in the file itself. Where the online record is thin, a public records request to DBPR under Chapter 119 at www2.myfloridalicense.com/instant-public-records/ will get the rest.

Insurance, and what a certificate is not

This is where most checking goes wrong, because the document everyone treats as proof says on its own face that it is not proof.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). ACORD 25, printed on the form itself.

• A certificate is a snapshot. It can be accurate on Tuesday and worthless on Wednesday, and nobody has to tell you.
• Certificate holder and additional insured are different things. Being listed as a holder means you get told. Being an additional insured requires an endorsement to the policy. Ask for the endorsement, not the certificate.
• Check the dates, the named insured, and whether the entity on the certificate is the entity you are being asked to qualify. Those three fields are where the problems live.
• Verify workers compensation against the state instead of the paper. Florida's Division of Workers' Compensation publishes coverage at dwcdataportal.fldfs.com/ProofOfCoverage.aspx, built from what the carriers themselves filed, and exemptions at dwcdataportal.fldfs.com/Exemption.aspx.

That exemption search is worth more attention than it usually gets. In construction, no more than three corporate officers may elect to be exempt, each must own at least ten percent, and an election is valid for two years. A stale exemption is a live problem, and it becomes yours.

There are statutory minimums, and they are lower than you would want. Rule 61G4-15.003 sets $300,000 liability and $50,000 property damage for Division I contractors, $100,000 and $25,000 for Division II. Meeting the minimum is not the same as being insured for the work.

Sites, injuries and the subcontractor question

• OSHA inspection history is public at osha.gov/ords/imis/establishment.html. Florida has no state plan, so federal OSHA covers most private sector work here and this is the file.
• Liens, judgments and notices of commencement are county records. Start from myfloridacounty.com/official_records/index.html, which now selects a county and hands you off to that Clerk's own site. There is no single statewide search.
• Permit and inspection history is held by each local building department. No statewide system exists, but the records are public under Chapter 119 and a failed inspection history is exactly what you want to see before you sign.

• Do not waste time on CCIS, the statewide court case system. Its own sign-in page restricts it to governmental use. Civil history has to be run county by county.

Then the question that is not about the company's paperwork at all, but about the people it hires.

In case a contractor sublets any part or parts of his or her contract work to a subcontractor, all of the employees of such contractor and subcontractor are deemed to be employed in one and the same business, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment. Florida Statute 440.10(1)(b).

And it is not merely advisable to check. Florida Statute 440.10(1)(c) says a contractor shall require a subcontractor to provide evidence of workers compensation insurance. So ask a company how it verifies its subs, and understand that the honest answer tells you whether it knows the law it is already subject to.

What the statute gives you, and it does give you something

An earlier version of this page said your protection is not in the statute. That was wrong, and the sentence it missed is the most useful one in Chapter 489 for somebody in your position.

Any change in the status of a qualifying agent is prospective only. A qualifying agent is not responsible for his or her predecessor's actions but is responsible, even after a change in status, for matters for which he or she was responsible while in a particular status. Florida Statute 489.1195(3)(d).

Whatever this company did before you arrive is not yours. That is worth knowing before you walk into a place with a history, because the history is not what you are taking on. The management that produced it is.

There is leverage in the other direction too. A business organization with no qualifying agent is unlicensed for the purposes of Florida Statute 489.128, and an unlicensed contractor's contracts are unenforceable by it, with no lien or bond claim available. The day you leave, that is what happens to the company. Knowing it changes the tone of a negotiation.

What you cannot look up, and have to ask

• Who qualified the company before you, and why they stopped. Records request, or ask.
• Who is actually on the sites. Employees, subs, day labor, and how any of it is verified.
• Who approves payments today, and whether that changes when you sign.
• What happens the first time you stop a job. Ask it directly and listen to the pause.
• Whether they will designate a financially responsible officer. Expect resistance, because it requires Board approval and a $100,000 bond or letter of credit under Rule 61G4-15.0021(2), and find out whether the resistance is about money or about control.

• If you are told you will not need to be involved, that is the whole conversation. Under Florida Statute 489.129(1)(e), allowing your license to be used without active participation in the operations, management or control is prima facie evidence of an intent to evade, which means the Board does not have to prove what you intended. Your absence is the evidence.
• Under Florida Statute 489.127(4)(a) an agreement to let your number be used by a business that is not duly qualified is a first degree misdemeanor, and a third degree felony on a repeat.