If someone is hurt on a site you qualify

Start with who has to be covered

Construction is treated differently from almost everything else in Florida, and the threshold catches people out.

All private employments in which four or more employees are employed by the same employer or, with respect to the construction industry, all private employment in which one or more employees are employed by the same employer. Florida Statute 440.02(20)(b)2.

One employee. Not four, which is the threshold for most other private industry. A two-man company doing construction needs coverage on the second man.

Officers and members are counted as employees by default, but the default can be displaced, and this is where certificates go stale.

• A corporate officer who files an election to be exempt with the department is not an employee. In construction, no more than three officers may elect, and each must own at least ten percent of the stock.
• An LLC member counts as an officer for this purpose if they own at least ten percent.
• An exemption certificate is valid for two years. An expired election is a live problem for whoever is relying on it.
• There is no sole proprietor exemption in construction. A sole proprietor, a partner and a partnership engaged in construction are all employees, and so is an independent contractor working in the construction industry.

The subcontractor rule that lands on the company you qualify

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).

It follows the subletting, not the license. Whoever sublets the work carries the liability if the subcontractor has not secured its own coverage. In practice that is the company whose license is yours.

Checking is not merely prudent. Florida Statute 440.10(1)(c) says a contractor shall require a subcontractor to provide evidence of workers compensation insurance. And the right to recover it back afterwards has a hole in it worth knowing about.

A contractor shall require a subcontractor to provide evidence of workers' compensation insurance. Florida Statute 440.10(1)(c).

• The contractor's right to recover from the subcontractor under 440.10(1)(d)1 does not apply where the two have agreed in writing that the contractor will provide the coverage. A clause in a subcontract can sign that right away before anybody is hurt.

The thing that turns a claim into a lawsuit

This is the provision the whole page exists for, and it is the one most often left out.

If an employer fails to secure payment of compensation as required by this chapter, an injured employee may elect to claim compensation under this chapter or to maintain an action at law. In such action the defendant may not plead as a defense that the injury was caused by negligence of a fellow employee, that the employee assumed the risk of the employment, or that the injury was due to the comparative negligence of the employee. Florida Statute 440.11(1)(a).

An insured employer is protected by the exclusiveness of liability. An uninsured one is not, and loses the three classic defenses on top. The injured worker chooses the forum, and the number stops being a schedule of benefits.

Insurance is not the paperwork around the risk. It is the thing that keeps the risk inside a system with limits.

The same protection has an upside people forget. Where a contractor does secure payment for a subcontractor's employees, it becomes their statutory employer, and the exclusiveness of liability in 440.11(1) then bars them from suing it in tort. Doing the right thing buys the immunity.

One provision is widely misread, including in an earlier version of this page. Florida Statute 440.10(1)(e) protects a subcontractor who has secured coverage from an action on account of injury to an employee of another subcontractor, or of the contractor. It is about claims crossing between parties on a site, not about a subcontractor's own injured employee, who is covered by that subcontractor's own policy.

What happens to the company, quickly

• A stop-work order. The Division of Workers' Compensation issues one to any employer required to secure coverage that has not, and it requires the employer to cease all business operations in the state.
• A penalty of twice the premium the employer would have paid, or $1,000, whichever is greater, under 440.107(7)(d)1.
• A further $1,000 per day for each day the employer operates in violation of the stop-work order, under 440.107(7)(c).
• Criminal exposure. Failing to obtain a Florida policy using Florida class codes for employees working here is a second degree felony under 440.10(1)(g). Filing false information on an exemption election is a third degree felony under 440.05(4). Compensation fraud is graded by value under 440.105(4)(f).

A stop-work order halts the jobs your license is on. That is the practical shape of the risk for a qualifier: not that you personally pay the claim, but that everything you are responsible for stops while you are responsible for it.

The reporting clock

Florida has no state OSHA plan, so federal OSHA covers most private sector work here. The deadlines are short and they start at the incident, not at the point somebody thinks to make a call.

• A fatality must be reported to OSHA within eight hours.
• An in-patient hospitalization, an amputation, or the loss of an eye must be reported within twenty-four hours.

If you are the qualifying agent, being the person who knows this on the day is worth more than anything else on this page. The company will be improvising. You should not be.

Where your license sits in all of it

Two grounds are the ones that matter after an injury, and neither of them is about insurance.

Committing gross negligence, repeated negligence, or negligence resulting in a significant danger to life or property. Florida Statute 489.129(1)(n).

When a certificateholder or registrant allows his or her certificate or registration to be used by one or more business organizations without having any active participation in the operations, management, or control of such business organizations, such act constitutes prima facie evidence of an intent to evade the provisions of this part. Florida Statute 489.129(1)(e).

The second one is the one that decides these cases. After a serious injury the question asked of a qualifying agent is rarely whether he was negligent on that particular day. It is whether he was ever there at all. Under 489.129(1)(a) the Board acts against the license where the contractor or the business organization he qualifies is found guilty, so his exposure and the company's are not separate stories.

On the civil side, the picture is better than most people assume. The immunity that protects an insured employer extends by statute to supervisors and to people acting in a managerial or policymaking capacity within the scope of those duties, and to each employee of the employer, subject to a carve-out for willful and wanton conduct. A qualifier who is an officer or employee of a properly insured company has a real statutory argument, not just a hope.

What to do about it before you sign

• Verify coverage against the state rather than a certificate. The Division of Workers' Compensation publishes coverage at dwcdataportal.fldfs.com/ProofOfCoverage.aspx and exemptions at dwcdataportal.fldfs.com/Exemption.aspx.
• Check every exemption certificate's date. Two years, and then it is nothing.
• Read the subcontract for a clause that makes the contractor provide the subs' coverage, because that clause removes the recovery right in 440.10(1)(d)1.
• Ask how the company verifies its subs, and ask to see the last three certificates it collected. The answer to the second question tells you whether the answer to the first was true.
• Ask what happened the last time somebody was hurt. Then check OSHA's establishment search at osha.gov/ords/imis/establishment.html.