Florida Contractor Insurance Requirements: Comp, Liability, Bond

Short answer: For a Florida contractor, insurance is not optional. Florida requires workers’ compensation from any construction employer with one or more employees, and Florida Statutes 440.02 treats a sole proprietor engaged in the construction industry as an employee — so the “I work alone, I’m exempt” route that works in other states is closed here. Only corporate officers and LLC members owning at least 10 percent may file a construction industry exemption, three per company. Liability insurance is a DBPR licensing condition, not optional.

Florida splits contractor rules across agencies that never send you a combined checklist. Federal tax runs through the IRS; the state revenue authority is the Florida Department of Revenue, and because Florida levies no personal income tax there is no state return — though sales and use tax registration is separate, and covered in Florida sales tax for contractors. Insurance is split again: the Department of Business and Professional Regulation and its Construction Industry Licensing Board tie insurance to your license, while the Division of Workers’ Compensation inside the Department of Financial Services runs comp and exemptions. If you are still choosing a business structure, do I need an LLC to freelance matters more here than almost anywhere, for reasons that become clear below.

Which insurance does Florida actually make mandatory?

Sorted by what forces the issue:

Cover	Mandatory?	What triggers it	Who enforces
Workers’ compensation	Yes, in construction	One or more employees	Division of Workers’ Compensation
Public liability and property damage	Yes, to hold a license	Certification or registration	DBPR / CILB
Financially Responsible Officer bond	Only if you designate an FRO	Company structure	DBPR / CILB, by rule 61G4-15.0021
Statutory new home warranty	Yes, on new homes	Building a home not previously occupied	Nobody — s. 553.837 is enforced only by the purchaser suing you

Two of those four are ones contractors in other states routinely assume they can skip. Florida does not.

Does a one-person construction business need workers’ comp in Florida?

The rule that catches people is written into the definitions rather than the coverage section. Florida Statutes 440.02 puts “a sole proprietor who engages in the construction industry and a partner or partnership that is engaged in the construction industry” inside the definition of employee. You are not the boss standing outside the scheme — you are a person the scheme counts.

Stack that against the thresholds:

Sector	Coverage required at
Construction	One or more employees
Non-construction	Four or more employees
Agriculture	Excluded where the farmer employs five or fewer regular employees and fewer than twelve seasonal workers at one time

“Construction industry” is defined broadly — for-profit activities involving any building, clearing, filling, excavation, or substantial improvement in the size or use of any structure or the appearance of any land. Landscaping that reshapes a lot, demolition and site clearing sit inside it, not just framing and roofing. Check your facts with the Division before assuming you are outside the scheme.

Who can actually get a Florida construction industry exemption?

The exemption exists — it is simply not available to the business form most one-person contractors use. It is a corporate mechanism.

Under 440.02, no more than three officers of a construction industry corporation may elect exemption, and each must be a shareholder owning at least 10 percent of the stock. Members of an LLC owning at least 10 percent are treated as officers for this purpose. Incorporate or form an LLC, hold at least a tenth of it, and file a Notice of Election to be Exempt with the Division of Workers’ Compensation.

In Florida, then, forming an entity is not a tax convenience for a construction trade — it is the difference between being locked inside the mandatory comp scheme and being able to elect out. The exemption is applied for, granted and printed as a certificate; it is not something you assert on an invoice.

Is liability insurance a condition of your Florida contractor license?

Yes, and it is a condition of keeping the license, not just getting it. Florida Statutes 489.115 requires an affidavit attesting that the applicant has obtained workers’ compensation insurance as required by chapter 440, plus public liability and property damage insurance “for the safety and welfare of the public, in amounts determined by rule of the board.” The board’s rule is 61G4-15.003, and its figures split two ways:

Category	Public liability	Property damage
General contractor and building contractor	$300,000	$50,000
Residential contractor, roofing, plumbing, mechanical, air conditioning, sheet metal, pool, solar, underground utility and excavation, pollutant storage, and specialty contractors unless otherwise specified	$100,000	$25,000

Read that second row carefully before you assume the higher tier applies to you. A residential contractor — the licence most people building houses in Florida actually hold — sits at $100,000 and $25,000, not $300,000. The rule also requires the certificate holder to be the Construction Industry Licensing Board itself, the policy to be carried in the licensee’s name, and the cancellation notice to give the Board thirty days’ warning. The Board audits by zip code at random and gives you thirty days to produce proof.

Section 489.115 also lets an applicant submit an affidavit attesting that they will obtain a workers’ compensation exemption within 30 days after the initial certificate or registration is issued. That is a sequencing allowance, not a grace period to leave open.

Do you need a bond to be licensed in Florida?

Not universally — Florida’s bonding requirement is conditional rather than flat. Rule 61G4-15.0021 provides that if a business organization has a Financially Responsible Officer, that officer “shall provide to the Department a bond or irrevocable letter of credit, in the amount of $100,000 payable to the Board for fines and costs.” Note what that bond is for: it backs fines and costs, not your customer’s completed work. It is not a performance bond and no Florida homeowner can claim on it.

Financial responsibility itself is tested rather than bonded. Section 489.115 requires the applicant to “furnish a credit report from a nationally recognized credit agency that reflects the financial responsibility of the applicant,” and Rule 61G4-15.006 — amended in 2024 — turns that into two numbers. The report must not disclose any unsatisfied judgments or liens against you or the business entity you are qualifying. And the Board refuses on financial stability grounds for “failure to provide proof of a credit score, FICO derived, of 660 or higher.”

There is one off-ramp, and the statute and the rule describe it from different angles. Section 489.115 says “Fifty percent of the financial requirements may be met by completing a 14-hour financial responsibility course approved by the board.” Rule 61G4-15.006(2)(b) puts it more plainly: applicants who cannot show a FICO-derived 660 meet the financial stability requirement by completing that 14-hour course. Florida puts a personal credit score at the centre of a construction licence, which is unusual, and it means your credit file is part of the application file.

Is home warranty insurance required on a Florida new home?

There is a mandatory warranty, but calling it insurance is the mistake. Florida Statutes 553.837, “Mandatory builder warranty,” was created by chapter 2024-95, Laws of Florida — CS/CS/HB 623 — which was approved in April 2024 with a delayed commencement: “This act shall take effect July 1, 2025.” So the obligation is young, and homes conveyed before that date sit outside it. A “newly constructed home” is defined as a single-family dwelling, duplex, triplex or quadruplex “that has not been previously occupied.” The section requires a builder to warrant such a home against construction defects of equipment, material or workmanship furnished by the builder or any subcontractor or supplier that result in a material violation of the Florida Building Code. The mechanics:

• The term is one year, running from the original conveyance of title or initial occupancy, whichever occurs first.
• It survives a sale — the builder holds it for the full one-year period “even if the newly constructed home is sold or transferred.”
• It reaches subcontractor and supplier work, but the obligation sits on the builder.
• It excludes normal wear and tear, normal settling, defects arising from work by purchasers or third parties, and losses beyond the builder’s control.
• A builder may purchase a warranty from a home warranty association under chapter 634 to cover it — an option, not a requirement.
• Enforcement “is limited to a private civil cause of action by a purchaser against any builder that fails to comply.” No regulator polices it; the buyer sues.

So there is no compulsory warranty policy here the way some jurisdictions run one. There is a statutory promise you owe personally, which you may choose to insure — and if you do not, the person who collects on it is your customer’s attorney.

Does being registered rather than certified change your obligations?

It changes where you can work and who else asks you for paperwork. DBPR draws the line clearly: a certified contractor holds a certificate of competency issued by the department “and who shall be allowed to contract in any jurisdiction in the state without being required to fulfill the competency requirements of that jurisdiction.” A registered contractor “has registered with the department pursuant to fulfilling the competency requirements in the jurisdiction for which the registration is issued. Registered contractors may contract only in such jurisdictions.”

Registration is therefore county- or municipality-anchored, and the jurisdiction that granted your competency can add conditions on top of the state’s — local bonding and insurance filings are common. The state minimums are a floor, not a ceiling.

What paperwork does all this leave you holding?

Certificates of insurance issued to clients and collected from every sub. Exemption certificates for each qualifying officer. Bond documentation if you named an FRO. Warranty start dates keyed to conveyance or occupancy. Then the financial trail that has to survive an audit years later — see how long to keep tax records, and contractor receipt organizer if receipts are the weak link.

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State the boundary plainly: Keel is a record keeper, not a compliance tool. It does not file a Notice of Election to be Exempt, arrange insurance, renew a DBPR license or register a warranty. It issues numbered PDF invoices carrying your logo and a payment-link QR code, reads receipts on device with Apple Intelligence, logs mileage, and holds everything in an append-only, hash-chained ledger the Accountant Pack exports as one file per year.

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Frequently asked questions

Can a sole proprietor in Florida construction opt out of workers’ compensation? No. Florida Statutes 440.02 includes a sole proprietor engaged in the construction industry, and a partner or partnership engaged in it, within the definition of employee. The construction industry exemption is written for corporate officers and LLC members, so a sole proprietorship has no eligible person to file it for.

How many employees trigger workers’ comp in Florida construction? One. Construction employers need coverage at one or more employees, while non-construction employers are not caught until four. That gap is the most consequential difference between construction and every other trade in Florida, and it counts part-time helpers, not just full-time payroll.

What liability insurance does DBPR require to hold a Florida license? Rule 61G4-15.003 sets $300,000 public liability and $50,000 property damage for general and building contractors, and $100,000 and $25,000 for residential, roofing, plumbing, mechanical, pool and other specialty categories. Section 489.115 requires an affidavit attesting to that cover plus workers’ compensation under chapter 440.

Does Florida require a contractor bond? Only conditionally. Rule 61G4-15.0021 requires a $100,000 bond or irrevocable letter of credit “payable to the Board for fines and costs” where a business organization has a Financially Responsible Officer. It backs penalties, not your customer’s work. Otherwise Florida tests financial responsibility through a credit report rather than a blanket licence bond.

What credit score do you need for a Florida contractor licence? Rule 61G4-15.006 requires proof of a credit score, FICO derived, of 660 or higher, on a consumer credit report showing no unsatisfied judgments or liens against you or the entity you are qualifying. Applicants who cannot show 660 satisfy the financial stability requirement by completing a board-approved 14-hour financial responsibility course instead.

Is home warranty coverage compulsory for Florida builders? A one-year statutory warranty is compulsory under section 553.837, which took effect July 1, 2025, covering defects that materially violate the Florida Building Code, including work by subcontractors and suppliers. It runs from conveyance or first occupancy, survives a sale, and is enforced only by a private civil action from the purchaser.

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This article is general information, not legal or tax advice. Rules change — confirm with the authority named above.