The Short Answer
Yes — in most cases. Florida requires workers' compensation coverage for businesses in the construction industry with one or more employees, including subcontractors. And here's where it gets tricky: the state often treats uninsured 1099 subcontractors as your employees for workers' comp purposes.
How Florida Treats 1099 Subs
Under Florida Statute §440.02, the construction industry has the strictest rules in the state. If you hire a 1099 subcontractor who does not carry their own workers' comp policy or a valid exemption certificate, Florida considers that person your employee. That means:
- You're liable for their injuries on the job
- Your carrier charges premium on their payroll
- An audit will add their payments to your policy — often at the highest applicable class code rate
Non-construction businesses have a slightly higher threshold: workers' comp kicks in at four or more employees. But in construction, there is no safe minimum.
The Exemption Certificate Loophole
Florida allows sole proprietors and certain corporate officers to file for a Construction Industry Exemption from workers' comp. If your 1099 sub has a valid exemption on file with the Florida Division of Workers' Compensation, they are excluded from your policy.
What This Costs You
If you're caught without proper coverage for your subs, the penalties are steep:
- Stop-work orders — your job site shuts down immediately
- $1,000/day penalties for each day of non-compliance
- Audit premium surcharges — retroactive premium at 2× the normal rate
- Personal liability for any injuries that occur
A typical Florida construction workers' comp policy runs $3.50–$12.00 per $100 of payroll depending on class code. That's far cheaper than a single stop-work order.
What to Do Right Now
- Collect certificates of insurance or exemption from every 1099 sub before work begins
- Verify exemptions through the state database — don't trust paper alone
- Include sub payroll in your policy estimate to avoid audit surprises
- Talk to an independent agent who can access multiple carriers for the best rate on your specific class codes
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Sources: Florida Statute §440.02 — Workers' Compensation Law; Florida Division of Workers' Compensation — Exemption Requirements; NCCI Florida Rate Filing 2025–2026