Workers' Comp And Sub-Contractors

It is true that in non-construction, if the Sub-contractor has less than 4 employees, they are not required to carry coverage and could present you with a certificate of exemption showing that he is not required to carry it if Tallahassee approves their exemption. However, not being required by statute to have the coverage does not mean it is a good idea not to have it, nor does it mean it is a good idea for related parties not to require it. Since the basic tenet of workers' comp is the substitution of the right of an injured worker to sue for injury or sickness sustained while working by providing workers' comp coverage making the coverage itself desirable for a number of reasons.

Also, the acceptance of workers' comp benefits by an injured worker limits liability to statutorily defined benefits provided in the workers' comp act. No such limitation of liability exists in a civil court. We also know that lawyers like to sue everyone remotely connected to an event, particularly deep pockets. Just defending an uninsured workers' comp related lawsuit would no doubt be extremely costly to the dealership and this cost of defense would not likely be covered by any other insurance the dealership may have. The risk in such situations may be determined to be acceptable by the dealership but that is a business decision to be decided by the dealership.

The following discussion in the Florida United Business Association provides some helpful information. FUBA's monthly newsletter, Issues, provides association members with timely information on a wide range of small business related topics.


Since this area of the law is so complicated, the following are some common questions and answers.

1. Does Florida law only deal with contractors and subcontractors in the construction business?

Most definitely not. A contractor might be a trucker, manufacturer, materials supplier, repair service, etc.

Although not specifically defined in the law, a contractor is any entity which “sublets any part or parts of his contract work to a subcontractor.” To put it simply, a contractor is one who performs a specific job under a contract.

2. Is a contractor liable for compensation to the uninsured subcontractor for the sub’s own injuries?

No. The law specifically states that “the term ‘employee’ shall not include an independent contractor.” The contractor is not statutorily liable for injuries to an uninsured sub who is a sole proprietor or a partner. But, the contractor is liable for any injuries to the employees of an uninsured subcontractor.

3. Many contractors employ one-man subs. Is there any way the contractor can protect himself and make sure he will not be charged for injuries to the subs?

Yes – the best protection is for the contractor to make sure the one-man sub carries workers’ comp insurance, does not exempt himself, provides the contractor with a certificate of insurance, and maintains the coverage throughout the job.

4. Is the contractor liable for compensation to the partners with a subcontractor is a partnership, has no employees and is uninsured?

No. The situation is the same as in the case of a sole proprietorship. The contractor is liable only to the employees of the partnership, not the partners themselves.

5. Is the contractor liable for compensation benefits to the officers of an uninsured subcontractor?

Yes, if the officers of the sub have not filed to be exempt.

Under Florida’s workers’ compensation law, officers of a corporation are considered employees.

6. Suppose the officers of a subcontractor corporation which does carry its own workers’ comp policy elect to reject the comp coverage and file the appropriate forms with the state. Will the contractor be liable for workers’ comp benefits if they are injured on the job?

No. The law specifically states: “An officer of a corporation who elects to be exempt from the provisions of this chapter by filing a written notice of the election with the division as provided in s. 440.05 is not an employee.”

7. If a contractor, not in the construction industry, employs just one person and sublets part of his work to a subcontractor (whether or not the sub has any employees), is the contractor liable for compensation to his own single employee?

Yes. Florida Statutes section 440.10(1)(b) clearly states, “In case a contractor sublets any part…of his contract work to a subcontractor…, all of the employees of such contractor and subcontractor…engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees.”

There is no reference to number of employees.

8. What is the best advice for a contractor who wants the greatest protection against subcontractor responsibilities and minimize the possibility of the contractor being charged workers’ comp premium for subs (usually uncovered during a premium audit by the insurance company)?

Do not sublet any work to a subcontractor who does not carry his own workers’ compensation insurance or who does not have a written agreement reimbursing the contractor for workers’ compensation provided to the sub by the contractor.

We hope this clears up some of the confusion surrounding the contractor/sub issue and who is liable for workers’ compensation for any injuries on the job.

More specific questions should be directed to your Dealers Insurance Services insurance agent or your workers’ compensation carrier.