New Contractors – FL

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What do you need to get licensed?  If you are a new or recently licensed contractor in Florida , or are relatively new to purchasing insurance for your company this will provide a bit more information about what you need, and why:  In short, The State of Florida requires you to have at least a General Liability policy in the amounts of $300,000 for bodily injury and $50,000 for property damage for both General and Building Contractors and $100,000 for bodily injury and $25,000 for property damage for all other categories.  The first thing that you will discover in your search is that it is relatively hard to find quotes for these exact dollar amounts.  Most carriers will quote a minimum limit $500,000 per occurrence and $1,000,000 general aggregate. The good news here is that these limits exceed the states requirements and the premium charged is usually almost the same even for the higher limits.  In today’s litigious environment extra protection is never a bad thing.  If you are mostly having issues with the state, check out our page here for some extra help.  If you need exam help, try here. The state has come out with a new License Bond requirement for contractors with a sub 660 credit score, effective July 2012.  Read here to determine if you need one.  We have a License Bond estimated rate table here.  Go here if you want a quote for one.  Go here to learn LEGAL tips on improving your credit score fast.

What insurance question should you always ask? A critical fact to uncover is whether the policy you purchase has coverage for Completed Operations on the JOB SITE!  Many reputable insurance companies will happily sell a contractor insurance that only covers your operation while you are on at the job site.  However once you reach substantial completion or demobilize, the coverage ceases.  This is a VERY common exclusion.  This can also be a very bad thing if something goes wrong with the work, and the owner, GC, or anyone else attempt to file a claim against you.  This coverage may increase the annual premium by $100 for a small handyman to a bit more for a large commercial contractor.  The important thing is that typically most claims occur AFTER the job is complete.  Why save $100 when “Completed Operations” is exactly what you hope you have coverage for?  Also be sure to look for these other exclusions.  Depending on the type of work you perform, they can either be a non-issue or a critical deal-breaker.  Also beware of anything under $600!  Too good to be true means…

If you ever perform any…   If you will be performing mostly commercial work, you will frequently be asked to list the GC or Owner as an Additional Insured on your insurance.  Please keep in mind that Additional Insured is not the same as a Certificate of Insurance.  If you need many Additional Insured’s to be added to your policy, this may increase your premium depending on the number of times a year this will be needed.  If you need more than 10 a year, a Blanket Additional Insured endorsement can usually be obtained.  Think of this as an “all you can eat” endorsement.  These are some other critical coverage items that commercial contractors may be asked to provide.

What about Work Comp?  The second coverage you may be interested in acquiring is Workers Compensation.  If you are a contractor in Florida, you are required to have Workers Compensation unless you are incorporated, then you have the option of exempting yourself.  This has many pros and cons, however at the end of the day, you have options. If you are a GC or hire lots of subs, this page will address some very specific issues you will have.  We write dozens of “A” rated Work Comp carriers and offer “pay-as-you-go” options too. Regardless of what your “buddy” said, Employee Leasing or a PEO are not your only choices! For a Work Comp “Quick Quote” go to this page.  Want to know how the premium is calculated? Go to this pageGo here to learn how to keep from being a victim of Work Comp fraud.  You will also be asked to develop a safety program by your Work Comp carrier.  Don’t panic and DO NOT pay a few hundred dollars to buy one (yet).  Go here and see if you can use one of these templates first.  You will be glad you did especially if OSHA ever comes by!  Speaking of OSHA, you can learn the basics about inspections and 300 logs on this page.

Other stuff you may need:  Hillsborough County, The City of Jacksonville, and many other places require you to purchase a “Code, County, Right-of-Way, or Municipal Compliance Bond“.  The good news here is that provided you haven’t had any bond claims (rare), these are well under $100 a year.  Should you see your city or county name here, you will probably need one.  If your credit score is below 660, The State of Florida (and the CILB) will ask you to post a License Bond.  You can read more about this requirement here on the State’s web page and see if you qualify. We do have access to bond markets that write these, however keep in mind that the worse your credit is, the more expensive the bond will be!

Anything else?  You should decide if you need a Business Auto Policy instead of a just using your Personal Auto Policy.  There are many other coverages such as PollutionInland Marine (for your tools – not boats) and others that may or may not be a good idea for your particular business.    If you would like to learn more, please click on “Construction Insurance Basics” for a short document that will help you determine if you should investigate further.  We will also be adding more to our Contractual Liability section so you can develop a good subcontractor agreement should you need one.

Lastly, if you are performing any work such as demolition, highway construction, or using explosives, you will need to speak with an agent personally.  Depending on the scope, project owner, and/or contractors involved such as SKANSKA you may have special requirements.

Beware of Audits:
The insurance company wants you to be honest about your payroll and revenue forecast.  They may perform an Audit at the end of the policy (usually) to make sure that you did not grossly underestimate your payroll or revenues. If you have only one employee – YOU – then this is less of an issue.   The good news here is that if you overestimated, they may give you money back!  Learn more here.

If you would like us to perform a more through analysis of your operation you can either fill out an application or drop us a line at Construction Pros and will be happy to help.