5 Common Insurance Mistakes Florida General Contractors Make (And How to Avoid Them)

Are You Making These Costly Insurance Mistakes?

If you’re a general contractor in Florida, you already know that having insurance is essential—but did you know that many contractors are underinsured, overpaying, or missing key coverage?

A single insurance mistake could cost you thousands in claims, fines, or legal fees. The worst part? Most of these mistakes are completely avoidable.

In this guide, we’ll cover:

✔ The top five insurance mistakes Florida contractors make

✔ How these mistakes can cost your business

✔ How to fix them and get the right coverage

Let’s make sure your business is fully protected and compliant.

Mistake #1: Buying the Cheapest Policy Without Checking Coverage

Many contractors look for the lowest premium, thinking they’re saving money. But cheaper isn’t always better—especially if your policy doesn’t cover key risks.

❌ Why It’s a Mistake:

✔ Low-cost policies often have high deductibles or coverage gaps.

✔ Some exclude hurricane, flood, or theft coverage, which are major risks in Florida.

✔ You might not have enough liability coverage to handle a large lawsuit.

✅ How to Avoid It:

✔ Compare coverage limits, exclusions, and deductibles—not just price.

✔ Make sure your policy includes hurricane and flood protection.

✔ Work with an independent insurance agency that can compare multiple providers.

📌 Key Takeaway: A cheap policy now could mean huge out-of-pocket costs later.

Mistake #2: Not Carrying Enough General Liability Insurance

General liability insurance is required for licensed contractors in Florida, but many contractors carry the minimum limits—which may not be enough.

❌ Why It’s a Mistake:

✔ If a client, vendor, or third party gets injured on-site, a lawsuit could exceed your coverage limits.

✔ Property damage claims can quickly exceed low-limit policies.

✅ How to Avoid It:

✔ Consider higher coverage limits (e.g., $1 million per occurrence instead of $300,000).

✔ If you handle high-risk projects, ask about an umbrella liability policy for extra protection.

📌 Example: If a scaffold collapse injures multiple people, a $500,000 policy won’t be enough—and you’ll be responsible for any additional costs.

Mistake #3: Assuming Homeowners or Clients Will Cover Certain Risks

Some contractors wrongly believe that a client’s homeowners insurance or project owner’s policy will cover all damages.

❌ Why It’s a Mistake:

✔ Homeowners insurance doesn’t cover work-related accidents or contractor mistakes.

✔ Developers and property owners often exclude contractors from their policies.

✔ If damage occurs due to your work, you could be fully liable.

✅ How to Avoid It:

✔ Always carry your own general liability and builder’s risk insurance.

✔ Ask clients for a copy of their insurance policy and confirm your role in coverage.

✔ Require subcontractors to carry their own insurance.

📌 Example: If a subcontractor damages plumbing during a remodel, the homeowner’s insurance won’t cover it—you will.

Mistake #4: Ignoring Workers’ Compensation Insurance Requirements

Florida requires workers’ compensation insurance if you have one or more employees—yet many contractors skip it or try to misclassify workers as independent contractors.

❌ Why It’s a Mistake:

✔ Florida fines businesses heavily for not carrying workers’ comp.

✔ If an employee gets hurt and you don’t have coverage, you’ll be responsible for medical bills and lost wages.

✔ Misclassifying employees as independent contractors can lead to lawsuits and audits.

✅ How to Avoid It:

✔ If you have one or more employees, get workers’ comp insurance—it’s the law.

✔ If you hire subcontractors, require them to show proof of insurance.

✔ Work with an insurance agent to ensure you meet Florida’s compliance rules.

📌 Key Takeaway: Skipping workers’ comp can lead to fines, lawsuits, and massive financial liability.

Mistake #5: Not Reviewing Insurance Policies Annually

Florida’s construction industry changes fast—but many contractors fail to update their insurance coverage as their business grows.

❌ Why It’s a Mistake:

✔ If your business expands, you may need higher coverage limits.

✔ New projects, vehicles, or equipment may not be covered under an old policy.

✔ Insurance rates change yearly, and better deals may be available.

✅ How to Avoid It:

✔ Review your coverage limits, deductibles, and exclusions every year.

✔ If you add employees, vehicles, or larger projects, update your policy.

✔ Compare quotes from multiple providers to ensure you’re getting the best rate.

📌 Pro Tip: Working with an independent agency like Boyd Insurance & Investments ensures you get the best coverage for your evolving business needs.

How to Avoid Insurance Mistakes & Protect Your Business

Want to avoid these costly mistakes? Follow these steps:

✅ 1. Work with an Experienced Insurance Agent

✔ Independent agencies compare multiple providers to find the best policy.

✔ They help ensure you meet Florida’s contractor insurance requirements.

✅ 2. Get the Right Coverage for Your Business Size

✔ Small contractors may need basic liability + workers’ comp.

✔ Larger contractors should consider umbrella policies, builder’s risk, and professional liability.

✅ 3. Review & Update Your Policy Annually

✔ If you expand, hire employees, or take on bigger projects, increase your coverage.

✔ Compare new quotes to find better rates or discounts.

📌 Key Takeaway: The right insurance protects your business from lawsuits, accidents, and financial losses—but you need the right coverage, not just the cheapest policy.

FAQs About General Contractor Insurance in Florida

✅ What’s the biggest mistake Florida contractors make with insurance?

Many buy the cheapest policy without checking if it covers hurricane damage, theft, or subcontractor mistakes.

✅ How can I lower my contractor insurance costs?

✔ Bundle multiple policies.

✔ Increase deductibles.

✔ Maintain a clean claims history.

✔ Work with an independent agency to compare rates.

✅ Is workers’ compensation required for Florida contractors?

Yes—if you have one or more employees, Florida requires workers’ comp.

✅ How often should I update my policy?

Annually! If your business grows, adds employees, or takes on bigger projects, you may need higher coverage limits.

Final Thoughts: Protect Your Business the Right Way

If you’re a general contractor in Florida, avoiding these common insurance mistakes can save you thousands of dollars while keeping your business fully protected.

✔ Choose the right coverage—not just the cheapest policy.

✔ Ensure subcontractors carry their own insurance.

✔ Review your policy annually to stay up to date.

For expert advice and customized general contractor insurance in Florida, Boyd Insurance & Investments can help you find the best policy at the best price.

📞 Get a Free Quote Today & Protect Your Business the Right Way!