You passed your workers’ comp audit. Everything looks settled.
Then the bill arrives — and it’s far higher than expected.
This isn’t your mistake. It’s a growing premium trap hitting Florida contractors right now.
Across the state, carriers are adding workers’ comp premium for subcontractor company officers who are legally exempt under Florida law.
That means you can hire a subcontractor who is fully compliant — and still be charged as if they were uninsured.
These surprise charges drain cash, disrupt projects, and punish contractors who did everything right.
So why is this happening — and how do you stop it?
Why Legitimate Exemptions Are Being Ignored
You did your part.
You collected exemption certificates.
You issued 1099s.
You verified your subcontractors are legally exempt.
And yet, the carrier still includes them in your premium.
Why?
Many carriers now apply internal rules that go beyond Florida law and NCCI guidelines. Instead of following state standards, they rely on rigid documentation requirements and internal thresholds that shift all risk onto you at audit.
If even one document is missing or interpreted incorrectly, the entire subcontractor payment can be pulled into your payroll calculation.
That means you can be compliant — and still be charged.
This turns audits into financial landmines, where paperwork gaps become profit leaks.
What This Means for Your Business
When carriers override clear legal exemptions:
- Your workers’ comp costs spike unexpectedly
- Your cash flow takes a hit
- Your audit becomes a revenue risk instead of a compliance step
And worst of all — you’re paying for labor you never employed.
If you’re tired of audits turning into profit leaks, it’s time to protect your business the right way.
👉 Talk to an ACI specialist before your next audit
Your Audit Survival Checklist: Proving Exemption Status
Knowing the law is not enough. You must prove exemption — and the proof must be airtight before audit day.
For every exempt subcontractor officer, your file must include:
- Their company EIN (not just a Social Security number)
- An active Florida Certificate of Exemption
- Invoices and payment records
- Your issued 1099 forms
- Payroll or job cost documentation
- Evidence they meet Florida’s independent contractor control test
If your file is incomplete, carriers may ignore the exemption — even when it is legally valid.
👉 Want help building audit-proof files?
Let ACI review your structure before the carrier does.
Why Documentation Alone Is Not Enough
Even perfect paperwork won’t protect you if your carrier chooses to reinterpret the rules.
Some insurers build internal policies that override Florida statutes and NCCI guidance. When that happens, your audit becomes a profit center for them — not a compliance process.
The real solution is not just better documentation.
It’s working with a partner who selects carriers that follow the rules — and challenges unfair audits when they don’t.
How Affordable Contractors Insurance Protects You
At Affordable Contractors Insurance, we specialize in contractors — not general business insurance.
We know:
- Which carriers follow Florida law
- Which audit practices cause surprise premiums
- How to structure your policy to reduce audit exposure
- How to defend your exemptions before the carrier challenges them
Your broker is your last line of defense.
Make sure they are fighting for you — not the carrier.
Stop the Premium Trap Before It Hits You
Don’t wait for your next audit to discover you’re at risk.
👉 Get a free workers’ comp audit risk review
👉 Protect your exemptions before they’re challenged
👉 Lower your exposure and control your premiums
Your hard work deserves protection — not penalties.