In Florida construction, workers' comp is required at the very first employee — and owner-officers count as employees unless they formally exempt out. The construction exemption is how a qualifying owner opts off their own policy, but the rules are narrow: at least 10% ownership, no more than three officers per company, a $50 e-filed certificate every two years — and sole proprietors and partners can't exempt out of construction at all.
Workers' Comp · Florida · Regulated by FL OIR · Workers' Comp in Florida
A Florida construction workers' comp exemption is a Notice of Election to be Exempt that a qualifying corporate officer or LLC member files with the Division of Workers' Compensation to opt out of being a covered employee on the company's policy. To qualify in construction, the officer or member must own at least 10% of an active Florida corporation or LLC, no more than three officers per corporation (or affiliated group) may exempt, and each certificate costs $50, is e-filed, and lasts two years. Sole proprietors, partners, and regular non-owner employees cannot exempt out in construction — and an exempt owner who's injured collects no workers' comp benefits.
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Florida is the toughest construction state in the country on workers' comp. Most non-construction employers don't need coverage until they reach four or more employees. A construction employer needs it at one — the strictest threshold in the country. The rule lives in Florida Statutes Chapter 440, in the "employment" definition at §440.02. (The subsection numbers in §440.02 have been renumbered over the years, so confirm against the current statute rather than memorizing a number.)
Here's the twist that makes the exemption necessary. Under §440.02, corporate officers and LLC members who own at least 10% are themselves counted as "employees" for comp purposes — unless they file an exemption. So a one-person construction corporation isn't below the line; it's already sitting on the one-employee trigger and owes coverage until the owner-officer formally exempts out. The construction exemption (a Notice of Election to be Exempt under §440.05) is the mechanism that lets a qualifying owner remove themselves from the policy so a true owner-only business doesn't have to carry comp.
The construction exemption is narrowly drawn. To qualify, every one of these must be true:
That 10%/three-officer structure is the heart of the rule. It's designed so a small, genuinely owner-run construction business can take its owners off the policy, while blocking the abuse of relabeling ordinary workers as "officers" to leave a crew uninsured. A regular, non-owner employee can never be exempted — only qualifying owners can.
The construction exemption is filed online with the Division of Workers' Compensation, and the mechanics are specific:
Compare that to the non-construction exemption, which is free and remains in effect until revoked. Construction is treated more strictly across the board: a fee, a fixed term, and electronic filing, all reflecting Florida's heightened scrutiny of construction coverage.
This is the trap that catches solo operators. In the construction industry, a sole proprietor or a partner cannot file an exemption to exclude themselves. The Notice of Election to be Exempt is available only to corporate officers and LLC members who meet the 10% ownership test — not to sole proprietors or general partners.
The practical consequence: a sole proprietor doing construction in Florida who wants to operate without buying a payroll-rated policy for themselves generally has two real choices —
It's a structural rule a lot of new construction businesses don't see coming: the legal form of the business decides whether the owner can exempt at all. If you're a sole proprietor in Florida construction, you can't simply file your way out — you either restructure or you carry coverage.
The single most important thing to understand about the construction exemption: it is not insurance and it covers no one. An exempt owner-officer is, by their own election, not a covered person on the policy. Under §440.05(13), an exempt officer cannot recover Chapter 440 workers' compensation benefits if they're injured on the job — no medical, no lost-wage benefits, nothing.
Exempting saves premium because it removes the owner's payroll from the rating base. But the price is that the owner has traded away their own coverage. A working owner who's regularly on dangerous jobsites should weigh whether the premium for a policy that actually covers an included owner is worth more than the savings from exempting out. Many do choose coverage for exactly this reason.
And the exemption protects no employees either. If the business has — or hires — any actual worker, that worker is not covered by the owner's exemption; the business owes a full, payroll-rated policy. Florida's one-employee construction rule (above) means that obligation lands at the very first hire.
Florida solo contractors juggle three tools, and they're not interchangeable:
So an exemption is the least-expensive path for a true owner-only construction business that can qualify — but it stops being enough the instant a GC demands a waiver of subrogation (then you need a ghost policy) or the business puts a real worker on the job (then you need full coverage).
Acolite is a licensed brokerage, not an insurer. We place Florida construction workers' comp — full payroll-rated policies and minimum-premium options — with admitted carriers, subject to underwriting, help file construction officer exemptions correctly, and tell you whether an exemption alone will satisfy your GC or whether your contract forces a policy. This page is informational only and isn't legal advice; verify exemption eligibility with the Florida Division of Workers' Compensation.
These are the gaps that competitors gloss over and that cause denied claims or rejected certificates.
The construction exemption is open only to corporate officers and LLC members with ≥10% ownership — not to sole proprietors or partners. A solo construction proprietor who wants to avoid a policy generally has to incorporate/form an LLC to qualify, or buy coverage instead.
You must own at least 10% of an active Florida corporation or LLC to exempt, and no more than three officers per company (or affiliated group) can elect. You can't relabel a crew as "officers" to leave them uninsured — only qualifying owners can exempt, never regular employees.
A construction exemption lasts two years (§440.05(6)) and doesn't auto-renew. Let it lapse and the owner is counted as a covered employee again — and GCs re-check the expiration date against the Division's Proof of Coverage database every cycle, so a lapse can lock you off the site.
Under §440.05(13), an exempt officer can't recover Chapter 440 benefits for a jobsite injury — no medical, no lost wages. If you do dangerous work yourself, weigh a policy that covers an included owner against the premium you'd save by exempting.
Florida's construction threshold is a single employee. Your first hire — W-2, 1099, or cash day labor — means the business owes a full, payroll-rated policy; the owner's exemption covers that worker not at all.
If a GC contract requires a waiver of subrogation or additional insured, an exemption certificate won't satisfy it — those endorsements only attach to an actual policy. That's typically what pushes a solo contractor into a minimum-premium ghost policy on top of, or instead of, the exemption.
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| Factor | Impact | Detail |
|---|---|---|
| Exemption vs. carrying a policy | Major | A construction exemption costs $50 every two years and removes the owner's payroll from the rating base — far cheaper than a policy. But it carries no coverage and no endorsements; the savings vanish the moment a GC requires a waiver or the business hires a worker. |
| Governing class code | Major | If you do buy a policy, the construction trade class code sets the manual rate. Higher-hazard trades (roofing, framing, exterior) carry far higher rates than interior or clerical work, affecting both a minimum-premium and a full policy. |
| Number of officers exempted | Moderate | Up to three qualifying officers/members (≥10% ownership) can exempt per company or affiliated group. Each exemption removes that owner's payroll from rating — which is what lets a small owner-run shop reach a near-zero or minimum premium. |
| Owner injury coverage added back | Moderate | Choosing to include an otherwise-exempt owner adds a rated payroll figure and raises premium above the minimum — the trade-off for the owner actually having medical and wage coverage if hurt on the job. |
| Statutory-employer exposure from uninsured subs | Major | Under §440.10, hiring a sub who can't show their own coverage or a valid exemption makes you their statutory employer — their injured worker's claim flows up to you, and an exemption won't respond. Verifying sub coverage protects against an uninsured-loss hit. |
| Stop-Work Order / penalty exposure | Major | Operating without required coverage risks a Stop-Work Order and a penalty of 2× the premium that should have been paid over the prior two years (minimum $1,000), plus $1,000/day for working in violation — costs that dwarf any premium avoided by under-covering. |
It's a Notice of Election to be Exempt (§440.05) that a qualifying corporate officer or LLC member files with the Division of Workers' Compensation to opt out of being a covered employee on the company's policy. It removes the owner from the comp rolls but provides no coverage to anyone.
A corporate officer or an LLC member who owns at least 10% of an active, registered Florida corporation or LLC. No more than three officers per company (or affiliated group) can exempt. Sole proprietors, partners, and regular non-owner employees can't exempt out in construction.
No. In the construction industry, sole proprietors and partners cannot file an exemption to exclude themselves — the election is only for qualifying corporate officers and LLC members. A solo construction proprietor typically has to form a corporation/LLC to qualify, or buy a policy instead.
$50 per certificate (§440.05(8)), e-filed with the Division of Workers' Compensation, valid for two years before it must be renewed. Non-construction exemptions are free, but construction carries the $50 fee and the fixed two-year term.
Two years from its effective date (§440.05(6)), then it must be renewed — it doesn't auto-renew. GCs re-verify the expiration each cycle against the Proof of Coverage database, so letting one lapse can keep you off the site.
No more than three officers or LLC members per corporation, or per group of affiliated corporations and LLCs, may elect to be exempt — and each must own at least 10%. You can't relabel a whole crew as officers to leave them uninsured.
No. Under §440.05(13), an exempt officer can't recover Chapter 440 workers' comp benefits for a jobsite injury — no medical, no lost wages. If you want coverage for yourself, you need a policy that includes the owner, which is subject to underwriting.
An exemption is a $50, two-year state filing that takes a qualifying owner off the comp rolls — it isn't a policy. A ghost policy is an actual minimum-premium policy from a carrier. You typically need a ghost policy when a GC requires a waiver of subrogation or additional insured, which an exemption can't carry. See our Florida ghost-policy page.
Florida construction requires comp at one employee, so your first hire — W-2, 1099, or cash labor — means the business owes a full, payroll-rated policy. Your exemption covers only you as an owner and provides no coverage for that worker; operating without coverage risks a Stop-Work Order and penalties.
Acolite is a licensed brokerage, not an insurer. We help file Florida construction officer exemptions correctly, place full payroll-rated or minimum-premium workers' comp with admitted carriers (subject to underwriting), and tell you whether an exemption alone will satisfy your GC or whether your contract forces a policy.
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