In Florida, what is the minimum workers' compensation coverage requirement for construction companies?
Correct Answer
B) No minimum limit specified
Florida workers' compensation law does not specify minimum coverage limits. However, coverage must be sufficient to pay all benefits required by law, and most contractors carry substantial coverage to protect against large claims.
Why This Is the Correct Answer
Florida workers' compensation law does not establish specific minimum dollar amounts for coverage limits. The law requires that coverage be adequate to pay all statutory benefits as they become due, but leaves the determination of appropriate coverage amounts to the insurance carrier and employer based on risk assessment. This approach allows flexibility while ensuring workers receive full benefits. The absence of a specific minimum recognizes that coverage needs vary significantly based on company size, type of work, and risk factors.
Why the Other Options Are Wrong
Option A: $100,000 per occurrence
This suggests a specific minimum limit of $100,000, but Florida law does not establish any specific dollar amount minimums for workers' compensation coverage.
Option C: $500,000 per occurrence
This suggests a specific minimum limit of $500,000, but Florida workers' compensation statutes do not mandate any particular dollar threshold for coverage amounts.
Memory Technique
Think 'Florida Flexibility' - Florida gives flexibility by requiring adequate coverage without setting rigid dollar minimums, unlike some other insurance requirements that have specific limits.
Reference Hint
Florida Statutes Chapter 440 - Workers' Compensation Law, specifically sections dealing with insurance requirements and coverage adequacy
More Business & Finance Questions
A general contractor purchases equipment worth $45,000 with a useful life of 9 years and no salvage value. Using straight-line depreciation, what is the annual depreciation expense?
What is the typical recommended coverage amount for general liability insurance for a small to medium-sized general contracting business?
A contractor estimates startup costs of $75,000 for equipment, $25,000 for initial inventory, $15,000 for insurance premiums, and $10,000 for working capital. They can finance 70% of the total. How much cash do they need?
When establishing professional relationships with architects and engineers, what is the most important factor for a general contractor to consider?
A partnership agreement for a construction company should address all of the following EXCEPT:
A contractor purchases a truck for $60,000. After 5 years, it has accumulated depreciation of $35,000. What is the truck's book value?
A contractor's business plan projects first-year revenue of $500,000 with a 15% net profit margin. If actual revenue is $450,000 with the same profit margin, what is the variance in net profit?
Using the Modified Accelerated Cost Recovery System (MACRS), construction equipment is typically depreciated over how many years?
A contractor is comparing financing options for equipment purchase. Option A: $80,000 cash purchase. Option B: $20,000 down, $65,000 financed at 6% for 4 years. What is the total cost of Option B?
A contractor purchases equipment using a capital lease with a present value of $120,000. How should this be recorded on the balance sheet?