Which type of insurance is mandatory for Florida contractors with employees?
Correct Answer
C) Workers' compensation insurance
Florida law requires employers to carry workers' compensation insurance if they have employees. This insurance covers medical expenses and lost wages for work-related injuries and illnesses.
Why This Is the Correct Answer
Workers' compensation insurance is mandated by Florida Statute Chapter 440 for all employers with employees, including contractors. This insurance provides medical coverage and wage replacement benefits for employees who suffer work-related injuries or illnesses. The requirement applies regardless of the number of employees, making it the only insurance type among the options that is legally mandatory for contractors with employees. Failure to carry workers' compensation insurance can result in significant penalties and legal consequences.
Why the Other Options Are Wrong
Option A: Commercial auto insurance
Professional liability insurance (errors and omissions) is optional coverage that protects against claims of professional negligence, but it is not required by Florida law.
Option D: Professional liability insurance
Commercial auto insurance is only required if the contractor owns and operates commercial vehicles, and even then, it's not specifically mandated just for having employees.
Memory Technique
Think 'Workers get hurt = Workers' comp required' - it's the only insurance that directly protects employees, so it's the one the state mandates.
Reference Hint
Florida Statutes Chapter 440 - Workers' Compensation Law, or the Business and Finance section of your contractor exam prep book
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