Only 40 Percent of Fla. Roofing Contractors Have Workers’ Compensation Coverage

July 9, 2005

Rising costs of construction materials and more expensive workers’ compensation insurance are causing roofing contractors to use more uninsured workers according to Department of Financial Services Office of Insurance investigators.

State and local investigators estimate that as many as 60 percent of local roofing contractors still aren’t buying workers’ comp insurance, DFS records indicate six of the eight top violators are based in South Florida.

According to the Fort Lauderdale Sun-Sentinel, prices for a new roof have doubled since four hurricanes slammed the state last year, an increase contractors blame not only on rising costs of materials but also on expensive workers’ comp insurance.

“Once you hit Fort Pierce, the amount of uninsured contractors just gets higher the further south you travel,” said Brett Stiegel, administrator of the self-insurance fund for the Florida Roofing, Sheet Metal and Air Conditioning Contractors Association told the Sun-Sentinel.

With a new hurricane threatening, the focus is again on Florida’s construction industry, which has long had one of the worst insurance compliance records in the country, regulators said.

Since October, at least 300 roofers and contractors statewide have been issued stop-work orders, including about 60 from Palm Beach and Broward counties, according to state records. During a recent sweep in Boynton Beach, investigators hit 38 work sites and found that almost all had at least one subcontractor or worker not covered by insurance, which employers by law must provide.

In Palm Beach Gardens last month, more than half of those caught lied about having insurance, and one provided forged insurance documents, records show. One contractor told investigators his workers didn’t need insurance “because they’re illegal aliens anyway.”

In the past year, the Office of Insurance has dramatically stepped up enforcement, routinely issuing fines of $10,000 or more, with some forced to pay more than $100,000. Still, only a fraction of violators are caught, the state admits, in part because 71 investigators must cover an estimated 500,000 active job sites.

“Obviously, there is a lot going on that we can’t get to, but the word is getting out that we’re taking this very seriously and the consequences are going to be very severe,” Andrew Sabolic, chief compliance officer for the state Division of Workers’ Compensation in Tallahassee told the Sun-Sentinel.

Other business owners say they are being undercut by uninsured competitors. Workers’ comp rates, particularly for roofers and contractors, are among the highest in the country, in large part because the pool of employers buying insurance is so small.

The state’s Joint Underwriters Association charges premiums of between 50 percent and 70 percent of a roofer’s payroll, meaning someone employing five people with a $10,000 monthly payroll could have to pay as much as $7,000 for insurance.

Latest Comments

  • May 30, 2006 at 8:37 am
    Client Alliance Plan says:
    Please check out our web site http://www.cap-fl.com. We are here to help you improve your company\'s bottom line.
  • July 15, 2005 at 10:10 am
    Russell Hayes says:
    Every one makes good points, I'd like to point out one thing. The home owner! The home owner contributes to the low balling settlement practices of insurance companies. I have... read more
  • July 11, 2005 at 2:18 am
    Michael Speizman says:
    As the owner of an employee leasing company and brokerage, I have seen what people make. I can assure you that wages for roofing workers have remained the same if not lower fo... read more
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