POTENTIAL GAP IN WORKERS COMPENSATION IMMUNITY STATUTORY FRAMEWORK

Posted on April 26, 2026April 26, 2026 by David Adelstein

Workers compensation insurance is important. As an owner, you want to ensure the contractors you hire have workers compensation insurance. Assuming you hire a contractor that is statutorily exempt from workers compensation, you want to make sure, no exception, that any subcontractor that is hired has workers compensation insurance. (Regardless, you always want subcontractors to have workers compensation insurance.). In construction, the prime contractor serves as the “statutory employer” for purposes of workers compensation insurance.

With workers compensation comes workers compensation immunity.

A recent case discusses workers compensation immunity:

Under section 440.10, … every employer is legally obligated to secure the payment of medical and disability benefits for any employee who is injured at work. § 440.10(1)(a). In exchange, the employer’s liability for those benefits is made “exclusive and in place of all other liability . . . of such employer . . . to the employee.” § 440.11(1). As a result, “employers who provide workers’ compensation benefits . . . are immune from tort liability.”

“The obligation to secure payment of workers’ compensation benefits and [the] concomitant immunity from tort liability extends not only to direct employers but also to certain ‘statutory employers.’ ” Section 440.10(1)(b), Florida Statutes (2023), provides as follows:

In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

By this statutory language, “to be immune from tort liability as a contractor, a defendant’s ‘primary obligation in performing a job or providing a service must arise out of a contract.’ ” Additionally, the contractor must show that it “then ‘delegated or sublet to a subcontractor’ ” a part of that contractual obligation.

Willis A. Smith Construction, Inc. v. Keathley, 51 Fla.L.Weekly D858b (Fla. 2d DCA 2026) (internal citations omitted).

In Keathley, a contractor was hired to perform renovation work to a structure (house) on University of South Florida’s campus. The contractor solicited a bid from a subcontractor regarding the installation of hurricane screens. The subcontractor’s owner went to the job site to prepare the bid. During this visit, he fell from a balcony and died. His estate sued the contractor and the contractor argued that it was immune under workers compensation immunity. The trial court disagreed with the immunity. And so did the appellate court.

Why did the contractor not get the benefit of workers compensation immunity?

Because the court found there wasn’t a contract between the contractor and the subcontractor. The death occurred while the subcontractor’s owner was preparing the bid. See Keathley, supra. (“But “[f]or there to be an enforceable contract, ‘there must be an offer, an acceptance, consideration, and sufficient specification of terms so that the obligations involved can be ascertained.’”) (citation omitted). Thus, there was nothing sublet to the subcontractor at the time of the death demonstrating the contractor actually delegated a portion of its scope of work to the subcontractor at the time of death, i.e., at the time the subcontractor visited the site to prepare or determine whether it would bid. “Because the undisputed facts of this case do not support a conclusion that [the contractor] passed on to [the subcontractor] a portion of its contractual obligation to prepare a price proposal for USF’s Williams House project, the trial court did not err in granting partial summary judgment in favor of [the plaintiff].” See Keathley, supra.

In this context, is it fair or unfair that the contractor did not get the benefit of workers compensation immunity? Does this create a gap within the workers compensation immunity framework?

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

QUICK NOTE: PROCURE WORKER’S COMPENSATION IN THE NAME OF YOUR COMPANY IF YOU ARE A GENERAL CONTRACTOR

Posted on June 15, 2025June 15, 2025 by David Adelstein

If you are a general contractor (or the contractor responsible for hiring subcontractors), please make sure to procure a worker’s compensation and employer’s liability insurance policy. Also, don’t think you are “fully covered” if you have worker’s compensation through a professional employer’s organization, otherwise known as a PEO. If you go with a PEO, or are statutorily exempt from worker’s compensation, then you need to make sure ALL of the subcontractors you hire have worker’s compensation and employer’s liability insurance. No exception. Ever. The risk is much greater than any reward.

In construction under Florida law, the general contractor is deemed the “statutory employer” for purposes of worker’s compensation. This means that if a subcontractor does not have worker’s compensation, then the general contractor’s worker’s compensation policy is required to cover injuries. So, if a person under a subcontractor gets hurt, and the subcontractor does not have worker’s compensation insurance, then the general contractor is deemed the statutory employer for purposes of worker’s compensation.

What if the general contractor has worker’s compensation through a PEO? This does not matter as the general contractor is still deemed the statutory employer. But, unlike traditional worker’s compensation insurance, the general contractor won’t have insurance to cover the risk. The reason being is that with a PEO, your employees get leased back to you so the leasing company is the company with worker’s compensation insurance, not the contractor. If a non-employee gets hurt, or someone not enrolled through the leasing company, there is NO worker’s compensation insurance for that hurt person. This means the general contractor, or the statutory employer, has liability for the injury risk but does not have insurance to cover the risk. To avoid this dynamic, consider two crucial things:

First, procure a worker’s compensation and employer’s liability policy. Not through a PEO, but in your company’s name.

Second, if you feel like the PEO is the most prudent option regardless of the risk, or don’t have employees and are otherwise statutorily exempt, then you need to make sure everyone you hire has worker’s compensation and employer’s liability insurance. Don’t make exceptions.

HIRING SUBCONTRACTORS WITH WORKERS COMPENSATION INSURANCE

Posted on December 30, 2017December 30, 2017 by Edward Garber

You want to hear more on the POWER of statutory workers compensation immunity? Well, here it is, because as I have mentioned in the past, workers compensation immunity is powerful reinforcing the importance for contractors to ensure the subcontractors they hire absolutely have workers compensation insurance. Likewise, subcontractors want to ensure the subcontractors they hire also have workers compensation insurance.

In the case of Fisk Construction, Inc., v. Obando, 42 Fla. L. Weekly D2501b (Fla. 3d DCA 2017), a general contractor hired a roofer. The roofer subcontracted a portion of its work to a sub-subcontractor. A foreman of the sub-subcontractor than orally hired a laborer to perform a portion of the work the sub-subcontractor was responsible for performing. The laborer got hurt and a lawsuit was filed. The trial court ruled that the sub-subcontractor could not rely on workers compensation immunity as an affirmative defense finding that the sub-subcontractor waived and/or was estopped from asserting this defense. There appeared to be an initial denial of workers compensation benefits that was later remedied by the sub-subcontractor’s workers compensation insurer agreeing to pay the laborer’s hospital bills and medical visits. (Since the laborer was hired in an oral, handshake-type of deal, it could have been that executives of the sub-subcontractor had to investigate the laborer’s involvement at the project since he was not an employee of the company.)

On appeal, the Third District reversed holding that the sub-subcontractor could rely on workers compensation immunity as an affirmative defense. “[A]n initial denial of liability or [workers compensation] benefits does not automatically estop an employer from asserting workers’ compensation immunity [as an affirmative defense].” Fisk Construction, supra.