The Certificate Said "Covered." The Carrier Said "Who?"
Florida's construction industry runs heavily on Professional Employer Organizations (PEOs) — leasing arrangements where the PEO becomes the statutory employer and provides workers' compensation for enrolled workers. The arrangement is legal. The trap is the word enrolled: the PEO's policy covers only workers formally accepted onto its roster before the injury. The new hire brought on that morning, the cash-paid helper, the crew member whose paperwork "was being processed" — none of them are covered, even though the subcontractor holds a certificate that looks comprehensive.
Ghost Policies: Coverage Designed to Cover Nothing
A related product is the so-called ghost policy — a minimum-premium workers' comp policy issued on the representation that the business has no employees. Sold honestly to a true sole proprietor who just needs a certificate, it is lawful. Sold — as it routinely is — to a contractor who obviously runs crews, it is a time bomb: the certificate satisfies the GC's paperwork check, and the first injury detonates it. The carrier disclaims (the policy never contemplated employees), the injured worker has no comp remedy against the sub, and liability rolls up the chain.
Who Gets Hurt, and Who Is Liable
The injured worker
Denied comp benefits, the worker can pursue the statutory employer up the chain — in Florida, a contractor is generally liable for compensation to employees of its uninsured subcontractors — and may also have negligence claims that comp immunity would otherwise have barred. An uninsured serious injury is frequently a mid-six to seven figure exposure.
The subcontractor who was sold the arrangement
Many subs paid real money for PEO services or a policy they were told made them "compliant." The agent or PEO salesperson who structured a knowingly inadequate arrangement — a ghost policy for an employer with visible crews, or a PEO setup with no process for same-day enrollment — faces negligent procurement, misrepresentation, and unfair trade practice claims.
The general contractor
The GC inherits statutory liability plus premium surcharges at its own comp audit. GCs that relied on certificates reflecting ghost or PEO coverage have their own claims against the sellers of those products, and against subs for breach of insurance covenants.
Warning Signs Before the Injury
- A comp certificate showing a minimum premium ($500–$1,000 range) for a sub that fields crews
- PEO certificates with no roster verification process — ask for the employee list, not just the certificate
- "Everyone is an independent contractor" staffing models on jobsites Florida law treats as employment
- Exemption certificates (officer exemptions) used to paper over actual employees
After the Injury: Move on Every Front at Once
Comp claims, statutory roll-up claims, and civil claims against the agents and PEOs run on different clocks and different theories. The producer file — what the sub told the agent, and what the agent sold anyway — usually decides the civil case. DFS investigates ghost policy fraud actively, and its findings feed the civil record.
If you are an injured worker denied comp benefits, or a contractor holding the bag for coverage that evaporated, start a free case evaluation.
Frequently Asked Questions
What is a ghost workers' comp policy?
A minimum-premium policy issued on the representation that the business has zero employees — it exists mainly to generate a certificate of insurance. It is lawful for a genuine one-person operation, but selling one to a business with employees, or using one to pass a GC's insurance check, is fraud with severe civil and criminal consequences in Florida.
My employer used a PEO and the PEO says I was never enrolled. Do I have any rights?
Yes. If neither the PEO nor the direct employer provides coverage, Florida's statutory employer rules generally make the contractor above your employer liable for comp benefits. You may also have tort claims that would normally be barred by comp immunity, plus the wrongdoing that kept you off the roster may itself be actionable. Get legal help quickly — benefits deadlines are short.
As a GC, how do I protect myself from PEO roster gaps?
Require the PEO's active employee roster for each sub, not just a certificate; make roster verification part of daily site check-in for new workers; and write indemnity plus insurance-verification covenants into subcontracts. After a loss, those same documents establish your reliance and your claims against the sellers of the inadequate arrangement.
Can the insurance agent who sold the ghost policy be sued?
Yes. An agent who knew or should have known the business had employees and sold a zero-payroll policy anyway faces negligent procurement and fraud claims, license discipline, and potentially criminal exposure. The agency's E&O policy is typically the realistic source of recovery for the injured worker's judgment or the contractor's roll-up losses.