Of all the phantom-coverage patterns in Florida, this one produces the worst outcomes, because the person who discovers it is lying in a hospital bed.
Two distinct failures that look identical from the outside
The PEO roster gap. Florida construction runs heavily on Professional Employer Organization arrangements: the subcontractor co-employs its workers through a PEO, and the PEO's workers' compensation policy covers those workers — the ones on its roster. The certificate the sub hands the GC does not say "covers 11 of the 14 men on site." It says the sub has coverage. But the worker hired that morning, paid in cash, or simply never submitted to the PEO, is not on the roster, and the carrier's position when he falls is precise and devastating: we do not insure that person.
The ghost policy. A minimum-premium comp policy issued on a representation of zero payroll — sold to a contractor who plainly has crews, to satisfy a licensing or contractual requirement rather than to insure anyone. It is a policy in form only. It detonates at audit, or at the first injury, whichever comes first.
To the general contractor holding the certificate, these look the same, and both are invisible until a loss.
Who is hurt, and who answers
- The injured worker is the acute victim. He is told the comp claim is denied because he was never enrolled or never covered, and he is left with a serious injury and no wage or medical benefits. His path forward runs through section 440.10, Florida Statutes — the statutory-employer rule, which can make the general contractor responsible for securing compensation the sub failed to secure — and, where comp immunity does not apply, potentially in tort.
- The general contractor discovers it is the statutory employer of a worker it never hired, on a project whose insurance program it thought was complete, and that its own carrier may take a position on the exposure it did not expect.
- The subcontractor — sometimes a knowing participant, but very often a victim itself. A small sub who was told by an agent that a ghost policy or a partial PEO enrollment "satisfies the requirement" bought compliance it did not receive, and now faces uninsured liability, contractual indemnity claims from the GC, and potential penalties.
The collectible defendant in nearly every version of this is the same: the agent or agency that sold the arrangement, and its errors-and-omissions coverage. An agent who represented that a zero-payroll policy would cover a working crew, or who allowed a client to believe a PEO certificate covered every worker on site, has a serious negligent-procurement and misrepresentation problem. The PEO itself, and its carrier, are also in the analysis where enrollment procedures failed or were misrepresented.
The signals, before the injury
- Workers on site whose names do not appear on the PEO roster.
- Cash payment, day-labor hiring, or "1099 subcontractors" doing the work of employees.
- A comp premium that is implausibly small for the size of the crew.
- A policy issued on a zero-payroll or owner-only basis to an entity that visibly has employees.
- A certificate that names a PEO but no mechanism for confirming who is actually enrolled.
- An agent who answers questions about roster mechanics with reassurance rather than documents.
Prevention is cheap and almost nobody does it: require a current PEO roster with every pay application, reconcile it against site sign-in logs, and verify coverage directly in Florida's workers' compensation coverage database rather than trusting a PDF.
After an injury, move on every front simultaneously
- Preserve the site record — sign-in sheets, daily reports, payroll, texts, photographs, the subcontract, and every certificate in the project file. This evidence disappears quickly, and its disappearance is not always accidental.
- Get the PEO's client service agreement and enrollment records. Whether the worker was enrolled, and why not, is the fact the entire matter turns on.
- Notice every carrier in the chain, including your own. Do not let a late-notice defense grow in the meantime.
- Identify the producer who placed the sub's comp coverage and pull its DFS license and disciplinary record.
- Get counsel involved at once. The comp claim, the section 440.10 analysis, the tort exposure, the indemnity claim, and the claim against the agent all interact, and positions taken in one forum in week one can foreclose recovery in another in year two.
Talk to Yates Anderson
Placement cases turn on documents that are easy to lose and deadlines that are easy to miss. If you are holding a denial letter, an insolvency notice, or a certificate that turned out to be worthless, request a case evaluation and a Yates Anderson attorney will respond within one business day.
Frequently asked questions
What is a 'ghost' workers' compensation policy?
A minimum-premium policy issued on a representation of zero or owner-only payroll, purchased to satisfy a licensing or contractual requirement rather than to insure anyone. It produces a genuine-looking certificate and covers no employees. It typically fails at premium audit or at the first injury claim, whichever comes first.
My employer used a PEO and the PEO says I was never enrolled. Do I have any rights?
Very likely. Under section 440.10, Florida Statutes, a contractor who sublets work is responsible for securing workers' compensation for a subcontractor's employees where the subcontractor failed to do so, which can bring the general contractor into the picture as a statutory employer. Depending on the facts, tort exposure may also exist where comp immunity does not attach, and there may be claims against the PEO and against the agent who placed the arrangement. Get advice quickly — the site records that prove you were working are the first things to disappear.
As a general contractor, how do I protect myself from PEO roster gaps?
Do not accept the certificate as proof of who is covered. Require a current PEO roster with every pay application, reconcile it against site sign-in logs, contractually require notice of any change in the PEO relationship, and verify coverage in Florida's workers' compensation coverage database. A certificate tells you a policy exists; only the roster tells you who is on it.
Can the agent who sold a ghost policy be sued?
Yes, and the agent is usually the defendant that matters. An agent who represents that a zero-payroll policy satisfies a comp requirement for a contractor with a working crew, or who lets a client believe a PEO certificate covers every worker on site, faces negligent-procurement and misrepresentation exposure — and licensed Florida agencies carry errors-and-omissions coverage that can respond to it.