GL audits catch Florida contractors off guard every year. Roofers are hit hardest. Here's why it happens and exactly what you can do about it.
The GL Audit Most Contractors Don't See Coming
Every general liability policy for Florida contractors is issued on an estimated exposure — usually estimated annual gross receipts. At policy expiration, the insurer audits your actual numbers. If your real revenues exceeded the estimate, you owe additional premium. That part most contractors understand. What catches them off guard is everything else the auditor adds to the bill.
Unlike workers' comp audits — which focus on payroll — GL audits focus on gross receipts and subcontractor management. The auditor isn't just verifying your revenue; they're verifying that every subcontractor who contributed to that revenue carried their own GL coverage. If they didn't, their receipts get added to your exposure base and rated at your rate.
The #1 Cause: Subcontractors Without Certificates of Insurance
When you hire a subcontractor who cannot produce a certificate of insurance showing their own general liability coverage, your carrier may include their receipts in your exposure base and charge you for covering their work at your rate. For roofers — who use subs heavily and carry some of the highest GL rates in the state — this is the single most common source of surprise audit bills.
A sub paid $150,000 with no COI can generate $2,700 or more in additional GL premium at a typical roofing rate. Multiply that across two or three subs and you're looking at a five-figure bill. The fix is simple in theory: collect COIs before subs start work.
Class Code Misclassification: The Roofer's Biggest GL Risk
For roofing contractors, the difference between GL class code 91340 (new roofing and re-roofing) and 91342 (repair only) can mean a rate difference of 30–50%. If your policy was written under the repair code but the auditor reclassifies your work as new construction, the additional premium on a $2M receipts policy can exceed $10,000.
Document the nature of every job — repair vs. replacement — throughout the year so you can support your classification at audit time. Contracts, invoices, and photos all serve as documentation.
How to Dispute a GL Audit Overcharge
You have 30–60 days from receiving the audit bill to formally dispute the findings (the exact window is in your policy). The most effective disputes include: certificates of insurance from all subcontractors (even if collected late), payroll and receipts records broken down by work type, and a written explanation of each disputed line item.
Disputes without documentation are rarely successful. Disputes with clean documentation typically resolve in the policyholder's favor within 30 days.
The Audit Monkey: $99/Month COI Management for Florida Contractors
If managing subcontractor certificates manually sounds like more work than it's worth, consider outsourcing it. The Audit Monkey offers a $99/month subcontractor COI management service that verifies every sub's insurance before they start work and re-verifies every certificate monthly. They also specialize in GL and workers' comp audit disputes for Florida contractors.
Frequently Asked Questions
Can I dispute a GL audit after I've already paid?+−
In most cases, no — once an audit bill is paid, the carrier considers the matter closed. This is why it's critical to dispute before paying. Contact your agent immediately if you receive an incorrect audit bill.
What if my subcontractor's COI expired during the policy year?+−
If a sub's certificate expired mid-year, the carrier may include only the period when the sub was uninsured in the audit calculation — not the full year. Document the dates the sub worked and the dates their coverage was active.
How is a GL audit different from a workers' comp audit?+−
Workers' comp audits focus on payroll and employee classification. GL audits focus on gross receipts and subcontractor insurance. Both can generate unexpected bills, and both can be disputed.