By Jill Ralph. One of Florida's largest workers compensation insurers has announced it will drop coverage of approximately 4,500 small construction companies during the next two years. The Hartford Financial Services Group covers contractors through an arrangement made with the Florida Home Builders Association. Hartford spokeswoman Cynthia Michener said the insurer will not renew the policies because the rates aren't high enough to cover the rising medical and legal costs. Most employers in Florida are required to purchase workers compensation -- at the second highest rate in the nation.

"The options are extremely grim," says Edie Ousley, spokeswoman for the Florida HBA. "Without reform, our builders are going to have to put down their hammers." Last year, FCCI Group of Sarasota, the state's biggest workers compensation insurer, stopped writing new policies.

Workers aren't out of options just yet -- but the alternatives aren't cheap. The Florida Workers Compensation Joint Underwriting Association -- what some are calling the state's last resort -- charges two- to four-times the rates available from private insurers.

"The workers compensation crisis is threatening the health of the home building industry," says Ousley.