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Do I need business insurance in Florida?

I’m a small business owner in Florida. Do I need Florida business insurance? What does business insurance cover in Florida? What is the benefit of having Florida business insurance? 

Just about any business in Florida needs some kind of business insurance. The policies and the amount of coverage you need depend on the type of business you’re in and the value of your inventory and assets. 

But it’s a fact that no matter what kind of business you’re in, you can experience an unexpected fire, a break-in, or a weather event that damages your commercial property. And if you’re accused of harming someone else or damaging someone’s property as a result of your operations or your products, you can be expected to pay for property damage and medical expenses for the injured parties. What’s more, you’d likely be sued for additional damages. 

In general, business insurance is not required in Florida. But if your business owns any vehicles, or you drive your personal vehicle for business purposes, you are required to purchase commercial auto insurance (just like Florida drivers are required to purchase personal Florida auto insurance). And if you have employees, Florida law requires you to purchase Florida workers’ compensation insurance that protects workers who are injured on the job. 

In addition, most Florida business owners will need commercial property insurance and general liability insurance at a minimum in order to properly protect their assets. The specific coverage you need depends on your business and your risk exposures. What’s more, certain customers, vendors, suppliers, and mortgagees may require certain types of coverage in order to do business with you.

What does business insurance cover in Florida? 

Florida business insurance pays for covered claims so you don’t suffer financial losses when something goes wrong. Depending on your coverage, it can help you pay for property damage, liability claims, and even worker injuries and illnesses. 

Business insurance is not a single policy. Rather, it’s a set of individual policies that together offer comprehensive coverage for your business. A typical small business insurance package in Florida will include: 

  • Commercial property insurance covers damage to a building and its contents (computers, office equipment and furniture, supplies, fixtures, etc.) if it is damaged by a weather event, fire, theft, vandalism, and other covered perils. You need this whether you own or lease your space. 
  • Florida liability insurance protects your business assets from lawsuits. Commercial general liability insurance, or CGL, is the most basic form of business liability insurance. It can protect your business from costs related to bodily injury and property damage claims. It pays for medical expenses, legal costs, and settlements or judgments. Your CGL policy even covers costs related to personal injury claims such as libel and slander. 
  • Business interruption coverage protects your earnings if your business is unable to operate because of damage after a fire, hail, wind, equipment breakdown, or some other covered event. If you are forced to close your doors for a period of time in order to make repairs, this coverage pays for rent, employee salaries, lost income, relocation fees, and more. 
  • Workers’ compensation insurance makes it possible for workers to pay their medical bills and be compensated for lost wages if they are injured at work. Florida’s workers’ compensation law requires all non-construction employers who have four or more employees to purchase workers’ compensation insurance. 
  • Commercial auto insurance is required for all business-owned vehicles in Florida. The minimum coverage required by the state is:  
    • $10,000 property damage liability coverage
    • $10,000 personal injury protection coverage

If you drive a personal vehicle for work purposes, you should purchase hired and non-owned auto insurance because personal auto policies usually exclude business use. 

Every business is unique, and there is no one-size-fits-all commercial insurance plan. Your business needs policies and coverage that protect against its unique risk exposures. That’s why you might need several additional commercial insurance policies or endorsements to make sure all of your unique exposures are addressed. 

What are the benefits of having business insurance in Florida? 

Business insurance is beneficial for just about every business in Florida. That’s because it helps protect your financial assets and physical assets from the costs associated with covered losses involving lawsuits, property damage, theft, vandalism, loss of income, and employee injuries and illnesses.

Without business insurance, you’d have to pay out of pocket for these types of claims, and in many cases, a large claim could lead to bankruptcy. 

Some of the main benefits of having Florida business insurance are: 

  • Compliance with the law (workers’ compensation insurance, commercial auto insurance)
  • Protects your physical assets (a fire or a tornado destroys your building)
  • Protects your financial assets (you’re sued after someone gets hurt on your premises or one of your products causes an injury or illness)
  • Protects your employees (workers’ compensation pays for medical expenses for injured workers and replaces their lost income if they need time off to recover)
  • Builds credibility for your business and bolsters your reputation
  • Helps you secure business and comply with contracts (many contracts require you to have certain types of business insurance in order for you to secure or complete work)
  • Helps attract and retain employees (a good employee benefits program can make your business more attractive to potential employees)

Ultimately, business insurance offers even more than financial protection. It provides peace of mind that you’ll have the ability to pay when something goes seriously wrong. 

Article Reviewed by | Paul Martin

https://www.flhsmv.gov/insurance

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