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Do you really need business insurance in Florida? – FAQ

To answer if you need business insurance in Florida, there are two aspects to consider. First, there are some legal requirements in Florida. Second, there are important considerations to take into account for a business to grow safely.

We want to give you our support, helping you to better understand business insurance policies (also called commercial insurance). To accomplish this, we’ve tackled some frequently asked questions about business insurance that Florida small business owners often ask. In this way, you will know how to protect your business and minimize risks.

Below is our selection of questions and answers about business insurance in Florida.

What is business insurance?

Business insurance, sometimes referred to as commercial insurance, is a policy that covers businesses against risks or losses that may occur during the course of business activity.

It encompasses several types of policies that help protect assets, offer coverage for property damage, employee-related risks, and legal liability.

Business insurance policies help protect any type of business, large or small.

What is business insurance for?

The purpose of a business policy is to protect your business against unwanted events, with adequate coverage for the economic activity that you develop.

In a nutshell, business insurance is intended to help you keep your business active by reducing the effects of unforeseen situations that may inhibit its operational capacity..

How do commercial policies work?

Policies, in general, are contractual agreements between an interested party and an insurance provider.

In relation to business policies, the interested party is a commercial entity or company.

The contracts establish that the insurer will share part of the risk with the company. 

In exchange, the company that contracts the policy agrees to pay the amount of the premiums to the insurer with a certain frequency.

However, in the event that an unexpected event occurs that involves a loss covered by the contracted policy, the company must file the claim and pay the agreed deductible.

The insurer will then investigate the case to verify the extent of the damage. As a result, she will determine the amount that you must pay to the company to compensate for your loss.

Finally, the insurer will pay the loss to the company in accordance with what is stipulated in the scope of the contracted policy.

How much does business insurance cost in Florida?

The cost of business insurance in Florida varies due to several factors:

  • Type of economic activity.
  • The number of employees.
  • Type of profession or exposure to risk.
  • Type of coverage contracted.

Generally, the higher the risk, the higher the cost of the policy and the higher the price Florida business owners must pay.

For example, a company dedicated to the construction industry, susceptible to costly lawsuits for defective construction, will pay more than another company considered to be of lower risk.

Keep in mind that business policies can be tax-deductible, as long as the coverage contracted is solely for business purposes.

Do I need business insurance in Florida?

You have probably wondered if commercial insurance is a legal requirement in Florida, and the answer is yes. Indeed, in Florida, almost any business must be covered by business insurance. However, the type of policy and coverage will depend on the type of business and the value of its inventory and assets. This is true even for small business owners. Certainly, it is a way to protect yourself, protect your employees, and protect your assets. Unfortunately, you could face a lawsuit for damages to third parties, theft, or a weather event that will severely affect your finances.

In Florida, the law requires business owners to purchase two types of insurance policies:

  • For non-construction businesses, Florida law requires them to carry workers’ compensation insurance when they have 4 or more employees.
  • If your business doesn’t do construction work, you’ll need to purchase workers’ compensation insurance if you have at least one employee.
  • Also, if your business owns or leases a vehicle, Florida law requires the business owner to purchase commercial auto insurance. You will also need to buy this type of insurance if you use your personal vehicle for business purposes. This is because if you are a small business owner, you may be using your vehicle to conduct business. Otherwise, your company will be liable when you or your employees have an accident.

In addition, there are other instances that could require you to purchase business insurance in Florida. For example, the Bank to which you applied for a loan for your business or the owner of the premises you are renting. Also, it could happen that the municipality or county where your business is located has specific requirements regarding insurance.

Does my small business in Florida need other types of coverage?

In addition to the insurance indicated in the previous point, there are other highly recommended policies to protect your business.

To begin with, a highly recommended business insurance in Florida is professional liability insurance, also known as errors and omissions (E&O) insurance. This insurance protects you in the event that a client accuses your company of being responsible for making a mistake at work. It also protects you in case you miss a deadline that causes financial loss to your client. Even though you have been very careful in executing your work, you could still face these types of accusations, even if you are not responsible. In effect, E&O coverage helps you cover legal costs.

In addition, general liability insurance will protect your small business from the high costs of third-party injury claims on your business premises, customer property damage, and advertising injuries.

On the other hand, if you want coverage against flood damage, you will need separate coverage that insures your business against flooding.

How does my business benefit from business insurance in Florida?

Foremost, you will be complying with the law, specifically with workers’ compensation insurance and commercial auto insurance.

Second, it will help protect your physical assets, your employees, and your finances from the costs of those losses covered by the policy.

Finally, another benefit of having commercial insurance in Florida is that it will help enhance the reputation of your company. Indeed, customers will feel more confident and your workers will feel more secure.

Final Words

In conclusion, business insurance or commercial insurance in Florida offers you the peace of mind of knowing that your finances will be protected in the event of unforeseen situations that are covered by the policies you contract.

Therefore, it is suggested that, at a minimum, small businesses in Florida purchase general liability insurance, workers’ compensation insurance, professional liability insurance, and commercial auto insurance.

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