Business Insurance Requirements in Florida - How Much is it?
Over the years, Florida has welcomed thousands of people fleeing the unfriendly business climate and bad weather conditions. It means that the Sunshine State is also experiencing a boom in new businesses. Due to this, business owners must consider various types of commercial insurance for legal and financial reasons. A lot of incidents can be a threat to your business including falls and customer slips, employee injuries, and natural disasters. If you employ one or more Floridian employees, you are required to get worker’s compensation. There are other types of coverages that you must consider for your everyday operations, electronic data, and business property.
It doesn’t matter if you’re a native or transplant of Florida, you should be aware of the state’s business insurance requirements and laws. In addition, make sure to know the type of policies included in your insurance which can protect your company from many risks. Below is the information you need to understand the regulations and rules of acquiring business insurance in Florida and what policies you should consider as a business owner.
The Florida Insurance Laws
For your information, there are different kinds of coverage and insurance options for company owners to understand. Some insurance plans cover general situations, while some provide a specific liability or risk. Below are the discussions of the types of insurance you must learn, and for better understanding, it’s split out into two categories:
- The insurance policy requirements for businesses to legally operate.
- The insurance policy recommendations for business operations.
Legally Required Insurance Policies
Except for workers’ compensation, the Florida state law doesn’t require business insurance. Employers must provide this insurance policy coverage to safeguard their employees when they become ill or injured while performing work.
Coverage requirements depend on your industry, a number of employees, and other factors. For example, coverage must be provided for construction businesses with one or more employees, and for non-construction businesses with four or more employees.
While you’re not legally required to carry other types of coverage in Florida, you probably should. An unexpected incident can result in a claim that’s difficult to afford without it.
Generally speaking, Florida requires most businesses to have two types of insurance policies in order to satisfy a company’s legal obligations. They are:
If you have four or more employees—whether part-time or full-time—it’s state-mandated that you carry workers’ compensation insurance. Also, if you operate within the construction industry and have more than one employee, you’re required to have coverage. This type of insurance policy is meant to protect the company and its employees from accidents and injuries that happen in the workplace during regular business operations. In addition, it annuls an employee’s ability to sue their employer on the grounds of negligence.
With workers’ comp, insurance providers compensate injured workers for:
- Lost wages
- Medical care and treatment
In addition to being exposed to liability, failure to have workers’ compensation could result in the following penalties for employers:
- Serious fines (“Two times the amount the employer would have paid in manual premium within the preceding two year period”)
- A Stop-Work Order that suspends the business’ operations until workers’ compensation insurance is implemented
- Criminal charges and potential jail time
Commercial Auto Insurance
If your business owns vehicles, the state requires that Floridians have commercial auto insurance coverage, rather than a personal auto policy.
Florida state laws mandate that a commercial auto insurance policy has $10,000 in personal injury protection and $10,000 in property damage liability protection (per accident). Also, if you do drive a personal vehicle for work purposes, it would be wise to obtain a commercial auto insurance policy since personal auto policies often exclude commercial uses. In simpler English: if you have an accident while you’re on the job, your insurance might not cover you.
Recommended Business Liability Insurance Policies In Florida
Now, just because something isn’t legally required doesn’t mean that it isn’t smart to have. Whatever industry you operate in has inherent risks—some more so, others not so much. Regardless, it’s essential that businesses in Florida have, at the very least, one of the following two policies:
General Liability Insurance
General liability insurance also called general liability business insurance, helps protect a commercial enterprise and business owner from liability claims to third parties such as:
- Bodily injury caused by the business
- Property damage caused by the business
- Medical costs from a customer hurting themselves on your equipment or in your shop
But how would these apply to real situations?
Pretend you’re a house cleaner working in a mansion. As you go about your business, you accidentally knock over an antique bust. Now, the client wants you to pay for the property damages in order to replace the priceless artifact.
Or consider an electrician who’s wired an apartment building but made a mistake. This led to an electrical fire, which injured a tenant. As a result, the tenant files a bodily injury claim, demanding compensation for their medical expenses, surgery, and rehabilitation.
If you had general liability insurance, it would help mitigate the costs that come with these unfortunate situations.
Professional Liability Insurance
Professional liability insurance, also known as an errors and omissions policy (E&O), is insurance coverage for professionals who give advice and consultation in exchange for money. It protects individuals and businesses from being stuck with the entire cost of defending a negligence claim and the resulting damages.
For example, let’s say you’re a graphic designer that just finished an incredible website mockup for a new client. Once they receive it, they claim you didn’t build it exactly as they wanted. Now they have to delay their company launch, which costs them extra money in overhead. They sue you for negligence, claiming that your mistake resulted in serious financial losses.
A Florida business liability insurance policy for professionals could help cover your legal fees and damages, even if you were, indeed, guilty.
How Much Does Florida Business Insurance Cost?
The cost of business insurance in Florida depends on a variety of factors including a business’s size, location, and coverage needs. For example, a business located on the coast near Miami will have a different rate than a business located inland near Gainesville.
The most influential factor, however, is the type of work that you do. Professions are typically rated on the exposures that are unique to their industry. Businesses that are considered high-risk typically pay more for coverage.
Small businesses in Florida need to protect their business and personal financial assets in the event of natural disasters, liabilities, litigation, or other risks. In many cases, risk exposures will be covered by standard business insurance, but in a number of other cases, they will not. Therefore, Floridian business owners may want to examine some additional business insurance coverages to see if they’re needed. Business insurance is a vital part of small business success, and to protect against the risks of doing business in Florida, prudent Floridian business owners obtain peace of mind through business insurance.
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