Business Insurance For Florida Small Businesses

Business insurance in Florida is undoubtedly crucial. Small business owners in Florida employ 3.6 million employees across the state, and Florida often finds itself in the top five worst states for business lawsuits. Hence, business insurance is key for business owners looking to get their risk management in order.

As a key component of the state’s infrastructure, small businesses throughout Florida make it the fourth-largest economy in the United States. (In fact, nearly half that workforce is employed by small businesses!)

The state’s business-friendly tax codes and lack of state income tax make it a great place to do business — having the right small business insurance will sweeten the deal for both you and your employees.

Knowing your legal responsibilities is the first step. This guide will cover all you need to know about business insurance in Florida.

Florida Small Business Insurance Requirements

Do you need business insurance? Unlike most states, Florida does not require businesses to have a general liability policy.

The required policies depend on how many employees you have or what type of business you operate. If you have fewer than four employees, aren’t based in construction, and don’t own any company vehicles, you may not have a legal obligation to carry insurance. Florida’s requirements for insurance policies are:

• Worker’s Compensation: According to Florida’s Department of Financial Services, you need workers’ comp if you have four or more employees for a non-construction business. The state requires construction businesses to provide workers’ compensation the moment they have at least one employee. Also, contractors are required to guarantee that sub-contractors have worker’s compensation.
• Commercial Auto Insurance: If you have company vehicles or use your personal car for business-related purposes, you will need to make sure that vehicle is covered under a commercial auto policy. An individual auto policy will not cover a car used commercially in the event of an accident or theft.
• Health Insurance: There is no state law requiring health insurance. However, you might be federally required to provide health insurance if you have over 50 full-time employees.

Florida’s Worker’s Compensation Laws

The state of Florida requires workers’ compensation insurance if you have four or more employees.

The exception is if you work in construction; businesses with a single employee in the construction field will need to have workers’ compensation. Sole proprietors are exempt. If you are found in violation of the worker’s compensation law, then you could be subject to fines and a stop-work motion.

Alright, so you know you might need it — but what exactly is workers compensation insurance?

Workers’ compensation insurance is an insurance policy that provides benefits to employees injured on the job. Workers’ compensation insurance pays medical bills and loss of income to an employee who is injured while at work or performing work-related tasks on the clock, and it also provides lawsuit protection for the employer. 

Here are a few of the things that workers’ compensation covers:

• Medical Bills: These are the accumulated medical costs related to the work injury.
• Missed Wages: If your employee has to miss work, worker’s comp can cover lost wages.
• Illness: If something at work is causing an illness, covering the medical bills for that is also part of the policy.
• Repetitive Injury: A back injury or chronic issues like carpal tunnel can relate to this category. If the injury is caused by a repetitive action at work, seeking medical care for that injury is covered.
• Disability: If the accident or injury has caused permanent disability to the employee, the policy will cover both medical bills and lost wages.

Florida Commercial Auto Insurance

If you drive your car for work or own company vehicles, you will need a commercial auto policy.

Commercial auto insurance protects business vehicles and drivers in the event of accidents, natural disasters, vandalism, and theft. If your vehicle is an essential part of your business, then ensuring and protecting the goods/services it provides is also essential.

A commercial auto insurance plan keeps the owner protected should driving mishaps occur, and it might be a needed addition since many personal auto plans do not include provisions to cover vehicles used for business. (And if they found out the vehicle was used for business, they could deny your claim! Ouch!)

Here is a list of what a commercial auto policy will cover:

• Bodily Injury: If your vehicle causes injury or death to someone, this will pay for medical bills/funeral expenses, and your legal defense.
• Property Damage: If your vehicle causes injury and destruction to someone’s property, this will pay for the costs of repair, and perhaps your legal defense.
• Personal Injury Coverage: No matter who is at fault, if you or passengers within the vehicle are injured in an accident, this coverage will pay for medical bills or lost wages.
• Uninsured Motorist Coverage: If your vehicle is involved with an uninsured motorist, this protection helps pay for your vehicle damage.
• Physical Damage Coverage: This coverage specifically covers theft or vandalism of your vehicle.

Florida Health Insurance

A 2020 survey conducted by the Kaiser Foundation determined that only around half of Florida small businesses — 56% to be exact — offered group health insurance to their employees. Here’s a breakdown of the recent health insurance laws and what they mean for your small business.

In 2010, the Federal Government passed the Affordable Care Act (ACA). Better known as “Obamacare,” the health mandate extended to employers and required businesses of a certain size to provide health insurance to its employees.

The mandate states: If your business is considered an Applicable Large Employer (ALE) with 50 or more full-time employees for more than six months out of the year, then you will need to provide your employees with health insurance as a legal requirement of the ACA.

If your business is not an ALE, then supplying health care for your employees is a choice.

Even if you only have one employee, adding a health insurance option shows a commitment to the health of the people who work for you. And if you have between 1-50 employees — granting that health insurance is optional for your type of business — the government’s Small Business Health Options Program (SHOP) group health plans are available to you during the open enrollment period.

SHOP will help you determine your eligibility, explore group health plan options, and compare and shop available plans in Florida. After that, you can sign-up directly through the insurance platforms offered in your state or work with a SHOP broker who can walk you through the process. You will need to have information on the following aspects of your business:

• Your business address
• How many employees you are insuring
• Employees’ ages
• Employees’ zip codes
• Employees’ number of dependents
• Employees’ tobacco use
• Your business name
• Your tax ID

Read our complete guide to small business health insurance to find out more.

6 Other Types Of Liability Insurance Florida Small Businesses Might Need

In a state that has not one, but two, of the top ten weirdest lawsuits against businesses, it’s time to look into some protection. (Those weird lawsuits: One man was awarded money in a lawsuit against his company when fire ants bit him while on the job; two women sued McDonald’s because they didn’t think they should pay the full amount for a Quarter Pounder without cheese. These are real. Seriously.)

And you’d be surprised how many alligator lawsuits have happened in Florida.

If you really want to protect your business, you will have to assess your business risks and pair insurance coverage policies with your needs. Here are a few insurance policies you’ll want to consider:

How Much Will Insurance Cost In Florida?

Insurance is an investment — it’s an added expense, but you’ll thank yourself when your bottom line is protected against accidents and mishaps.

Insureon researched the market to determine the median costs of key business insurance policies in Florida. They found that, on a monthly basis, small businesses will pay $45 for general liability, $46 for workers compensation, and $61 for professional liability. According to Fearnow Insurance, commercial property insurance averages out to around $742 a year (about $62 a month), and commercial auto plans similarly cost $750 annually on average (close to $63 a month).

As mentioned above, damage to your property caused by hurricane winds or subsequent flooding may not be covered by your policy on its own. You can purchase a National Flood Insurance Policy plan to cover damage to your business and property caused by flooding for around $700 a year, or around $58 a month.

Multiple factors will affect the cost of your policy. Here’s a breakdown of what the most prominent ones are:

• The Size Of Your Business: Businesses that operate in buildings with more square footage will be charged more since, naturally, insurance companies have a larger amount of space to insure.
• Whether You Own Or Rent Your Building: If you own your building, that’s an asset in addition to equipment and similar business property which a commercial property insurance policy will protect, so that can make your rates go up. If you’re renting, landlords will likely want to see that you have business insurance before handing you any contracts to sign.
• Your Payroll: Workers’ comp and business interruption insurance are especially affected by your payroll. The more employees on your payroll, and the more they earn in a year, the more expensive those policies will be.
• The Number Of Your Employees: More employees to insure translates to higher insurance costs.
• Your Business’s Risks: Insurance companies will look at the kind of business you run to determine how likely (and how expensive!) compensating your claims will be. General contractors will be charged more than barber shops because of how much more dangerous it is to work in construction.

Because of the amount of details that go into determining the cost of a policy, it’s difficult to give precise rates. Talk with an insurance professional or broker if you’re interested in a quote for your business.

Ways To Save On Small Business Insurance In Florida

Saving on insurance in Florida is similar to how you would cut down costs on policies in other states.

Here are different options you can try:

• Opt For a Higher Deductible: Raising your deductible will lower your yearly premium. Of course, this boils down to preference. Sit down and assess whether you think it’s likely that you’d file a claim and if a higher initial fee before your insurance kicks in has a better long-term benefit.
• Bundle Your Policies: More often than not, you’ll get a better deal if you purchase policies together as a package. Look for a business owners plan (BOP) to bundle general liability, commercial property, and business interruption service.
• Keep An Eye Out For Discounts: Similar to how you can save on personal auto insurance with a good driving record, insurance companies often offer discounts for businesses that have a clean claims record. If you’re wondering what your record is like, you can ask your current insurance carrier for a loss run report.
• Pay For The Policy In Full: If you have the cash to pay for your insurance policy in full, this could translate to a decent amount of savings down the road.

Depending on your industry and the type of business you run, there may be even more specific ways for you to cut back on your insurance premium. Look into whether industry-specific safety training courses for your staff will help you bring down your yearly insurance costs, for example.

Insurance Agencies & Resources for Florida Small Businesses

All of the major insurance companies sell policies to Florida businesses. You can read and compare prices on their websites. Check into places like CoverWallet, Insureon, CoverHound, Hiscox, The Hartford, Progressive, and others.

However, there are some local insurance options as well.

• Florida Office of Insurance Regulation
• Citizens Property Insurance Corp.
• Florida Agency for Health Care Administration
• Florida Department of Financial Services/Division of Worker’s Compensation
• Florida Market Assistance Plan
• National Flood Insurance Program

Florida Small Business Insurance: Final Thoughts

The process of finding a great policy boils down to research. Know the averages for your industry and compare competing rates. Those two things will help you make the best decision for your business. Start with an idea of the risks your Florida-based business might face. As mentioned above, you’d be surprised how many alligator lawsuits occur in Florida. Do you or your clients need protection from alligators? Or maybe more practical risks like a data breach or someone slipping and falling?

When you meet with an insurance expert, discuss if it is cost-effective to bundle your personal and business insurance policies. If not, go shopping for the best policy! Follow these steps required to make an insurance purchase.

Be aware that Floridians can be litigious, and judge your needs accordingly. Even if you don’t need insurance legally, it’s cost-effective and easy to start with general liability and work from there. Whether it’s protection from hurricanes, gators, or people who don’t want cheese, take complications in stride because you know that even the worst-case scenarios don’t have to send you into bankruptcy. Your small business deserves coverage, and you deserve peace of mind.

Florida Small Business Insurance FAQs