Business Insurance For Florida Small Businesses
Greetings, business owner from the Sunshine State!
If you’re here, that probably means you’re one of the small business owners in Florida that helps employ 3.3 million employees across the state. As a crucial component of the state’s infrastructure, your business helps make Florida the fourth largest economy in the United States with nearly half that workforce employed by small businesses. So, small business owners are big business in Florida. The state also lands frequently on lists of the best states to do business because of its business-friendly tax codes and lack of state income tax.
However, Florida often finds itself in the top five worst states for business lawsuits. With a high record of litigation, it’s important to think about business insurance. Business insurance is an important part of risk management for any business owner and knowing what your legal responsibilities are is the first step.
Table of Contents
- Florida Business Insurance Requirements
- Florida’s Worker’s Compensation Laws
- Florida Commercial Auto Insurance
- Florida Health Insurance
- What Liability Insurance Should Florida Businesses Have?
- Other Insurance Policies For Florida Businesses
- Insurance Agencies & Resources for Florida Small Businesses
- Florida Business Licensure Information
- Choosing The Right Insurance
- Final Thoughts
Florida 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: Needed if you have four or more employees or if you work in construction. Contractors are required to guarantee that sub-contractors have worker’s compensation.
- Commercial Auto Insurance: If you have company vehicles, 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.
But what 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 on the job, and it also provides lawsuit protection for the employer.
Here are a few of the things that workers compensation covers:
- Medical Bills: This is 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 accident, natural disaster, vandalism, and theft. If your vehicle is an essential part of your business, 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 2018 survey determined that only 38% of Florida small businesses offered health insurance to their employees. Here’s a break down 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 (and health insurance is optional), the government’s Small Business Health Options Program (SHOP) group health plans are available to you during the open enrollment period.
SHOP will walk 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
What Liability Insurance Should Florida Businesses Have?
Even though Florida doesn’t require small businesses to have a general liability insurance policy, considering that the Sunshine State finds itself on lists of the most lawsuit-prone areas to run a business, I think that sounds like a dangerous combination. (Rounding out the other top five, for the curious, are: California, Illinois, Missouri, Louisiana.) Maybe risk-taking is your thing, but it’s easy — and affordable — to add a simple general liability plan for any business.
General liability insurance protects you in the event of a lawsuit or an accident. Claims against your business can arrive in the form of bodily injury, property damage, personal injury to a customer (including slander or libel), or false advertisement. At the very minimum, it protects your business from financial ruin if someone were to slip, fall, and sue you. (This type of insurance is often referred to as slip and fall insurance.) For all types of business owners, general liability offers comfort to clients and ensures that they won’t be abandoned if an accident occurs.
Start with a general commercial liability foundation. From there, it’s easy to add other insurance coverage options based on your business needs.
Other Insurance Policies For Florida Businesses
Time to be real honest: 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. 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.
Can general liability protect you from any accusation, lawsuit, scandal, or alligator-based accident? No. It’s a good start, but 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 other insurance policies you may want to consider:
1. Commercial Property Insurance Or Business Owner’s Policy
Commercial property insurance protects the property needed to run your business. A commercial policy covers your building, business products inside your building, and other people’s property while it’s in your possession. Property damage due to theft also falls into this category. Since many businesses benefit from having both general liability and property insurance, many insurers offer a bundled package that includes both general liability and commercial property coverage. That policy is called a Business Owner’s Policy (a BOP) and it sometimes comes with business interruption coverage as well.
2. Professional Liability (E&O)
Professional liability insurance (referred to as errors and omissions/E&O) covers the cost of defending your company in a lawsuit where the claim is that your business caused a financial loss for a client (errors) or did not perform a service as required (omissions). This type of insurance may be required for medical and legal businesses, but it is generally an add-on to liability insurance.
3. Product Liability
Product liability exists to cover the damages of a lawsuit brought on by a faulty product. This policy is a type of insurance that works in addition to your general liability insurance to cover the costs of a lawsuit because your business caused bodily harm/mental anguish.
4. Cyber Insurance Or Data Breach Insurance
Cyber insurance, or data breach insurance, is there to protect businesses from the costly after-effects of a data breach. This policy also gives the insurer access to people who can assist them through the legal scrutiny of following data-breach protocol. When customers give you their data, they have reason to believe you’ll keep it safe, but even highly protected companies can sometimes fall prey to a breach.
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. Most general liability policies start around $20 a month for a million dollars of coverage, but check and compare online.
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 Business Licensure Information
All insurance companies, agents, and brokers must be licensed with the state of Florida through the Florida Department of Financial Services. Through their website, you can conduct a license search to see if an agent or company is registered to sell you insurance in Florida. The same department is also responsible for overseeing worker’s compensation claims.
Insurance agents and brokers who sell in Florida need to pass a state exam after a minimum number of classroom hours.
Choosing The Right Insurance
The process for 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. Like I mentioned above, you’d be surprised how many alligator lawsuits occur in Florida. Do you or 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.
Florida is beautiful and fun and your small business deserve to thrive in this state that boasts so much rich culture and passion for innovation.
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 the peace of mind.