Owning a business is itself a risk, but owning an uninsured business can add to your future financial worries. Many new business owners in Florida opt out of several insurance policies because the state does not require them.
Choosing not to purchase certain insurance policies may save you money when you first start your business. However, this can be a costly mistake as you ramp up production, hire more employees, and get more customers. Even the smallest accident can result in expensive medical or legal bills. Exploring your insurance options is the best way to decide what coverage your business needs to protect itself from potential accidents and legal expenses.
Florida requires most businesses to have workers’ compensation. This policy will help pay for any expenses related to an employee suffering an injury while working. Workers compensation for Florida businesses will protect you from having unduly high financial burdens in the case of a workplace accident.
According to state law, businesses with four or more employees will need to provide workers’ compensation but note that construction and agricultural companies have different regulations. If you hire out-of-state or contract workers in Florida, you’ll also need to ensure these workers have coverage that meets or surpasses Florida’s workers’ compensation requirements.
As a business owner, you can opt yourself out of workers’ compensation. Members of limited liability corporations can also choose not to have workers’ compensation coverage. If you decide to waive your compensation, you’ll need to apply for an exemption on Florida’s workers’ compensation website.
Commercial Auto Insurance
Florida has a minimum auto insurance requirement for all drivers. However, many owners opt to purchase commercial insurance, given Florida’s higher than average crash rates. In 2017, Florida was ranked sixth for states with the most fatal car crashes.
In 2017, the state also saw 3,112 crash-related fatalities that year. The state is also ranked high for the number of crashes that occur annually. In 2019, Florida had 400,859 car crashes, and those accidents produced 3,222 fatalities and 254,363 injuries.
If your workers are involved in a car crash while driving a company vehicle, your business can be held financially and legally responsible. While the minimum requirement for commercial auto insurance may cover some of those costs, you’ll want to explore additional coverage if your employees commonly drive while on the job.
Commercial Property Insurance
Hurricanes, wind, and hail cause much of the property damages businesses face in the state. Because of the frequency of these weather occurrences in Florida and the extent of damage they can cause, many commercial property insurance plans won’t cover weather-related damages.
If you live in a high-risk flood area, there’s also a good chance your plan doesn’t cover flooding. While additional property and flood insurance can create additional up-front costs for your business, they can potentially save you from financial ruin in the case of a natural disaster.
General Liability Insurance
General liability insurance isn’t mandatory for Florida businesses. However, if your business’s services or products cause a third party bodily harm or property damage, you could face a hefty bill. Without it, your business could be on the hook for paying large expenses related to harm your business caused another individual.
Professional Liability Insurance
Your general policy won’t cover costs related to faulty products or services. Professional liability insurance can fill that gap and help your business pay for errors in your employees’ work.
Product Liability Insurance
If your business produces physical products, you’ll want product liability insurance. This policy protects your business from incurring a financial burden if your product causes someone damage or injury. Product liability insurance will also help you cover legal costs in the case of a lawsuit alleging that your product is faulty or unsafe.
Business Interruption Insurance
Natural disasters, severe flooding, or a fire can cause your business to come to a complete standstill. Your general insurance policy likely won’t provide financial relief if a catastrophic event halts your business.
Having business interruption insurance will make sure your business is compensated for lost income during this time. Given the high frequency of flooding events in Florida, this optional insurance policy can save your business from financial ruin.
When it Comes to Insurance, You’re Better Off Safe than Sorry
It may be tempting to forego additional insurance to save money in the short-term. However, Florida’s high rates of car crashes, hurricanes, and other potential threats to your business may make the initial costs worth it when an accident or natural disaster happens. Purchasing additional insurance policies may offset much higher costs your business may face in the case of an accident or severe weather event.