Florida small business insurance: What you need to know

Do I need small business insurance in Florida?

Any business that owns vehicles in Florida must insure them. Many employers are required to have workers’ comp insurance, while doctors and nurses are required to have medical malpractice coverage. Outside of state law, it’s worth noting that certain types of insurance are required to bid on federal contracts. This includes workers’ comp, general liability and automobile liability.

Businesses that fail to meet Florida’s insurance requirements could be fined, lose their professional license, and damage their reputation.

Eric Goldberg, department vice president and counsel, commercial lines, at the American Property Casualty Insurance Association, an insurance industry trade association, says businesses that don’t follow the insurance laws in their state could face severe penalties.

“Businesses should work with their insurance agent or broker to make sure they are complying with all state laws and requirements with regards to commercial insurance coverage,” Goldberg says. “Failing to do so could result in severe financial penalties or even criminal prosecution in some states.

“While penalties and sanctions vary by state, they often include relatively sizable monetary penalties for failures to comply,” Goldberg says. “Most states may issue stop work orders on businesses that fail to secure workers' compensation insurance. In addition to the monetary fines and orders to suspend operations, employers are subject to criminal prosecution in many states.”

What types of small business insurance are available in Florida?

There are several types of small business insurance available in Florida. Some, like commercial auto, are mandatory, while others, such as umbrella insurance, are optional. Among the most common forms of small business insurance are:

Commercial auto insurance

According to the Florida Department of Highway Safety and Motor Vehicles, all commercial and passenger vehicles in Florida must have at least $10,000 in personal injury protection (PIP) to cover your medical expenses, no matter who is at fault. You must also carry at least $10,000 in property damage liability coverage.

Vehicles registered in Florida as taxis must carry bodily injury liability (BIL) coverage of $125,000 per person, $250,000 per occurrence, and $50,000 for property damage liability (PDL) coverage.

Additionally, semi-trucks and other large vehicles with a serial number from the Florida Department of Transportation or the U.S. Department of Transportation must carry a minimum combined limit of $750,000 if they travel on the nation’s highways.

You can verify federal coverage requirements by checking your USDOT number with the Federal Motor Carrier Safety Administration.

Workers’ compensation insurance

Most Florida businesses are required to carry workers’ comp insurance if they have four or more employees, whether they’re full-time or part-time. Construction businesses must have workers’ comp for every employee and for subcontractors. Agricultural businesses are required to provide workers’ comp if they have six or more regular employees and/or 12 or more seasonal employees that work for more than 30 days.

Professional liability/medical malpractice

Professional liability, also known as errors and omissions (E&O) insurance, covers customer lawsuits and legal judgments over accusations of unsatisfactory work. Accountants, consultants, financial advisors and real estate professionals are just some of the professions that should carry E&O insurance.

Florida requires doctors and nurses to carry medical malpractice insurance with a $100,000 per occurrence limit and a $300,000 aggregate limit. Doctors who perform surgery or have staff privileges in an ambulatory surgical center must have malpractice insurance with a $250,000 per occurrence limit and a $750,000 aggregate limit.

Alternatively, a doctor or nurse could avoid these requirements by obtaining the same level of funding availability through a trust account or letter of credit.

Lawyers aren’t required to carry professional liability insurance, but they must inform the state whether they have this coverage each year when they register.

General liability insurance

This covers common business risks such as a customer accidentally slipping and falling at your property and employee damage to a customer’s property. It also covers product liability, copyright infringement and advertising injury.

Commercial property insurance

This insures against losses from things like fire, severe weather, vandalism and theft. Most commercial landlords require commercial property insurance in order to sign a lease.

Business owner’s policy (BOP)

This combines general liability coverage and commercial property insurance into one policy. It’s typically less expensive than buying these policies separately.

Commercial umbrella insurance

Commercial umbrella provides extra liability protection beyond the limits of your other commercial insurance policies, such as general liability and commercial auto insurance. 

Directors and officers insurance

Directors and officers liability insurance (D&O) covers the costs of defending your company and its key executives if the business is sued by a customer, creditor, vendor, employee or other stakeholder for actions the executives take.

How much does small business insurance cost in Florida?

According to Insureon, an insurance broker specializing in small business coverage, these are the average cost of common business insurance policies:

• General liability: $500 per year.
• Commercial auto: $1,762 per year.
• Business owner’s policy: $684 per year.
• Workers’ compensation: $542 per year.
• Commercial property: $800 per year.
• Professional liability/E&O: $735 per year.

The cost of business insurance depends on several factors, such as your business location, the type of work you do, the number of employees you have, and the coverage levels you’re seeking.

Which companies offer small business insurance in Florida?

There are many small business insurance companies offering policies in Florida, so you have several options. The following companies are among those that sell small business insurance in most states.

• The Hartford boasts that it has more than 200 years in the insurance business, with more than 30 years devoted to small businesses.
• Hiscox says it has more than 50,000 small business customers and bills itself as “America’s leading small business insurer.”
• NEXT Insurance specializes in small business insurance.
• Progressive is the No. 1 commercial auto insurer in the country by market share.
• Travelers is the second-largest commercial auto insurance company by market share.

How does business insurance work in Florida?

Small business insurance helps you manage your business risks and offers financial security for every small business owner. Many policies are also required by Florida laws, or to work on government contracts.

When you buy an insurance policy, you choose the amount of coverage you need in exchange for a monthly or annual premium that you pay to the insurance company.

Most of these policies will have two limits, a per-occurrence limit that covers individual events and an aggregate limit that is the total amount a policy will pay during a policy period, which is typically one year.

If you file a claim, you’ll pay the deductible, and then your insurance would kick in and provide coverage up to your policy limit.

How to get business insurance in Florida

You have many options for small business insurance in Florida. You could find an agent through your friends and business contacts or search online. Many insurance companies today allow you to compare policies, get advice and compare free quotes online.

How can Florida small businesses save on insurance premiums?

There are many ways to save money on small business insurance in Florida. You can start by comparing your coverage options from multiple providers, or through an online brokerage such as Insureon, which allows you to compare policies from multiple providers.

If you need both commercial general liability and commercial property insurance, you could bundle these policies into a business owner’s policy (BOP), which is usually less expensive than buying these policies separately.

You could also:

• Work with your insurance company to identify and reduce risks.
• Use a risk management plan to reduce your chance of a claim.
• See what changes you can make to your property. For example, installing a sprinkler system might reduce the cost of property insurance.
• Pay your premium annually, which might earn you a discount from your insurance company.

What our expert says