Owning a business means a lot of your revenue will go to business-related expenses. With so many expenses already, it’s easy to feel tempted to cut corners when taking out insurance. While saving on insurance seems tempting, it’s not worth the risk. Firstly, there are some business insurance requirements in Florida that you’ll need to know about before cutting back on your policy. Secondly, you need to make sure that your business insurance covers any high-risk areas for your specific industry.
An Overview of Business Insurance Requirements
Business insurance covers various aspects of running a business. From your property, to equipment and theft – your policy should cover your losses in case if an unfortunate event. There are different types of business insurance cover that can apply to you:
- General liability insurance
- Commercial property insurance
- Worker’s compensation
- Professional liability insurance
- Commercial auto insurance
All of these types of cover play in important part in managing the risk of your business so that you’ll be covered if an incident occurs. While it might not be essential for you to take out cover in all of these areas, you’ll need cover in at least some.
If your business has no vehicles, for instance, you won’t need commercial auto insurance and if you don’t employ anyone you won’t need worker’s compensation cover.
General Liability Insurance
For businesses, general liability insurance covers a broad range of incidents where your business causes harm (or is alleged to have caused harm) to any third party. Cover should include both bodily injury liability and damages to property caused to a third party. The cover is valid for claims made against you, your employees or your products and services. General liability insurance cover should pay out for legal disputes when claims against your business arise.
If any of your business operations cause bodily injury or property damage to a third party, your general liability should pay out according to your policy for the financial loss.
Even the smallest home-based businesses can benefit from general liability insurance, so this form is business insurance is highly recommended. Whatever legal accusations made against your business should be automatically covered by general liability insurance.
Commercial Property Insurance
If you run your business from a physical location, commercial property insurance can benefit you. Regardless of whether you own or rent your business premises, you need to insure it so that you’ll be covered if an incident occurs. Commercial property can pay out in the case of the following losses:
- Fire and smoke damage
- Acts of vandalism
- Loss due to theft
Your property insurance will cover damage to your commercial building if you own it. For instance, you should be able to claim for damage such as burst geyser or building damage from a tree that fell over.
If you don’t own your building, your insurance shouldn’t typically be responsible for building damage. Instead, your landlord should have a building insurance policy on the business property where you rent. When renting, the benefit of commercial property insurance is that it covers your office equipment, like computers and other necessities to run your business.
Worker’s Compensation Cover
In Florida, you are required to have worker’s compensation cover if your business employs more than 4 people. For some industries, such as construction, you must have worker’s compensation coverage to employ even a single person. This includes yourself, the business owner.
Worker’s compensation insurance covers medical bills for employees who are injured on the job. Cover should also include wage replacement for the duration that an employee is unable to return to work.
Being covered for worker’s compensation is important – especially if you work within an industry that could be dangerous. If work in your industry is potentially dangerous, such as electrician work, construction or demolition, your business will be legally required to take out worker’s compensation insurance.
Even if you don’t operate in a high-risk industry, it’s still important to have cover, as you never know what could happen. If workers get injured while on the job, your business can be liable for compensating losses. This applies even in some cases where the injury isn’t directly linked to an occupational hazard. Although there may be legal disputes, an employee that slips on the bathroom floors at work and suffers injuries could try to claim damages from you.
Professional Liability Insurance
Professional liability insurance (also commonly referred to as errors and omissions insurance) is similar to general liability insurance, but they shouldn’t be confused. Whereas general liability insurance covers damage your business causes to a third party, professional liability insurance covers damage to your clients or customers as a direct result of your products or services.
Both direct damage as a result of your product or service as well as failure to properly complete work is covered by professional liability insurance.
For example, let’s say you own a construction company and you’re busy building a house for a client. A few months after completing the project, your client comes back to you and complains that the house you built has multiple cracks and other issues that have cost a sizable amount to fix. Your client wishes to claim this amount from you as he/she believes you didn’t provide an adequate service as promised. In this case, you could rely on professional liability insurance to cover the cost of damages to your client.
Professional liability insurance is especially applicable to medical professionals and lawyers, in which case it’s often called malpractice insurance. Other businesses that could benefit from professional liability insurance includes veterinarians, accountants, electricians and more.
Commercial Auto Insurance
If your company runs any vehicles, commercial auto insurance is a must. Commercial auto insurance covers accidents for vehicles that you use for the following purposes:
- To transport goods and equipment for your business
- Transporting employees and/or clients
- Vehicles used for delivery and commute services
- Vehicles towing a trailer for business purposes
- Heavy-duty trucks
In case of an accident, your commercial auto insurance policy should cover the following:
- Medical expenses for all employees
- Legal coverage in case a third party wants to claim damages
- Vehicle repairs or replacement costs
- Third party liability costs
Even if you don’t own any company vehicles, you can benefit from commercial auto insurance. If you have employees that travel for business in their own vehicles, your auto insurance will pay out for damages in the event of an accident.
To claim for your damages, you must be adequately covered. Ask your insurance provider what the maximum amounts are your can claim for different benefits. This is a good way to know the full extent of your coverage so you can revise it if necessary.
Business Owner’s Policy: All the Business Insurance You Need in One Plan
Like most businesses, your company will likely have broad range of business insurance requirements. A company that employs people while also operating some vehicles, will need both worker’s compensation and commercial vehicle insurance, for instance. The problem is that having a different policy for each form of cover will become difficult to manage. That’s where a business owner’s policy comes in.
A business owner’s policy is often tailored to the unique business insurance requirements of your company. A business owner’s policy will cover all the areas of your business that you need cover for, while omitting forms of cover you don’t.
For instance, if your business doesn’t run any vehicles and you also have no employees traveling in their own vehicles for business purposes, you won’t need commercial auto insurance, so it will be excluded from your policy.
Forms of cover that can be included in your business owner’s policy will depend on your insurance provider, but can include anything from data breach insurance to business interruption insurance and more.
To learn more how business owner’s policies work, as well as how you can benefit from one, contact Pini Insurance. Pini Insurance is a leading insurance provider in Florida. Policies offered vary from business insurance, to personal auto and life insurance. Call Pini Insurance today to learn if you can benefit from our superior products and competitive prices.