Florida, with the fourth-largest economy in the United States, is a business-friendly environment made up largely of small businesses. Every Florida-based small business needs to consider business insurance coverages like general liability and a business owner’s policy (BOP). The Sunshine State also requires certain policies, like workers’ compensation (for businesses with at least four employees) and commercial auto insurance (for businesses with a dedicated vehicle).
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Florida Business Insurance Requirements
Not every type of insurance is required in Florida, but there are a few required coverages and some industry-specific requirements to keep in mind.
Workers’ Compensation
Workers’ compensation insurance is mandatory if you have four employees, regardless of whether it is a part- or full-time worker. This includes corporate officers and limited liability company (LLC) members.
However, there are some specific exceptions to this general rule:
- Small businesses in the construction industry are required to carry workers’ compensation if they have at least one employee, whether they are full- or part-time. Once the job begins, subcontractors are considered employees of the contractor and will need to be provided with workers’ compensation as well.
- Agribusinesses with at least six full-time employees, or twelve seasonal workers (defined as more than 30 days but less than 45) are required to offer workers’ compensation insurance.
Besides being required, it’s good coverage to have, as workers’ compensation helps with wage replacement and medical bills if an employee gets injured or becomes ill from their job. Most providers will also offer a return-to-work plan to help you and your employee get back on the job.
Commercial Auto
If your business has a delivery vehicle, work truck, or semi-truck, you will need to meet the minimum liability requirements. Insurance liability minimums set by the Florida Highway Safety and Motor Vehicles Department are $10,000 in property damage per loss. Personal injury protection, sometimes called PIP, is also required, with a minimum limit of $10,000.
If your vehicle is registered as a taxi, then you must carry bodily injury coverage with a minimum limit of $125,000 per person, $250,000 per occurrence, and $50,000 in property damage.
In Florida, rideshare vehicles, like the ones used for Uber or Lyft, do not need to be registered as a taxi.
A commercial auto insurance policy can carry both liability and first-party coverage for occupants, pedestrians, vehicles, and property involved in a loss. It can also have some additional options, like roadside assistance.
General Liability
General liability insurance is not required statewide, though some local municipalities may require it. Also, some specific industries require general liability for licensure. For example:
- Electricians must provide proof of general liability insurance within 30 days of receiving their license. The policy must have a limit of at least $300,000 per occurrence.
- Daycares are required to have general liability with a minimum of $100,000 per occurrence and $300,000 aggregate coverage.
- General contractors must carry a policy with a minimum of $300,000 per occurrence and $1 million aggregate.
- Heating, ventilation, and air conditioning (HVAC) technicians who are licensed and registered must carry a policy with a minimum of $100,000 in general liability insurance.
- A class “B” security agency must have at least $300,000 in general liability coverage.
This list isn’t comprehensive, so make sure you check with local requirements in your area.
To bid on a project, rent a space, or participate in an event, you will usually need a certificate of insurance (COI) showing you have general liability in the state.
Sometimes called a commercial general liability (CGL) policy, this policy has broad coverage for your business from third-party claims and is focused on three areas:
- Bodily injury.
- Property damage.
- Personal and advertising injury.
Florida general liability insurance often includes additional coverages. Some examples are product liability for losses from a product you manufactured or helped distribute and insurance for the damage caused to a premise that your business rents. The costs of not carrying insurance are such a risk that it makes sense, whether it is required or not, to carry liability insurance for your business in Florida.
Other Types of Small Business Insurance for Florida
Beyond the required coverages, there are other policies to consider, especially if it applies to your business’ nature of operations.
Type of Coverage | What It Is |
|---|---|
Professional Liability | Covers claims of financial harm or loss as a result of advice or failure to perform a contracted service made by a third party |
Commercial Property | First-party coverage for property owned, typically fixed property or contents |
BOP | Liability protection, first-party protection for your property and usually, business lost income coverage |
Inland Marine | First-party coverage for tools and equipment that are stolen or damaged |
Commercial Umbrella | Excess liability coverage for claims that exceed the limits of your liability policy |
Cyber Liability | First and third-party coverage for losses related to data breaches, hacking, or other cyber-related losses |
Employment Practices Liability Insurance (EPLI) | Provides coverage and defense against claims of wrongful termination or other harmful employment practices |
This policy is commonly referred to as errors and omissions (E&O) insurance and is more focused on the service sector. The protection it offers a business is related more towards negligence in advice or adhering to a contract, as opposed to the more general liabilities of a CGL.
For example, if someone claims you gave them bad financial advice or failed to deliver on a contract, this insurance is what you would turn to for help. If you own a financial planning or architecture firm in Florida, this is a policy you should consider.
Commercial property is a first-party coverage, meaning it is for your property and not someone else’s. If you own a building, have a rented office space with furniture, or have a warehouse full of inventory, this insurance is something to consider. Depending on how the provider writes the policy, it may have coverage for tools and equipment—or you may need to insure that with a separate policy called inland marine (which we cover later on).
On commercial property policies, losses are usually handled on a named-peril basis, and coverage is typically limited to the listed location. This means the types of losses covered are described in the policy and are only associated with the listed location. For example, the policy may say that fire, theft, or vandalism are covered losses at a specific location, but wear and tear of the office coffee machine and the printer are not covered.
A BOP is a great option for Florida small business insurance because it combines general liability and commercial property. Usually, insurers will include a third coverage called business income insurance.
For most providers in Florida, businesses with revenue under $5 million or fewer than 100 employees are eligible for a BOP. It is usually more affordable to bundle the policies than to purchase each one separately, and the BOP offers the convenience of having one policy for multiple types of coverage.
If you are a Florida business owner working in an industry with tools or equipment—like a painter, contractor, or handyperson—you’ll need to look into inland marine. This is a first-party coverage similar to commercial property. However, while commercial property is limited to a listed location, inland marine insurance “travels” with the tools and equipment.
So, if you are working at a job site and an expensive piece of equipment is stolen, you would file a claim on your inland marine policy. Some providers will provide blanket coverage for tools and equipment, and others will have you list or “schedule” each individual item on the policy.
A commercial umbrella policy is an excess liability policy. If you work in a riskier industry and are concerned that the limits on your general or professional liability policy may be insufficient, a commercial umbrella policy can be purchased. The policy’s limits would not come into play until the limits of the other policy are exhausted.
For example, you have a general liability policy with a limit of $2 million and a commercial umbrella policy with a limit of $1 million. Once the general liability policy of $2 million is exhausted, you could file a claim for the additional $1 million in coverage from the umbrella policy.
Despite the “liability” part of the name, cyber liability insurance is similar to a BOP and is usually divided into first and third-party coverage:
- First-party cyber liability helps with the expenses you face from a data breach which can include investigating and notifying anyone impacted.
- Third-party coverage is a type of liability that can help protect your business if customers decide to sue you over negligence. In the event of a data breach, your business may be subject to fines and penalties from the government or private entities. This part of the policy can also help with those fines.
EPLI is an important Florida small business insurance policy because it offers protection for your business against claims of wrongful termination, hiring, and employment practices. Examples of an EPLI claim include sexual harassment and gender discrimination.
In March 2023, three Florida businesses were ordered to pay a combined amount of $570,000 for three separate incidents of wrongful termination. One of the businesses was fined $100,000 for what was determined to be gender discrimination leading to the termination of the employee.
Florida Small Business Insurance Costs
Costs for Florida business insurance vary widely depending on the industry and size of the company. We obtained sample quotes from a variety of different brokers and carriers. All of them were for companies with three employees and an annual revenue of $250,000.
Industry | Estimated Annual Premium | Coverage Type | Coverage Amount |
|---|---|---|---|
Handyperson Service | $750 to $3,100 | General liability | $1 million per occurrence, $2 million aggregate |
Photography Service | $500 to $550 | General liability | $1 million per occurrence, $2 million aggregate |
Restaurant | $720 to $4,580 | BOP | $1 million per occurrence, $2 million aggregate (includes liquor liability) Cost of building and kitchen equipment |
Landscaping | $1,772 to $5,424 | BOP | $1 million per occurrence, $2 million aggregate, Cost of building and equipment |
There are a number of factors that providers consider when evaluating premiums. Some of these are:
- The geographic region within Florida, including the specific county
- Yearly revenue and payroll
- Claims history
- Risk management and training
- Business experience
- Prior insurance history
Florida is an expensive state for insurance companies. Homeowner Florida business insurance rates have increased by 57% since 2015. The high risk of natural disasters like hurricanes, coupled with the high cost of construction, has led to shrinking insurance options for Floridians as more providers like Farmers announce they are going to reduce policies in the state.
How To Get Florida Business Insurance
There are several options available when looking to get commercial insurance in Florida.
Citizens Property Insurance Corp.
One option unique to Florida is the state provider Citizens Property Insurance Corp. This company was created by Florida lawmakers in 2002 as an option of last resort but has become the largest insurer in Florida with over 1 million policies or over 10% of the Florida market. This growth includes commercial policies.
Provider
Insurance policies are underwritten and serviced by an insurance company or carrier. This is true whether you use a broker or an agent. There are providers that work directly with consumers and generate quotes online which you can then purchase, and there are others that take a multifaceted approach by offering insurance online and selling through agents. Finally, there are providers that only sell insurance through agents.
Agent
An agent works for the insurance company and helps connect the carrier with prospective policyholders. Some agents are captive agents and only sell insurance for one insurance company. Others are called independent agents and work with multiple companies. State Farm is a provider with many captive agents, while Liberty Mutual is a carrier that works with independent agents.
Broker
A broker is like an agent, except the broker works on behalf of the customer and not for the insurance company. Usually, a broker will work with many different carriers and provide insurance advice to the client while helping them find the best option for insurance.
Florida Small Business Statistics—Why Insurance Is Important
Florida has the fourth-largest economy in the US, and this is primarily because of the significant role small businesses play in the state. It is also the fourth-most populous state with a population of approximately 22.2 million.
Consider the following facts about small businesses in Florida:
- There are 3 million small businesses. This number represents 99.8% of all Florida businesses.
- There are 3.6 million small business employees, which translates to 40.5% of all employees in Florida working for a small business.
- Professional, scientific, and technical services is the largest industry category for small businesses with 379,615 employees.
- Exports by small businesses reached $23.8 billion. This accounts for 57.1% of all exports from the state.
Florida small business insurance matters because it protects those small businesses from losses like a storm, theft, or a lawsuit. Depending on the coverage, it can even provide income during downtime when the business cannot operate because of a claimable loss.
Frequently Asked Questions (FAQs)
Yes, workers’ comp is required for businesses with at least four employees, regardless of whether the employee is full- or part-time.
General liability for a handyperson business can range from $750 to over $3,000. A BOP for a restaurant can cost as little as $700 to over $4,500.
Farmers, Bankers, Centauri, and Lexington insurance companies have announced—following Hurricane Ian—that they will cease selling policies or limit new policies in Florida.
The Florida legislature created Citizens Property Insurance in 2002. It exists for homeowners who were denied insurance coverage in the private market.
There are 3 million small businesses in Florida. This represents 99.8% of all Florida businesses. These small businesses employ 3.6 million employees.
The Florida Department of Financial Services oversees insurance in the state through the Florida Office of Insurance Regulation. If you have a complaint or problem with a company, you can fill out a form online.
Bottom Line
The Sunshine State has a growing economy built on small businesses, many with one to three employees. Workers’ compensation is required for businesses with at least four employees, and commercial auto is required if your business has a vehicle. Some industries require general liability too.
Insurance costs are rising in Florida—and a great way to save money on business insurance is to compare quotes from multiple providers. Simply Business is an online broker that generates tailored quotes in real time. Once you have determined which policy is best for your business, you can purchase the policy online.
