Florida Business Liability State Guide
General liability insurance in Florida is designed to protect your business from lawsuits, should a customer or visitor experience an injury, or have their property damaged. It also protects your business from a lawsuit associated with advertising injury.
Florida Business Insurance Key Takeaways
This is a guide to general liability insurance in Florida. Key takeaways discussed here include:
Fast Facts About Florida Small Business
In 2020, Florida was home to more than 2.5 million small businesses. The COVID-19 pandemic led to a tremendous shift in employment, and now more people are free to follow their entrepreneurial goals and launch a small business.
As of 2022, industry experts forecast a boom in entrepreneurialism in Florida. From personal services like salons and eyelash technicians, to commercial real estate development and new construction contractors, Florida’s future looks bright for your small business.
Florida has the fourth largest economy of America’s 50 states. Thanks to 15 seaports, highways, and rail lines, Florida is home to a thriving and crucial transportation sector that supplies food, merchandise, and medication to millions of Americans every day. That transportation and import industry is one reason why the Small Business Administration (SBA) calls Florida the most sustainable state wherein to launch a new business.
- A “small business” is defined as one with fewer than 500 employees.
- Of the 2.5 million small businesses in Florida, more than 550,000 are employers.
- 88% of all employees in the state work for a very small business, one that has 20 employees or fewer.
Whether you’re launching a new small business in Florida, ready to trim some insurance costs, or looking to understand and increase your business insurance coverage, EINSURANCE can help.
About Commercial Liability Insurance for FL Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your Florida business from financial loss resulting from claims of injury or damage cause to others by you or your employees. A policy typically covers:
- Bodily Injury – physical damage to a person other than an employee at your place of business and injuries caused by you or an employee at a client’s home or work place.
- Property Damage – damage caused by you or an employee to someone else’s property.
- Personal Injury – libel, slander, copyright infringement, invasion of property or privacy, wrongful eviction, false arrest, and similar acts that cause damage to a person’s reputation or rights.
- Advertising Injury – losses caused by your advertising.
- Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.
Important Conditions and Exclusions
Most commercial business policies in Florida do not cover flood damage. This is a crucial point, as much of the state is at-sea-level, or below. Business owners can purchase additional flood coverage through the National Flood Insurance Program (NFIP), which is operated by FEMA.
Florida Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in Florida. Still, that could change. There is a movement for tort reform in Florida, the state has a reputation for being litigious – meaning lawsuits are common – and the courts are known for awarding large judgments in favor of plaintiffs.
Sizeable lawsuits against small businesses happen in Florida often. At the time of writing, the average slip-and-fall settlement in Florida is $35,000. That’s after legal fees and attorney costs. If you own property or other valuable assets, you would be wise to invest in sufficient commercial general liability coverage for your Florida business to limit your risk exposure.
Other Insurance for Your Florida Small Business
- Workers Compensation Insurance is required for any Florida business with at least four full or part-time employees. Note that partners and sole proprietors do not count as employees in Florida. For the construction industry, workers compensation is required for just one full or part-time employee. Different requirements apply to the agricultural industry.
- Florida requires that all drivers carry minimum automobile insurance. If you use cars or trucks for your business, you are required to purchase a commercial vehicle policy in Florida.
How Much Florida Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of Florida business you operate or products you manufacture should determine how much Florida commercial general liability insurance you need. A good rule of thumb for most small businesses is between $500,000 and $1 million.
However, if yours is a high-risk business such as the building trades or has a high volume of interaction with the public such as a retail business, you should consider increasing your Florida business liability coverage.
- Note that if you operate out of your home, your homeowner’s or renter’s insurance has limited coverage for business liability and loss.
- Put another way, your homeowner’s policy will not step in to pay for damages or injuries caused at your home-based business.
Florida Small Business That Should Seek Higher Limits of Liability
Some business models are riskier than others. The table below explores the types of businesses that should purchase higher limits of liability on their commercial insurance policies.
You should consider a higher limit of liability if:
- You sell alcohol or tobacco in a retail setting
- You serve alcohol to customers in a bar or restaurant setting
- Your employees work in physically dangerous conditions, like construction
- You cook and serve hot food
- Your target customer demographic is the elderly
- You provide childcare or eldercare
Home-based childcare operations are among the most under-insured small businesses in Florida. Lawsuits for negligent childcare practices abound in FL, and many providers don’t realize they could be sued for hundreds of thousands of dollars should a child be injured while in their care. Know that most Florida homeowner’s insurance policies specifically exclude childcare operations. If you operate a home-based daycare, you should purchase a high level of liability insurance. Purchase the most liability coverage you can afford, because childhood injuries are life-long, lawsuits and settlements are worth millions, and public awareness of these lawsuits is usually high.
How Are Florida Business Insurance Costs Assessed?
Florida commercial liability insurance premiums are based on many factors. These include:
- The type of small business insured, and the inherent risk level
- How long you’ve been in business
- Your claims history
- Your location, and the claims history in that neighborhood
- The amount of business you do – in dollars – every month, year, or quarter
- The amount of business liability coverage you seek – a $500,000 policy will cost less than a $1 million policy
- The quantity and type of vehicles your business owns, and the individuals driving them
Insurers will consider the types of service or products you provide, the number of people you employ, how long you’ve been in business, and your claims history. Coverage is typically capped at a specific dollar amount for your policy period.
Your quest for commercial liability insurance – sometimes called “professional liability” – should start with insurers you know and respect. For a list of all commercial insurance providers in FL, visit the Florida Office of Insurance Regulation (FLOIR).
Best Companies for Florida Business Insurance
Below is a list of well-respected insurers that operate in Florida.
- The Hartford
- Gulf Coast Commercial Insurance (GCCI)