Essential Business Insurance Coverage in 2021

Posted in Legal Alerts on February 23, 2021

Choosing the right insurance coverage for your company provides essential safety nets and protects your business from dangerous and devastating lawsuits. All businesses, no matter the size, must choose the appropriate insurance coverage that not only fulfills legal requirements set by the state of Florida but also protects company assets. Insurance requirements and recommendations vary greatly by business type and industry. A brick-and-mortar retail store will have different insurance needs than a construction company working with potentially dangerous equipment and in potentially perilous work environments. The needs of a company’s employees must also be factored into decisions regarding what type of insurance coverage is necessary to run a business safely.

Florida Workers’ Compensation Insurance

The first essential and legally required insurance policy business owners in Florida must carry is workers’ compensation insurance. The state of Florida requires employers with four or more employees, full-time or part-time, who are conducting work within the state to provide workers’ compensation insurance for their employees. If your business is in the construction industry, the threshold employee requirement is reduced to one or more employees. The amount of coverage required depends on the industry, number of employees and entity organization. Workers’ compensation insurance can protect a company when an employee is injured while performing their normal job duties. Workers’ compensation coverage provides a legal mechanism for a company’s employees to receive compensation for lost wages due to injuries or illness stemming from work. The Florida workers’ compensation process involves a detailed claims process for both the employee and employer to follow that generally relieves a business of the burden of paying out of pocket for employee injuries. Workers’ compensation insurance also protects the company from personal injury lawsuits and being held liable for employee injuries sustained at work.

Business Owner’s Insurance Policy

Many more insurance policies are considered essential for Florida business owners even if they are not required by the state. The first three – general liability insurance, business income insurance, and commercial property insurance – are often bundled together by insurance providers to allow business owners to save on premiums; the bundle is commonly known as a business owner’s policy. General liability insurance protects both personal assets and business assets from being seized if your company is sued for causing harm to a person, damage to another’s property, and more. A business income insurance policy helps a company should unexpected events stop it from conducting business. If those unexpected events are enumerated within the policy and thus covered, the policy will help replace the loss of income. If a business owns, rents, or is leasing a property in order to conduct business, a commercial property insurance policy provides coverage for any damages that may be caused by fires, natural disasters, vandalism, etc. Some policies are flexible with regard to what they cover, while others very specifically enumerate what is and is not covered. Always read any insurance policy in great detail and ask questions before signing.

Cybersecurity Protection

In this day and age of technological advancement and increasing cybersecurity concerns, having data breach insurance and cyber-liability insurance is crucial to protecting a company’s assets. These types of insurance policies can cover the costs associated with a data security breach, including legal fees, liability, public relations, identity protection solutions, and more. A data breach can quickly cause the public to lose faith in a company and leave a business open to being sued. Having cybersecurity insurance coverage will help a company quickly and efficiently recover from a cyberattack while protecting the business’s bottom line.

Employer-Provided Health Insurance

Florida does not legally require businesses to provide health insurance to employees; however, the majority of employers in the state do provide this benefit. While health insurance may not directly “protect” the company, it does help employees get medical care needed to stay healthy and thus perform their job duties more consistently and effectively. Another benefit to providing health insurance is the potential to receive tax credits to assist in paying for it. In the end, health insurance protects a company’s bottom line by helping keep employees productive and taking fewer sick days.

Professional Liability and Commercial Vehicle Coverage

Two more types of essential business coverage for business owners in Florida are professional liability insurance and commercial auto insurance. Professional liability insurance specifically protects a company if its directors, officers, agents, or employees are found to have been negligent in providing the professional services the company sells. Commonly known as errors and omissions insurance – or E&O coverage – this insurance helps a company survive lawsuits alleging it did not carry out its promised professional duties. If a company’s operations involve workers driving company-owned vehicles, a commercial auto insurance policy will be vital to protecting the company’s assets in the event of a vehicle accident. This type of policy can cover property damage and injury claims after an accident that anyone, not just an employee, driving a company vehicle causes.

Florida Business Insurance Coverage Lawyers

Even if many business insurance policies are technically optional, having the right coverage in place to protect a company’s operations and assets is essential. Purchasing the correct insurance can be the determining factor in a company's survival in the event a lawsuit is brought against it. Consulting a knowledgeable business insurance lawyer on what types of insurance a company should carry and how to negotiate the best terms possible can help businesses of all sizes protect themselves. It is important to have these policies in place before legal trouble arises, because by then it may be too late to save a business. Contact our legal team today to discuss your business insurance questions and concerns.