You worked hard, saved money, and are finally ready to make your dream a reality by becoming a business owner. You need peace of mind knowing your business will be covered and protected, so you can focus on turning your small investment into an enormous success. That is where commercial insurance comes in.
Commercial or business insurance protects the assets of business owners, freelancers, and independent contractors against liability lawsuits, theft, property damage, cyber attacks, and other costly risks that could financially ruin your business, and will compensate you for financial losses arising from a variety of situations.
Commercial insurance protects a business from risks or liabilities, including:
- Theft and Property damage
- Employee or Customer injuries
- Liability lawsuits
- Unexpected events
Although it will not protect your business in every situation, commercial insurance can protect your investment from unforeseen circumstances if the coverage is in force.
What are the diverse types of commercial insurance?
There are many types of commercial insurance, to serve a wide range of business needs. Each policy covers specific risks which could impact your small business.
Top recommended small business insurance policies:
- General liability insurance: General liability insurance protects against lawsuits over injuries and property damage involving a client or anyone else who doesn't work at your company.
- Business owner's policy: A business owner’s policy (BOP) protects against basic liability risks and covers damage to your business property.
- Errors and omissions insurance / Professional liability insurance: Errors and omissions insurance (E&O), also known as professional liability insurance, protects your company from liability when a client sues over a missed deadline, work error, or other mistake or oversight.
- Cyber liability insurance: Cyber liability insurance covers financial repercussions in the event of a data breach or cybersecurity threat.
- Commercial auto insurance: Commercial auto insurance covers property damage and injuries if your company's vehicle is involved in an accident. It also covers vehicle theft and certain types of damage.
- Workers' compensation insurance: Workers’ compensation insurance protects your business from medical bills due to work-related injuries, and lawsuits over employee injuries.
How does commercial insurance work?
Commercial insurance policies pay for financial losses suffered by your business. After a claim is filed, your commercial insurance provider will investigate the claim, assess the damage, and then offer you the funds to cover the loss.
Other claims are more complicated, such as a liability claim, as it often involves a lawsuit against your business when a customer, client, or third party believes your business caused them financial damage and wants compensation from you.
If you are faced with a lawsuit for an event covered by your policy, your insurance provider will likely suggest an attorney take charge of your legal defense. The attorney will either defend your case in court or offer to settle with the plaintiff.
All costs related to the lawsuit are paid by the insurance provider, up to your policy limits, after you have met your deductible. This includes attorney's fees, court costs, and any settlement or judgment amount.
Commercial insurance policy details
Commercial insurance policies are no different than other policies, as they come with their share of paperwork and fine print. An insurer will decide the premiums that you ought to pay after looking at the kind of risks faced by your business. Smaller businesses will often pay lower premiums compared to larger conglomerates.
Any plan you purchase will likely include:
- Premium: The amount a business pays for insurance coverage, or the price of the policy. Exposures, business type, location, payroll, number of employees, and years in business can all impact your premium amount. Payment terms can be set as monthly, quarterly, or annually.
- Deductible: The amount you must pay towards a claim (deductible) before the insurance provider will offer its funds.
- Policy limits: The maximum total amount of money the insurance policy will pay out. Typically, there's a limit per claim (per-occurrence limit), and a limit per the life of a policy (aggregate limit). Many commercial liability policies have a total limit of $1 million.
- Coverages and exclusions: The coverage section in an insurance policy detailing what the policy can and will pay for. Exclusions outline what isn't covered. A standard exclusion in a liability policy, for example, says that insurance won't pay the costs if you intentionally harm another person.
Review the details of your policy to know what's included and which type of commercial insurance coverage is right for you. Talk to your insurance agent if you have any questions.
Commercial insurance requirements in Florida
State laws can affect which policies you need for your small business. These policies are required for Florida businesses:
- Workers' compensation insurance: Florida state law requires businesses with four or more employees, full-time or part-time, to carry workers’ compensation insurance. This policy covers medical bills for work injuries and illnesses.
- Commercial auto insurance: Vehicles owned by small businesses in Florida must be covered by commercial auto insurance. Florida requires $10,000 property damage liability per accident and $10,000 personal injury protection.
Personal vehicles driven for work purposes should be covered by hired and non-owned auto insurance since personal auto policies usually exclude business use. This coverage can be added to general liability insurance or a business owner's policy.
How much does small business insurance cost?
Florida companies can obtain affordable commercial insurance. The cost depends on:
- Coverage limits
- Your industry and risk
- Number of employees
- Location
Commercial insurance coverage can provide crucial protection against the risks of running a small business even when it's not required.
Helping You Navigate Insurance
In a sea of options, the Windward Insurance Agency can help you find the right insurance coverage for you and your family. We have cultivated relationships with the top carriers in our State who are ready to provide quotes and options to those we represent. Let us help you navigate insurance, start by getting a quote online or call us today at 866-231-2433 for assistance.
