Every new company needs protection.
Here’s how to choose the types of business insurance that fit your business.
According to a 2023 survey, an estimated 75% of small business owners do not have enough insurance and 70% do not understand what their insurance covers.
Considering how common (and expensive) commercial losses are, that number is much too high.
If you’re here, you’re probably not asking whether business insurance is worth it. You’re asking the more practical question: What business insurance do I need, and how much is enough for the way my company actually operates?
Below, we’ll start with a fast way to narrow your options, then we’ll break down 13 essential types of business insurance that most Florida businesses should at least consider.
What Business Insurance Do You Need? (A Checklist)
Every business is different. A restaurant has different risks than a handyman. An accountant needs a different safety net than a piano teacher.
Here’s a quick checklist to give you an idea of what policies you should consider:
- Do customers, clients, or vendors come to your location? (If you answered “yes,” you should look into General Liability.)
- Do you own equipment, inventory, tools, or anything you could not afford to replace tomorrow? (If you answered “yes,” you should look into Commercial Property, and if your property moves around, deliveries, job sites, installations, you should also ask about Inland Marine.)
- Could a shutdown (even a short one) seriously hurt cash flow? (If you answered “yes,” you should look into Business Interruption.)
- Do you provide advice, professional services, designs, or deliverables someone could claim caused them a financial loss? (If you answered “yes,” you should look into Professional Liability (E&O).)
- Do you store customer info, take electronic payments, or rely on email systems and software to operate? (If you answered “yes,” you should look into Data Breach and Cyber Risk.)
- Do you have employees, or are you planning to hire soon? Also, does anyone drive for work? (If you answered “yes,” you should look into Workers’ Compensation and EPLI.)
- Do you or your employees drive for work? (If you answered “yes,” you should consider Commercial Auto coverage.)
- Do you sign contracts that require higher liability limits, have higher foot traffic, run multiple vehicles, or simply want more protection beyond your base policies? (If you answered “yes,” you should look into Commercial Umbrella insurance.)
This list isn’t meant to “prescribe” a perfect policy bundle, it’s meant to show why most businesses need multiple types of business insurance, since each one protects a different part of your risk.
Essential Types of Business Insurance
Instead of treating insurance like one purchase, think of it as a set of tools. Each policy does a different job, and the list below walks through the core types of business insurance most owners should understand before they buy.
1. General liability insurance
General liability insurance helps protect your business against third-party bodily injury, property damage, and certain advertising injuries like libel or slander. This can come up fast, for example when a customer trips in your office or you accidentally damage something at a client’s location.
2. Commercial property insurance
Commercial property insurance helps protect the physical things your business owns, whether that’s a building, inventory, equipment, or furnishings, after a covered incident like a fire or storm damage.
For example, if a fire destroys your commercial kitchen or a hurricane damages your warehouse roof, this is the coverage category that is meant to respond, depending on your policy.
3. Business interruption insurance
Business interruption insurance helps reimburse income you may miss out on while recovering from a covered disaster, like a fire, theft, or vandalism. If you had to close for weeks while repairs happened after a covered loss, this is the kind of coverage designed to address that missing income, within the terms of your policy.
Make sure to discuss your options and coverage exclusions with your independent insurance agent. Never assume that any and all interruptions can be insured against. The good news is that many absolutely can be!
4. Business owner’s policy (BOP)
The three coverages above, general liability, commercial property, and business interruption, are commonly bundled into a Business Owner’s Policy, also called a BOP. If you need all three, a BOP is often a practical way to package them.
5. Professional liability insurance (E&O)
Professional liability insurance is often called errors and omissions (E&O) coverage or malpractice insurance, but it is not just for doctors and lawyers. If a client claims your advice, work, or a simple mistake in a deliverable caused them a financial loss, this is the coverage category built for that kind of allegation.
6. Data breach and cyber risk insurance
Cyber risk insurance is not just for huge companies. Small businesses are often targeted because attackers assume security is weaker. If ransomware locks your team out of systems, or customer data is exposed, this is the coverage category meant to help address those kinds of events, depending on the policy.
7. Workers’ compensation insurance
If an employee gets hurt on the job, even a common injury like a back strain from lifting, workers’ comp is the coverage designed to respond.
In Florida, workers’ compensation is one of the few business coverages that is often required. The rules depend on your employee count and whether you are in construction.
8. Employment practices liability insurance (EPLI)
EPLI helps protect against lawsuits from interviewees, employees, and former employees who allege harassment or discrimination. Even an allegation from a former employee can turn into expensive legal costs to defend, this is the type of policy meant to help with that risk.
9. Commercial auto insurance
If you or your team use vehicles for business purposes, personal auto insurance is typically not enough. If someone gets into an accident while driving to a job site, delivering products, or running business errands, commercial auto is the coverage category designed for that business use.
10. Inland marine insurance
Despite the name, inland marine insurance is about property in transit or temporarily stored offsite. If you have tools in a truck, equipment moving between job sites, or goods being shipped, this is often the coverage that helps protect those items while they are on the move, depending on how your policy is written.
11. Commercial flood insurance
Most commercial property policies do not cover floods. This is “flood” as defined by FEMA and the National Flood Insurance Program (NFIP), not a broken pipe. If rising water from outside the building causes damage, commercial flood insurance is the coverage category to review.
12. Key person insurance
Many businesses depend heavily on one or two people, an owner, a lead salesperson, a key technician, someone with essential relationships. If that person dies or becomes disabled and the business takes a major hit, key person insurance is designed to help the company survive the financial shock.
It’s often coupled with a pre-event buy-sell agreement. That way, surviving partners don’t wind up with unintended business partners and surviving heirs don’t wind up thrust into business ownership, debt and responsibilities they never intended to have.
13. Commercial umbrella insurance
Commercial umbrella insurance adds extra limits on top of underlying liability policies, so if a severe claim exceeds the limits of a primary policy, umbrella is designed to provide additional protection. This is often the coverage businesses look at when they have larger contracts, higher foot traffic, more vehicles on the road, or simply more to lose.
Common Questions Business Owners Ask
What’s the difference between personal and business insurance?
Personal insurance is designed for personal risks, your home, your personal car, your personal liability. Business insurance is designed for business operations, customers, contracts, employees, commercial vehicles, and business property.
Just as importantly, personal policies typically do not cover business use, and most carriers will not treat personal and commercial coverage as interchangeable. If a vehicle, property, or activity is being used for business purposes, your insurer may exclude that exposure on a personal policy, or require a commercial policy to properly cover it.
A quick rule of thumb, if the activity is how you make money, insure it like a business.
Is business insurance required in Florida?
Some coverages can be required depending on your situation (workers’ compensation is a common example). Requirements and contracts vary, so it is smart to verify what applies to your business before you sign a lease, hire, or take on a major client.
What does “line of business” mean in insurance?
A “line of business” is simply a category of insurance coverage, such as general liability, commercial property, workers’ comp, or commercial auto. Business owners usually do not need the jargon, but the idea is useful, you build a safety net by combining the right coverage categories.
Insurance That Covers You
There are a lot of factors that go into your business insurance needs. So many, that it would take an expert to understand all of them!
Harry Levine Insurance has been a forerunner in the Orlando insurance market for the past 40 years, and have built a reputation on our commitment to honesty, integrity, and excellent customer service.
If you’re starting a new business, don’t let insurance coverage confuse you! A trustworthy independent insurance agent is just as helpful at reducing unnecessary policies as they are at informing you about the essential ones.
We know that these options can seem overwhelming, but the good news is that we are the experts! At Harry Levine Insurance it’s our job to help you choose the insurance that is right for you. Call now or visit our website for a free quote.
