How to make smart choices to protect your business and lower insurance costs
Key takeaways:
- Consider your business’s unique needs when choosing commercial policies
- Understand the risks for your business or industry
- Know what Florida law is regarding required coverage
- Shop around for the best quotes and coverage options
- Premium price is only one consideration
- Practice risk management
If you own a business in Florida, commercial insurance is essential. Unfortunately, the costs can add up. Luckily, there are many ways to save money on business insurance while getting the coverage you need. You’ll need coverage for liability, your property, employees, and protection if you have to shut down because of a storm or other unforeseen circumstances.
There are several ways to cut costs and save money on insurance while still protecting your business. We discuss the types of business policies you need for your Florida business and offer eight tips for saving money on them.
Types of essential business policies
Commercial insurance covers a wide range of needs for businesses, from protecting products and advertising to covering injuries on the property. Some policies are required, like workers’ comp, while others are optional (but still recommended).
Let’s look at the policies that are required and that you should consider.
Workers’ compensation
Workers’ comp insurance covers injuries to employees. It pays for medical bills, lost wages, legal fees, and death benefits if an employee gets injured on the job.
Florida’s state requirements for workers’ compensation hinge on the type of business and number of employees.
- Non-construction businesses – Four or more employees
- Construction and agriculture businesses – One or more employees
In Florida, all contractors and subcontractors must be covered as well. Premiums depend on each employee’s type of business and classification codes.
Commercial auto insurance
Vehicles include cars, delivery or passenger vans, trucks, limousines, buses, and fleet vehicles. If you operate one or more vehicles for business purposes in Florida, you must carry a commercial auto insurance policy, whether you own, rent, lease, or hire the vehicles. This policy covers injuries, property damage, and deaths, whether the accident involves an employee, contractor, or driver.
Now, let’s look at recommended policies.
General commercial liability
Commercial liability covers legal claims, medical bills, lost wages, and death benefits related to injuries or property damage of others.
What it covers:
- Slip and falls
- Equipment injuries
- Advertising injuries (libel, slander, copyright infringement, invasion of privacy, malicious prosecution)
- Contaminated food
- Faulty products
Some fields like construction, medical, legal, and restaurants carry a higher risk, so carrying commercial liability is essential.
Property insurance
If you own, rent, or lease a space for your business, you need commercial property insurance. It covers outdoor areas like parking lots, fencing, and signage. Your property inside is covered, too, including your inventory, equipment, furniture, electronics, and computers/printers.
Covered incidents:
- Fire
- Theft
- Vandalism
- Storms
- Flooding (caused by burst/leaky pipes or roof damage)
Note: Florida property insurance does not cover flooding caused by hurricanes. You’ll need a separate policy for that.
Product liability
You may need product liability insurance if you manufacture, sell, or distribute products. It covers injuries and damage claims related to design/manufacturing defects, strict liability, and improper warnings or instructions about a product.
Cyber liability
Cyberattacks are one of the biggest problems in the modern business world. One breach could cost you thousands, if not more. According to the 2022 Cyber Threat Report, there was a 104% surge in ransomware attacks in the U.S. last year. The healthcare industry alone experienced a staggering 755% increase in attacks. Supply chains were also hit hard, including the world’s largest meat supplier.
Cyber liability covers costs related to data breaches. Small businesses are not immune to attacks. Your business could be next if you store, save, transfer, or use sensitive data.
Business interruption insurance
Business interruption insurance covers your costs and lost income if your business shuts down due to vandalism, riots, a natural disaster, fire, or flooding. Unfortunately, most policies don’t cover COVID-related shutdowns.
Now, let’s look at ways to save money on these policies.
1. Shop around
It’s essential to get quotes from several insurance companies. Price should not be your only consideration. You want to ensure you get adequate coverage for your business’s unique needs. We also recommend that you review your coverage every year or so.
2. Know your needs
Remember that you’re not required to carry every type of policy (other than workers’ comp if you have 4+ employees). Every business has unique risks, so you need to evaluate your needs. For instance, you won’t need a commercial auto policy if you don’t drive a car for business purposes. You may not need property insurance if you work from home, as your homeowner’s policy may be enough to cover damage to your equipment or inventory.
3. Bundle up
In the insurance world, “bundling” means combining more than one type of coverage in a package. One good way to bundle is by purchasing a business owner’s policy (BOP), which includes property, business interruption, and liability coverage. You can also bundle some commercial policies with your package. If you carry homeowners’ or personal auto coverage, look into discounts to insure your business.
4. Choose a higher deductible
Choosing a higher deductible means lowering your monthly premium. It also means you’ll have to pay more out-of-pocket for damages before your insurance kicks in, but if you’re in a low-risk industry, the savings could pay off. This is an excellent way to save money if you can afford it. It will also discourage you from filing minor claims.
5. Consider different payment options
If you can put aside extra money every month, you’ll enjoy a lower premium. If you pay your premium for the whole year in full – or even pay for half a year – you could see substantial savings. Make sure you pay all your debts on time and maintain a good credit history to keep your premiums down as well.
6. Practice risk management
Risk is different for every business. You may face higher risks if you’re in the construction, retail, medical, legal, or restaurant industries. Think about your liability, as well as the chances of facing a lawsuit by a customer, client, or employee.
Ask yourself three questions:
- What are the liabilities associated with my industry?
- How much could I lose due to an incident?
- What can I do to lower my risks?
Make sure you put adequate safety protocols in place and that all employees undergo safety training to prevent accidents, damages, and losses.
7. Consider not filing claims
If you experience a significant incident, of course, you’ll probably need to file a claim. However, it would help if you considered holding off for more minor incidents. You’ll most likely enjoy lower premiums or a discount for good performance.
8. Group up
Insurance companies sometimes offer group insurance to businesses in the same industry. Business associations may offer group plans as well. It’s something to consider, especially if you’re self-employed or only have a couple of employees. Joining a business association may allow you to tap into other benefits, too, such as health insurance plans, travel services, and discounts.
Be smart about protecting your business
Having commercial insurance is necessary but you can still save money while protecting your business. The tips above will help you cut costs while ensuring protection for your assets.
Avante Insurance can help you secure the right commercial policies for your business needs at the right prices. We are a family-owned and operated insurance agency in South Florida that is ready to serve you. To get started, contact us today and request a quote.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.