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Business Insurance in Florida.
What You Should Know - Frequently Asked Questions.

Business insurance is a critical plan of sound business planning. For this reason, we have put together this F.A.Q. (Frequently Asked Questions) so you can be better informed and prepared when finding a good deal, both in terms of protection and price. If you are just looking for a business insurance quote, simply click here.

Why do I need business insurance?

Business Insurance seems even more complicated than all other types of insurance, What's this all about?

How can I make sure I have adequate coverage?

Why has business insurance gotten so expensive lately?

Any useful links?

 


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Why do I need business insurance?

When you have a business, whether personal, incorporated or in a partnership, there are numerous risks you are exposing yourself and the business itself to. Not unlike personal insurance like auto and home, business are exposed to lawsuits, fire, theft, vandalism, the elements... the list keeps going.

Some business are so large, that they are self insured. This is no small statement, this means that the company is so large, that they are willing to pay for multi million dollars lawsuits, rebuild their headquarters building in case of a fire, etc, etc. These are companies like Apple, Microsoft, Walmart, etc,etc. Not the remaining 99% of most businesses. If it is pretty much the rule, that even large companies have insurance to cover them for many hazards and risks.

Business can be sued for many reasons: breach of contracts, negligence resulting in injuries or damages to others, malpractice, errors and omissions, among many others, and the list os long. For this reason, they need many forms of liability insurance such as General Liability (for common losses such as injuries or damages to others), Professional Liability (malpractice, errors and omissions) and employees practices liability. In addition to lawsuits, there's all the material losses that can occur such as theft, hurricane, fire, employee dishonesty, etc, etc.

Business policies are highly varied in terms of customization, much more so than personal policies that tend to come in packages. Agents need to discuss your needs and put together a portfolio of products that can cover you adequately. This takes time, knowledge and effort, so be prepared to wait longer than usual for your proposals.

To get started, get a quote now.

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Business Insurance seems even more complicated than all other types of insurance, What's this all about?

Yes, it is very complex and full of details. Since is a long subject and the idea is not to get you to the level of knowledge of a licensed agent, but get some basic information to get you on the right track, we are going to summarize the type of coverages you should obtain:

General Liability: covers for accident, injuries and claims of negligence from others. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure

Product Liability or Completed Operations: manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm.

Professional Liability: this coverage is for professionals providing services. professional liability insurance (also known as malpractice or errors and omissions insurance)protects your business against malpractice, errors, and negligence in provision of services to your customers. Depending on your profession and certain factors, you may be required by the state to carry it. Physicians are required to purchase malpractice insurance as a condition of practicing in most cases.

Commercial Property: this coverage protects against loss and damage of company property due to a variety of Perlis such as fire, smoke, wind and hail storms, civil disobedience and vandalism. The definition of "property" is broad, and includes loss of revenue or income, business interruption, buildings, computers, company papers and money. They typically come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. Examples of peril-specific policies include fire, flood, crime and business interruption insurance. All-risk policies generally cover risks faced by the average small business, while peril-specific policies are usually purchased when there is high risk of peril in a certain area. Consult your insurance agent or broker about the type of business property insurance best suited for your small business.

There are also other coverages that business should consider not covered here such as Workers Compensation, Employee Liability Coverage, Employee Benefits and of course Health Insurance. Start here to get a quote now.

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How can I make sure I have adequate coverage?

The amount and type of coverage will depend on the type of business, size of exposure and risk. Most business are going to need at least General Liability coverage, as lawsuits for injuries or damages to others due to negligence can come regardless of your nature of business. Some losses may amount to millions of dollars, so most policies come with limits of coverage for 1 or 2 millions. You may obtain less coverage, but prices don't vary as much so it's usually pointless to get less.

The investments you make on items such as merchandise, furniture, business equipment and installations can be covered too, and the amount of coverage depends on the replacement cost of such items. To be adequately covered here, you want to make sure you have an adequate dolalr limit of coverage for all your property, or sever coinsurance penalties apply, even in case of partial losses. For an additional premium you can decrease your risk having a lower settlement by decreasing your coinsurance percentage: the lower the percentage, the better chances of getting the full amount of your claim settlement, since this permits a higher difference between the actual coswt to replace lost items and the actual coverage. For example, say you have a loss in a fire for 100k worth of merchandise, but you only carry 80K in coverage. If you have an 80% coinsurance clause, this basically allows 20% (100-80 = 20) discrepancy between what's actually needed and your insurance amount, without any penalties from the final claim amount. In this case, you would your full 80K because you fell within the coinsurance requirement of 80% and nothing has been deducted. However, if you had a 100% coinsurance clause, you are not allowed for any discrepancies between the actual loss amount and the amount of coverage, therefore you would not receive your 80k in coverage but much less in fact due to the coinsurance penalty this entails.

As explained above, you also want to purchase professional liability (malpractice, errors and ommissions) if you work on the service industry, such as health practicioners, insurance agents, attorneys, etc. Most coverages here fall aroudn the 2 - 5 million limit, although more may be available through the purchase of Umbrella coverage. Ask your agent after you getting your quote here.

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Why has business insurance gotten so expensive lately?

In Florida, and lately across the nation as well, the industry has been seeing record levels of claims activity. This, in simple words means, people are using their insurance more and more. In some cases this is directly related to an increased amount of accidents, but unfortunately, it also has a lot to do with uncontested fraudulent claims, insurance abuse and increased cost of repairing vehicles and medical expenses. In Florida, the industry has not only had to deal with hurricanes and the catastrophes they carry, but also with a near-crisis of excessive costs in attorney's fees, pain clinics and in general out of pattern claim activity never seen before or practically elsewhere in the country. This became specially marked at the beginning of the year 2009 when the economy took a bad turn, and employment went on the rise dramatically, causing insurance rates to peak during 2011.

Insurance is similar to a obtaining a loan that you never have to pay back, and the only way to fund this money loaned to you in case of an emergency is through payment of premiums (the cost of policies) made by all policyholders. When cost to pay claims increase, the cost of insurance increases so companies can remain solvent and profitable. Insurance fraud and abuse is a big problem that all Floridians pay for. It should not be taken lightly, as with the increased cost of paying claims and inflation, they become the largest reason why Florida insurance rates continue to go up so much as of late.

the cost of paying claims and inflation has been going up lately. That being said, even without these factors it is a common misconception to think that insurance rates should go down over time. While it is true that insurance rewards you with lower premiums over time under certain circumstances, the rule is that your insurance will always tend to either go up or stay the same, as its price is based on the correct amount needed to be collected to pay for claims for all policy holders.

That being said, when can you expect insurance to go down? There are many reasons why your cost can decrease or at least be able to obtain better rates, when the risk you are covered for is consider to be less to the company. Examples of this could be: Turning 18, 21, 30, 55 and 65, getting married, obtaining a multi- policy or multi car discount, obtaining a discount for a safety feature or safe behavior, good driving and claims record, good credit and in general anything that constitutes a "better" risk to a company, better understood as lower risk.
Most companies also reward loyalty in one way or another through accident forgiveness or discounts. This can constitute some savings too, and it's one of the main reasons jumping from one company to another every time is seldom recommended.

Insurance price is determined by many factors. It would be accurate to say that the composition structure of the insurance price is probably the most complex of all price compositions in existence. It is made up of many items such as geographical factors, credit, age, claims and accident statistics, behavioral patterns and more. Florida is specially sensitive to high rates due to hurricanes, high levels of litigation, accidents and insurance fraud and abuse. Some areas of Florida (specially rural or less populated areas) are normally less sensitive to these high risk factors, and rate could be much lower. However, South Florida is one of the most expensive areas in the country due to the high incidence of such factors.

Does this mean that you should give up and take high rates? not necessarily. Start here to get a quote now.

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Any useful links?


Yes we do, and we suggest you bookmark this page so you can always return to them when you need them:
-Check the status of your Florida Driver's License here.
-Check vehicle information using the VIN # here.
-Renew your license, registration or change your address with the FL DMV.
-Motor Vehicle & Vessel Registrations, Tags and Titles here.
-Motor Vehicle services and transactions fees here.
-Find a Driver License Office location here.
-Find a Demotech rating for a company
-Find a AM Best rating for a company
-Talk to or contact a Florida Licensed Agent or Agency.
-Lookup an insurance company here.
-Lookup an insurance agent and provider here.
-Report Insurance Fraud and Abuse here.


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DISCLAIMER: This website posts information that you can access freely and at no cost. By no means this information is to be taken as a direct recommendation or advise to you, as each person has different needs and the information included in this website cannot be all encompassing. We assume no liability for misinterpretation or decisions you make with your insurance which may lead to loss, injury or uncovered damages. We are not an insurance company but only an information and referral website, and you should consult with your insurance professional (A.K.A. your agent) before making any decisions about your purchase.

 

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