Do contractors need insurance in Florida?

If you’re a contractor in Florida, you may be wondering what types of insurance you need in order to remain compliant with Florida’s laws and to make sure your business is fully insured. Let’s explore the types of insurance that you’re required to have and the types of insurance you should consider.

Types of Insurance Required for Contractors in Florida

Regardless of the type of contracting business you have, Florida law requires workers compensation and commercial car insurance, if you have employees and vehicles.

Workers Compensation

Construction companies must have a current workers compensation insurance policy if they have one or more employees including any non-exempt owners or officers of the entity. This requirement is different than other types of businesses because non-contractor businesses only need a workers comp policy if they employ four or more people including any non-exempt owners of officers of the entity. Workers compensation helps pay for the medical treatment for your employees if they get hurt on the job or as a result of the job. It also helps pay a portion of their missed wages while they are recovering and unable to work.

Commercial Car Insurance

If you use vehicles to get to and from job sites or as part of your business, you’ll need to have a good commercial car insurance policy. The minimum amount of coverage required by Florida is liability insurance, also referred to as PIP (Personal Injury Protection) and PDL (Property Damage Liability).

PIP is designed to cover 80 percent of the other driver’s and their passengers’ injuries. The minimum amount of coverage available is $10,000. Property damage liability covers the repairs and/or replacement of the other driver’s vehicle. The minimum amount of coverage is $10,000. It’s important to note that these amounts are the minimums. You may want to consider purchasing more insurance depending on your risk tolerance and ability, the type of vehicle you drive and its gross vehicle weight.

Additionally, if you are paying on a loan for your commercial vehicles, your lender may require that you have additional coverages, including collision and comprehensive. If you regularly tow trailers, consult your independent insurance agent to ensure they are properly covered.

Additional Types of Business Insurance That You May Need

When it comes to ensuring that you have the right amount of insurance for your business, you’ll need to check with your lenders, clients and the specific counties, cities and jurisdictions where you work. Each of these entities may have different insurance requirements.

For example, if you’re paying on loans that you took out to build your business’ commercial location, your bank may require that you have those buildings insured against certain losses. If you’re working on a high-dollar project for a client, they may require that you have a surety bond.

Business Owners Policy (BOP)

Many general contractors choose to purchase a business owners policy or BOP. These insurance products contain three types of coverage, including business property insurance, general liability insurance and business income insurance.

  • Business Property Insurance – business property insurance is sometimes referred to as commercial property insurance. This is the insurance that protects your commercial buildings and / or your business personal property. It works similarly to a homeowners insurance policy in that it can protect your building and its contents against certain types of covered losses, like fires, theft and vandalism. It may also cover your building for wind damage and lightning strikes. If your building isn’t paid off or if you’re renting the commercial building, the lender or landlord may require this type of policy.
  • General Liability Insurance – General liability insurance helps pay for certain types of lawsuits as well as damages to your customers, clients or competitors.
  • Business Income Insurance – You may hear business income insurance referred to as business interruption insurance. This insurance policy is designed to provide you with some income if you cannot operate your business due to a covered loss. This type of coverage can be the piece of insurance that gets you through a large loss when your business needs income to keep afloat while damages are being repaired. 

Professional Liability and Cyber Insurance

Along with these three primary types of insurance, you can also purchase professional liability insurance and cyber insurance. Both of these types of insurance are highly recommended by most Florida insurance agents, including our agents at Fearnow.

Professional Liability Insurance

Professional liability insurance helps protect you against mistakes or claims of errors by your clients. This includes negligence, misrepresenting your business or what you can do, providing inaccurate or harmful advice and causing personal injuries.

Cyber Insurance

If any part of your business is online or you collect personally identifiable information (PII) , you’ll want to have a cyber insurance policy. This is because you, your employees and your customers’ information could be compromised by criminals. This includes if you take payments via credit or debit cards, store your contracts online and if you pay your employees via direct deposit because you have their financial information. The cyber insurance policy is ever evolving. Consult your independent insurance agent to ensure you are properly covered.

Contractors Business Insurance in Florida from Fearnow

Fearnow can help you find the right contractors insurance for your business needs. We do this by examining the specific risks that you face and listening as you explain the types of commercial insurance you are interested in obtaining in order to legally provide services in Florida. We can help you find BOP policies, commercial package policies, workers compensation, professional liability insurance, commercial vehicle insurance, builders risk insurance and property and equipment insurance.

To learn more about our contractors business insurance and to get a quote, call us at 813-689-8878.