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Liability Coverage Protects a business from loss as a result of injuries, deaths or property damage caused by a business’s operations, employees or products. Two types:

“Premises and operations” coverage pays when a business is legally responsible for an injury claim, if, for example, someone slips and falls on company property.

“Products and completed operations” coverage, commonly called “product liability,” helps pay for monetary losses that result from injury or damage caused by a company’s product. One type of liability coverage required in Florida is commercial automobile insurance to cover vehicles owned by the company or personal vehicles operated by the company’s employees while on the job.

Property Insurance Protects the value of physical assets. “Replacement cost” coverage pays to replace or rebuild buildings and other property, as long as the property is insured for replacement value.

Windstorm Type of construction, size of structure, proximity to water and location determine the cost and availability of windstorm insurance available through private insurers or through Citizens Property Insurance Corp., the state-created insurance provider.

Flood Property insurance does not cover damage from floodwaters, whether from rivers, bays or offshore water from the Gulf of Mexico, Atlantic Ocean or other bodies of water. Through the National Flood Insurance Program, managed by the federal government, a small business’s building and contents each can be insured for up to $500,000.

Workers’ Compensation Florida law requires employers that have four or more employees, either full-time or part-time, to have workers’ compensation coverage for their employees. Sole proprietors and partners are not considered employees. Unless exempt, corporate officers are included in the definition of “employee.” (Employers in construction and agriculture are subject to different requirements.)

Business Interruption When a business must close because of an insured property loss, a business interruption policy, called “business income insurance,” pays ongoing expenses such as rent, utilities and some or all payroll expenses.

“Extra expense insurance,” another type of business interruption coverage, reimburses for special expenses that help a business minimize losses by getting up and running. For example, if a business can restart operations in a week, rather than a month, by paying a surcharge to ship replacement equipment by air express, the extra expense insurance would cover the air express charge. Since most business interruptions occur in the first 30 days after a disaster, it is important to get a policy that kicks in within a few days of the event.

Directors’ & Officers’ Liability When employees, shareholders, government agencies and others allege that the company has suffered financial losses due to company mismanagement, the response is often to sue directors and officers. This coverage protects both the company and individual executives.

Key Man When one or two individuals are vital to a business’ success, it’s important to have key-man insurance. The insurance protects the business in case of the death of the essential individual. The company buys and pays for a key-man policy — similar to a life insurance policy — on a specific individual, and the death benefit goes to the company rather than to the individual’s family.


Florida Department of Financial Services
Insurance Publications www.myfloridacfo.com/division/consumers/understandingcoverage. Click links to “insurance library” and “consumer guides” for answers to specific questions and access to:

Small-Business Owner’s Insurance: A Guide for Consumers

Health Insurance: A Guide for Consumers

Natural Disasters: Your Guide to Insurance and Financial Preparation in the
Event of a Natural Disaster

SBDC Business Continuity and Risk Management (BCRM)Program
(850) 473-7820

National Flood Insurance Program Region IV Contact:
(770) 220-5200

Citizens Property Insurance Corp.
(888) 685-1555

Florida Market Assistance Plan (FMAP)
(800) 524-9023

Florida Department of Financial Services, Workers’ Compensation
(850) 413-1609

Florida Workers’ Compensation Joint Underwriting Association Inc.
(941) 378-7400

Florida Agency for Health Care Administration
(888) 419-3456