Insurance 1-2-3: Essential Orlando Business Insurance Coverages
Insurance coverage might not be the first thing you think about as an entrepreneur, but it is one of the most important business strategies you will ever encounter. Just as a strong business plan and mission statement can help keep your business focused and on track, the right risk management strategy can help protect Orlando businesses from the various hazards they may encounter along the road to success.
The sad truth is that most small businesses fail not for lack of effort, but for lack of proper planning and experiences. According to the U.S. Small Business Administration, only about half of all small business start-ups survive the first five years or more and roughly one-third survive 10 years or more. Poor financial planning and management are two of the largest factors in business failure. There is a lot that can go wrong for a small business and many business owners are financially and tactically ill-equipped to navigate unexpected challenges as they emerge.
That’s where a strong business insurance portfolio comes in to play. The essential function of business insurance is to help protect Orlando companies from various risk exposures they may encounter. For insurance purposes, a risk exposure can be described as the quantified potential for financial loss that might occur as the result of a business activity or related event. It takes into account both the likelihood and the consequences of a specific action, to help measure the potential negative impact.
Any endeavor is accompanied by risk; some are simply more dangerous than others. Even the smallest of business functions have some risk involved. For example, even hiring a new employee comes with a certain set of risks to which a business is now subject. The new addition brings a slightly greater likelihood of a workplace injury and other concerns, which could cause challenges for the employer. It is also important to note that not all risk exposures are in the business owner’s control, many outside factors can dramatically affect a business, such as weather and natural disasters.
There are a few basic commercial insurance coverage options that every Central Florida business should acquire to mitigate the risks of business operation.
Workers Compensation
Workers compensation coverage is designed to help protect businesses from the financial consequences of workplace injuries. Workplace accidents account for thousands of injuries and fatalities a year and can have devastating effect for small businesses. One small accident can result in medical expenses, legal fees and a host of other complications which can put small businesses in financial ruin without the proper protection. According to Florida state law, all businesses with four or more employees, full-time or part-time, are required to carry workers compensation insurance. Corporate officers do count as employees unless specifically exempt under the owner exemption policies. Additionally, all construction operations must carry workers compensation unless the business owners have exemptions and there are no additional employees.
General Liability Insurance
General Liability insurance is designed to protect business owners from the financial impact of legal complications. Lawsuits have become so commonplace in American that businesses can be held accountable for everything from bodily injury and property damage to allegations of defamation and false advertising. These policies typically protect against settlements, judgments, defense and other fees amassed as a result of a legal complaint.
Commercial Property Coverage
In order to protect business property from damages, theft, breakdown and a host of other threats, businesses should acquire a commercial property policy designed specifically to fit the nuances of their business. Property insurance covers everything related to the loss and damage of a company’s property due to a wide-variety of events such as fire, wind, storms, and even vandalism. Depending on how a policy is written, the definition of property can be pretty broadened to incorporate buildings, electronics, documents, even cyber data and more. There are a wide variety of property inclusions such as commercial auto and equipment breakdown coverage that are available to ensure that all of your businesses physical assets are properly accounted for in any situation.
Professional Liability
Also known as errors and omissions insurance, professional liability coverage is designed to protect professionals from risk exposures that may arise through the performance of their regular job functions. Allegations of malpractice, professional error, and negligence are increasingly common, especially in service related industries and can be extremely costly. This coverage is particularly relevant to consultant, freelance, and contracting operations that offer specialty professional expertise and services.
Understanding all the risks you and your business face can be overwhelming and finding the right protection takes intimate knowledge of the risks you face. Most small businesses don’t have the expertise to fully evaluate these risks on their own. Working with a local Orlando insurance agency to better understand the exposures faced by your specific industry can be a huge advantage for any small business. For help planning or improving your risk management strategy, give us a call today at (407) 859-3691.