Business Insurance and Disaster Recovery in Florida

Living and working in Florida has its perks, but it also means dealing with the potential of natural disasters. Effective disaster recovery planning and having the right business insurance coverage in place can make all the difference.

Watch to learn how a well-crafted plan coupled with business interruption coverage can minimize losses during the time that your company is closed.

Property Insurance

Your business property insurance covers items like furniture, inventory and equipment against loss from fire, wind and other perils. Your broker-agent will compare limits, exposure bases, business classifications, exclusions and deductibles to determine your best options for commercial coverage.

In addition to your standard property insurance, you may need business interruption and extra expense coverage. This typically covers lost income and continuing normal operating expenses such as payroll during the period that it takes to repair or replace your physical property after a disaster.

This insurance is normally included as part of a business owner’s policy (BOP) or commercial package policy. It can also be purchased as stand-alone property coverage. A BOP is most appropriate for small, “main street” businesses such as hardware stores, barbershops or greeting card shops and usually combines business property insurance with general liability and commercial auto insurance. This combination is called a commercial package policy because it offers a bundle of coverage for a competitive premium.

Business Interruption Insurance

Business interruption insurance (BI) is an add-on to your property/casualty policy that covers the income your business loses as a result of the damage or destruction of your covered property. BI coverage can help you cover the costs of operating expenses, payroll, commissions and training if you need to move operations or close your doors for any reason.

Most policies have a restoration period that determines when the insurance will begin paying for loss of income, which can be as short as 48 to 72 hours. The period of restoration begins when your business experiences physical damage and ends when your business can resume at the restored location.

Unlike flood and earthquake insurance, which require separate policies, business interruption generally covers losses caused by COVID-19 and other non-physical damage to your business. Your insurance professional can help you review your coverages to ensure that all aspects of your business are protected in the event of a disaster.

Business Owners Policy (BOP)

A business owners policy is an insurance bundle designed with small businesses in mind. A BOP combines several different types of coverage into one package that typically includes commercial property, business interruption and liability protection.

The commercial property coverage in a BOP protects against damages to physical assets that your business owns or rents, including things like furniture, inventory and equipment. It also helps pay for repairing or replacing items that have been lost due to a covered disaster.

The business interruption portion of a BOP covers lost income that you might suffer as a result of damage to your property. It also pays for additional expenses related to operating out of a temporary location.

Liability protection in a BOP can help defend your business against lawsuits from third parties that claim you or your employees have injured them. It can also cover legal costs that may arise from slander or libel, among other things.

Liability Insurance

Few things are riskier than starting a business, so it’s important to protect your company from financial disaster. With the right insurance, you can save yourself from costly damages and lawsuits. Business insurance is a collection of coverages that can be tailored to fit your specific needs.

For example, workers’ compensation will help pay for medical bills and lost wages if an employee is injured while working. Commercial property and business interruption insurance will cover the cost of rebuilding or relocating your company after a disaster.

Other coverages include directors and officers (D&O) liability, which helps protect executives from legal judgments and costs resulting from wrongful acts such as mismanagement, erroneous investment decisions, failure to maintain company property and releasing confidential information. Insurance companies evaluate businesses for risk based on numerous factors, including industry and state laws. They then assign a risk rating, select a policy deductible and premium, and underwrite the risk. A combination policy, such as a BOP, may combine property, general liability and business interruption insurance in one convenient policy.