How to Get Business Interruption Insurance in Florida

Residents of Florida know that the weather there isn't all sunshine and gentle breezes. Every year, windstorms and hurricanes frequent the coast, causing damage both on the shoreline and inland. While running a business in Florida can be a lucrative endeavor, if your business needs to close because of hurricane damage, the revenue loss could bankrupt you. If you get business interruption insurance, however, your losses can be kept to a minimum.

Difficulty: Moderately Easy

Instructions

1. Determine whether the size of your business qualifies you for a Florida Business Owner Insurance Policy (BOP). Companies that employ fewer than 100 people and have an annual net profit of less than 1 million dollars typically will qualify for this policy. Should your business sustain an insured property loss that makes it unable to continue operating, the BOP will provide coverage for up to a year's worth of lost income.

2. Decide whether the scope of a BOP is too inflexible for your business. Because the policy coverage is relatively substantial for such low premiums, your options to add coinsurance are limited. That means you may not be able to add additional coverage for contingencies. Businesses that are at high risk for a specific type of peril--a restaurant, for example, which runs a higher risk of fire damage--may decide that a BOP policy isn't the best option.

3. Check your current policy to see whether your business is covered for windstorm damage. Older insurance policies for businesses located in inland Florida may not carry this coverage. By law, the state-created insurer, Citizens Property Insurance Corporation, can now write windstorm coverage for inland businesses as well as those close to the coast (see Resources below).

4. Get flood insurance in addition to your property and business interruption policies. Flood is an excluded cause of coverage in all business interruption policies, but in Florida the likelihood is very high that disaster-related damage will be due to flood waters. The government-sponsored National Flood Insurance Program's website can put you in touch with an agent in your area (see Resources below).

5. Pay a little extra to get business contingency and extra expense insurance added to your policy. Business contingency will cover the income you will lose if your supplier's (or customer's) business is interrupted due to a covered cause. The extra expense insurance will cover costs above and beyond your normal monthly operating expenses. For example, you could be reimbursed for the cost of leasing a temporary office from which to run your business while your building is being repaired.

Tips & Warnings

• If your business income is from rental units, as it is for many Floridians, consider taking out Renters Loss insurance in addition to your other policies. It will cover the income you would lose if the units are damaged enough as to be uninhabitable.

Resources

• Check Citizen's Property Insurance Corporation for windstorm insurance
• Flood insurance information at the National Flood Insurance Program's website