Starting a Business in Florida: Insurance by License Type

Florida doesn’t have one insurance requirement for new businesses. It has a different answer for almost every license, and the license is the right place to start. For some licenses, the state won’t issue it until proof of insurance is on file. For others, the license itself asks for nothing, but the landlord, the broker or the first client will ask for a certificate before any work begins, and the business that waits until that moment usually loses time, money or the contract.

This guide goes through the licenses Florida business owners most often get first, what each one requires, and what usually comes up right after, with links to our detailed articles for each type of business.

The Local Business Tax Receipt

Almost every Florida business needs a local business tax receipt from its county, and often from its city too. Many people still call it an occupational license, and that’s what they search for. The receipt itself rarely requires insurance. But it’s usually the first step in a chain of requirements that do: the landlord who wants a certificate before handing over the keys, the client who wants to be named as additional insured, and in some trades, the city or county that wants proof of coverage before issuing the receipt. A new business should have general liability in place before it signs a lease or a client contract, not after. Our guide to choosing the right business insurance for a Florida startup covers the basics.

A Contractor License

Construction is where insurance and licensing are most tightly linked. Florida’s Construction Industry Licensing Board requires proof of general liability coverage and proof of workers’ compensation, or an exemption, before it issues a certified or registered contractor license. Workers’ compensation is required in construction from the first employee, not the fourth, and an exemption covers only the owners named on it. Our article on what insurance you need to get a contractor license in Florida goes through each step, and our article on getting bonded as a new contractor covers bonds.

A Class B Security Agency License

Florida requires security agencies to carry general liability coverage as a condition of the Class B agency license, so the insurance has to be bound before the license application can be completed. New agencies also find that clients ask for much more than the state minimum, and that assault and battery coverage is often excluded or sublimited unless it’s requested. Our articles on security guard company insurance, licensing and contracts and the biggest mistakes new security guard business owners make explain what carriers look for.

Your Own Trucking Authority

A new motor carrier can’t activate its operating authority until its insurance company files proof of liability coverage with the Federal Motor Carrier Safety Administration. That filing has to come from a carrier willing to write a new venture, which narrows the market in the first year. Cargo, physical damage and, for owner-operators leased to someone else, non-trucking liability or bobtail coverage follow close behind. Our article on starting a trucking company in Florida covers the first year in detail.

A Real Estate License

Florida doesn’t require real estate agents to carry errors and omissions insurance by law, but many brokerages require their agents to have it or provide it through a group policy. An agent who opens their own brokerage, or starts managing rentals for clients, takes on more exposure and usually needs a policy of their own. Agents who own investment property should also make sure those properties are insured as rentals, not as homes. Our articles on property manager insurance and real estate investors cover those situations.

A Liquor License

The state doesn’t require insurance to issue a liquor license, but a business that sells alcohol needs liquor liability coverage, because general liability excludes alcohol-related claims for anyone in the business of selling it. Landlords almost always require it, and buying an existing license means the coverage has to be in place on the day of closing. Our guides to liquor store insurance and liquor liability for restaurants and bars explain the coverage.

Healthcare and Childcare Licenses

Florida requires physicians to show financial responsibility for malpractice claims, usually through insurance, and many healthcare and childcare licenses, contracts with insurers and agency relationships come with their own coverage requirements. A new practice, therapy provider, home health agency or daycare usually needs professional liability, general liability and, in many cases, abuse and molestation coverage before it sees its first patient or child. Our insurance checklist for opening a medical practice is a good starting point.

Moving Companies

Florida requires intrastate moving companies to register with the Department of Agriculture and Consumer Services and to carry insurance or a bond as part of that registration. Movers also need commercial auto, cargo coverage for customers’ belongings and workers’ compensation for their crews. Our moving company insurance page explains the coverage.

The Requirements That Apply to Almost Everyone

Two rules reach nearly every new Florida business, whatever the license. The first is workers’ compensation: required once most businesses reach four employees, counting part-time workers, and from the first employee in construction. The second is the vehicle: a car or truck titled to the business, or driven by employees for work, generally belongs on a commercial auto policy, and employees using their own cars for errands create an exposure that hired and non-owned auto coverage addresses. Our articles on how much workers’ compensation costs and whether you need commercial auto insurance explain both.

Forming an LLC or corporation protects personal assets in some situations, but it doesn’t replace insurance. A lawsuit against the business still has to be paid by the business, and the business’s own assets, contracts and license are what’s at stake.

Before You Open

Starting a Business in Florida With Prestige

Prestige Insurance Group works with new businesses across Florida, from first-time contractors and security agencies to new motor carriers, real estate professionals, healthcare providers and small retailers. We work with over 100 MGAs and specialty markets, including markets that write new ventures with no prior insurance history. Tell us which license you’re applying for and what your lease or first contract requires, and we’ll tell you what you need and in what order. Call the office nearest you.

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General information only, not legal advice. Policy forms and exclusions vary; refer to your policy and your leases for the terms that apply to your property.