The state of New Jersey is home to 908,000 small businesses that employ almost 1.8 million New Jersey residents. As a small business owner in the Garden state, you need to protect your business with the right types of insurance. So what does that look like? What is required of you? In this article, we'll talk about the required insurance in New Jersey and additional business insurance policies you should consider to protect your business.
What Insurance is Required in New Jersey?
The New Jersey Department of Labor and Workforce Development requires that all businesses with one or more employees carry workers' compensation insurance. If you don't comply, you can face hefty fees ($5,000 for each 10-day period you don't have coverage). Aside from workers' compensation, New Jersey state law doesn't have any other small business insurance requirements. So what is workers' compensation?
New Jersey Workers' Compensation Insurance
This is a business insurance coverage that is designed to protect you and your employees in the event of a work-related injury or illness. It protects employees injured on the job or employees who become ill from exposure at work. Workers' compensation helps pay their medical expenses (such as physical rehabilitation costs) and lost wages until they're able to return to work. We recommend checking with your local department of insurance to check on all of the legal requirements.
Types of New Jersey Business Insurance Coverage
There are a few other types of business insurance coverages that we recommend for small businesses in New Jersey.
New Jersey General Liability
General liability insurance (also referred to as business liability insurance) isn't legally required in New Jersey but it is insurance that every business needs. Why? Because commercial general liability protection is great for small business owners because of how comprehensive the coverage provided is compared to how much it costs. Commercial liability usually covers:
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Third-party bodily injury liability: This portion of your general liability policy helps pay medical costs if someone is injured on your property (and you are deemed responsible for the accident).
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Third-party property damage liability: If someone's property is damaged while on or around your premises (and not due to a willful act or mistake on the customer's part), your commercial general liability carrier will pay to repair or replace the damaged item(s).
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Personal and advertising injury: This portion of your general liability will protect you if you're accused of slander, copyright infringement, or libel. Your insurance company will provide you with a legal defense and cover court costs and other expenses if a client sues you.
Chat with an agent to see how affordable general liability insurance could be for your business!
New Jersey Commercial Property Insurance
Commercial property insurance (or business property insurance) is recommended—and sometimes required by a leaseholder or lender—for any business that rents, leases, or owners a physical location for their business.
Property insurance coverage protects your office building from covered perils including damage by vandalism, theft, fire, and storms. It also protects the contents of your building, which can include your furniture, inventory, equipment, as well as business personal property.
Most insurance companies exclude damage caused by flooding. If your business is in a flood zone, you may want to consider a separate insurance policy, otherwise, you'll have to pay for the repairs out of your own pocket.
Home-Based Business Insurance
If you operate a home-based business, your homeowner's insurance or renter's insurance may not cover much if any of your business equipment and inventory. If your policy does cover damage, most homeowner's policies cap coverage at a certain dollar amount.
Plus, if you have clients coming to your home office, any accidents or injuries that occur may be excluded from coverage. You should check with your insurance agent to see what your coverage is—you want to make sure your hard-earned money is properly insured. If it isn't enough to protect your inventory and equipment, speak with them about getting home-based business insurance.
New Jersey Business Owners’ Policy
A business owners' policy (BOP) is a bundle of different coverage options that insurance carriers usually offer to small businesses. Even better, a business owners' policy is often cheaper than purchasing each insurance option separately. A standard BOP will include commercial property insurance, general liability insurance, and business interruption insurance.
Insurance companies may include other options in a business owner's policy that covers risks unique to your industry. That's why it's best to work with an experienced insurance agent in your industry to get customized coverage for your small business. Want to find out if your business qualifies? Chat with one of our specialists today!
Business Interruption Insurance
How does business interruption insurance, sometimes known as business income insurance, work? If your physical property is damaged by a fire and you can't operate, this policy helps protect you from financial loss. This valuable business interruption coverage can cover payroll for your employees, paying your lease, and will sometimes reimburse a portion of your lost profits.
Commercial Auto Insurance
Commercial auto insurance is required if you use personal autos for business purposes or you lease/own vehicles solely for business use. Commercial auto insurance can be written to cover (or include coverage for) third-party bodily injury & property damage, personal injury protection, comprehensive coverage, collision coverage, and uninsured and underinsured motorist coverage.
Drivers in the Garden state include must carry a minimum of $30,000 of auto coverage to pay for claims if someone is injured in an accident occurs. The policy must also include $15,000 in coverage for any property damage incurred.
What if you have a personal auto policy? Check with your agent, an accident while working may be excluded from commercial auto coverage.
Professional Liability Insurance
Professional liability insurance—a term used interchangeably with errors and omissions insurance—protects businesses if they're accused of things like:
- Negligence
- Missing deadlines
- Professional errors
- Incomplete work
- Libel or slander (similar to a general liability policy)
Professional liability coverage will pay defense costs for legal claims, medical care, and other legal expenses (like court costs) that may arise if you're held liable. A professional liability policy is usually recommended for architects, healthcare professionals, lawyers, or anyone that offers professional services.
Data Breach Insurance
Data breach insurance, also known as cyber insurance—or cyber liability insurance—protects your business if your data is breached or you're the subject of a cyberattack. If any customer information is compromised, whatever insurer that holds your cyber liability policy will pay to notify impacted customers and will also cover the cost of credit monitoring for them. Some will help cover the cost to repair your reputation if necessary.
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) will protect you if you're accused of wrongful acts (i.e. discrimination, wrongful termination, sexual harassment, etc.). EPLI will provide you with a legal defense if you're sued and cover legal costs and settlements.
How Much Does New Jersey Business Insurance Cost?
New Jersey businesses have affordable insurance options available! The cost of general liability insurance coverage for a New Jersey small business can start as low as $29 a month (often for between $500,000 and $1 million in coverage). However, you'll likely pay slightly higher insurance rates. Why? Because these factors impact premium costs:
- The industry your business is in (and how "risky" it's considered)
- Where your business is located (i.e. if it's a "high crime" area)
- The length of time you've been in business is factored in
- Whether or not you have an extensive claims history is considered
- The deductibles and policy limits you choose can raise/lower premiums
- The number of employees you hire (and their roles) will dictate workers' comp costs
These are just a few of the things an insurance agent will consider when assessing a small business's insurance needs. Be prepared to answer more questions to get the best price possible for your coverage needs!
Get a Free Quote for New Jersey Small Business Insurance
We understand how difficult it can be to find the best commercial insurance for small and medium-sized businesses. Whether you are an electrician in Newark, a contractor in Jersey City, or a plumber in Elizabeth, we can help you get tailored coverage.
Our goal at Tivly is to help you get the best coverage at an affordable price. The process is fast and easy! Complete the form at the top of the page and someone will reach out to you. Or, give us a call at 877-907-5267.
New Jersey Small Businesses Commonly Insured
Some professions that are commonly insured in New Jersey include:
- Lawn care businesses
- Accountants
- Real estate agents
- Contractors
- Consultants
- Food trucks
- Cleaning services
- Restaurants
- Dry cleaners
- Personal trainers
- Manufacturers
Reviewed By: Sarah Reid, Licensed Agent
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