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Business insurance is a must-have for any New Jersey-based business, and it's not just a matter of checking a box on a to-do list. There are several types of business insurance to consider, including liability insurance, property insurance, and workers' compensation insurance.
Liability insurance, also known as errors and omissions insurance, protects businesses from lawsuits and financial losses resulting from customer injuries or property damage. In New Jersey, businesses are required to carry workers' compensation insurance to cover employee injuries on the job.
In New Jersey, businesses can choose from a range of insurance providers, including State Farm, Allstate, and Liberty Mutual. These providers offer customized insurance policies to meet the unique needs of each business.
Business Insurance Requirements
In New Jersey, businesses with employees are required to have workers' compensation insurance, which can help protect employees who are injured on the job. This is a mandatory requirement for any business with one employee.
Commercial auto insurance is also required for businesses in New Jersey, and it must include personal injury protection (PIP) coverage. This is in addition to the minimum liability requirement.
The following types of insurance are mandatory for businesses in New Jersey: Workers’ Compensation InsuranceCommercial Auto InsuranceDisability Insurance While these types of insurance are legally required, it's essential to evaluate your specific business needs and consider additional coverage to protect against other risks and liabilities.
What is Required?
In New Jersey, certain types of insurance are mandatory for businesses. Workers' compensation insurance is required for any business with one employee, and can result in fines or even criminal charges if you're found to be uninsured.
Commercial auto insurance is also required in New Jersey, and must include personal injury protection (PIP) coverage.
Some businesses may also need professional liability insurance, which protects against claims of negligence, errors, or omissions that may arise from professional activities.
Here are the main types of insurance required for businesses in New Jersey:
- Workers' Compensation Insurance
- Commercial Auto Insurance
- Disability Insurance
If you don't comply with these insurance requirements, you could face significant financial losses or even bankruptcy. It's essential to evaluate your specific business needs and consider additional coverage to protect against other risks and liabilities.
Professional
Professional liability insurance is a type of coverage that protects businesses from claims of negligence, errors, or omissions related to their professional activities. It's essential for businesses that provide professional services or advice.
Professional liability insurance, also known as errors and omissions insurance, is crucial for businesses that offer professional services. This type of insurance protects against claims of negligence, errors, or omissions that may arise from your professional activities.
Professional liability insurance will pay defense costs for legal claims, medical care, and other legal expenses that may arise if you're held liable. This includes costs like court costs, medical care, and other legal expenses.
Some common reasons for professional liability claims include negligence, missing deadlines, professional errors, incomplete work, and libel or slander. These claims can arise from giving advice or adhering to a contract.
Here are some examples of businesses that may require professional liability insurance:
- Architects
- Healthcare professionals
- Lawyers
If you're looking for a business insurance agency that understands the needs of New Jersey businesses, consider partnering with an agency that has strong partnerships with insurers and a deep understanding of local insurance requirements.
The Main Types
In New Jersey, small businesses have several types of insurance to consider.
General liability insurance is a crucial coverage for small businesses, providing protection against various risks and uncertainties. It's recommended for businesses in New Jersey, and can be quite affordable.
Professional liability, also known as errors and omissions insurance, protects professionals against legal defense costs from mistakes, missed deadlines, and oversights. It's essential for businesses in the service industry, where professional negligence lawsuits are common.
Commercial property insurance is first-party coverage for property owned, typically fixed property, or contents. This type of insurance is vital for businesses that own physical assets, and can provide financial protection in the event of damage or loss.
Business Owner's Policy (BOP) is a combination of general liability, commercial property, and usually business lost income. This policy provides comprehensive coverage for small businesses and can help protect against various risks.
Inland Marine insurance is first-party coverage for tools and equipment. This type of insurance is essential for businesses that own equipment or tools, and can provide financial protection in the event of loss or damage.
Cyber liability insurance is a vital coverage for businesses that sell online or store customer data in the cloud. It provides first- and third-party coverage for losses related to data breaches, hacking, or other cyber-related losses.
Here are some of the key types of small business insurance in New Jersey:
These are just a few of the main types of small business insurance in New Jersey. Each type of insurance provides specific coverage and protection for businesses, and can help mitigate the risks associated with running a small business.
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.
Most homeowner's policies cap coverage at a certain dollar amount, so it's essential to check your policy details.
You should check with your insurance agent to see what your coverage is, and make sure your hard-earned money is properly insured.
Any accidents or injuries that occur when clients come to your home office may be excluded from coverage, leaving you vulnerable to financial losses.
Liability Insurance
Liability insurance is a must-have for businesses in New Jersey. You need it to protect yourself and your business from lawsuits and financial losses.
In New Jersey, the minimum liability insurance requirement for commercial trucks is $1.5 million, nearly double the federal requirement. This law went into effect in 2024.
If you're in a risky industry or bidding on a project, you may need an umbrella insurance policy, which provides excess liability coverage beyond your regular policy limits. This can help you comply with requests for higher limits.
Here are some examples of situations where you might need liability insurance:
- Personal injury lawsuits
- Auto accident lawsuits
- Workplace injury lawsuits
Employment Practices
Employment Practices Liability Insurance is a must-have for businesses, protecting you from accusations of wrongful acts like discrimination, wrongful termination, and sexual harassment. EPLI provides a legal defense and covers costs and settlements.
In New Jersey, the law against discrimination (LAD) is broader than federal law, covering age discrimination starting at 18, whereas federal law doesn't kick in until age 40. This means businesses with one employee in NJ are already subject to LAD, whereas federal law doesn't apply until a business has 15 employees.
EPLI will protect your business from allegations of discrimination, including during the hiring and firing process. This type of insurance is essential for businesses in NJ to avoid costly lawsuits and reputational damage.
Umbrella
Umbrella insurance is a type of excess liability policy that kicks in when you exceed the limits of your regular policy. This can be especially important for businesses in risky industries.
If you're bidding on a project and your current liability limit isn't high enough, an umbrella insurance policy can provide the extra coverage you need. For example, if you're working on a project in Trenton, NJ, and your current limit isn't sufficient.
Here are some scenarios where umbrella insurance can be particularly helpful:
- Personal injury lawsuits
- Auto accident lawsuits
- Workplace injury lawsuits
An umbrella insurance policy can help your business comply with requests for higher limits, which is especially important in situations where you're at risk of exceeding your regular policy's limits.
Fidelity Bonds
Fidelity bonds are a type of insurance that protects your business from financial loss due to employee theft. This can be a major concern for businesses that handle cash or valuable assets.
A fidelity bond reimburses your clients in the event of employee theft, which can be a huge relief for both you and your clients. This can be especially important if your clients require you to secure a bond before they will work with your business.
Common types of employee theft that fidelity bonds cover include illegal electronic funds transfer, forged signatures, and theft of cash or property. These are all serious issues that can have significant financial consequences.
If you're considering getting a fidelity bond for your business, here are some key things to keep in mind:
- Illegal electronic funds transfer
- Forged signatures
- Theft of cash or property
Trucking Requirements
In 2024, New Jersey became the first state to require a minimum of $1.5 million in liability insurance for commercial motor vehicles (CMVs) to operate in the state.
This new law nearly doubles the federal requirement for commercial trucks, making New Jersey a leader in ensuring public safety on its roads.
Many trucking companies already carry high levels of liability insurance, but this new law sets a higher standard for the industry.
Operating a CMV without sufficient liability insurance can result in significant fines and penalties, not to mention the risk of accidents and injuries.
Your Matters
As a business owner, you don't want to think about coverage options or whether you can afford your premium this month. Owning a business in New Jersey can be stressful, but you require secure and reliable insurance coverage to protect your business.
LG Insurance Agency offers peace of mind through the good and bad days, providing insurance policies that work for you.
Frequently Asked Questions
How much does a $1 million dollar business insurance policy cost?
A $1 million business insurance policy typically costs around $69 per month or $824 per year, but costs may vary depending on your business specifics.
What is the best insurance for a small business?
For small businesses, a Businessowners Policy (BOP) is often the best option, as it bundles essential coverages like liability and property insurance into one convenient policy. However, some businesses may also need Workers' Compensation Insurance, depending on their state's requirements.
What kind of insurance does an LLC need?
LLCs typically need general liability insurance to comply with laws and contracts, and may also require additional coverage depending on their specific business needs
Does a small business in NJ have to offer health insurance?
In New Jersey, small businesses with full-time employees who work at least 30 hours per week are not required to offer health insurance, but may choose to do so if they meet certain requirements. However, if they decide to offer health insurance, they must comply with specific regulations.
How much does an LLC insurance cost?
The average cost of an LLC insurance policy in the USA is around $57 per month or $684 per year, but costs can vary depending on factors such as industry, location, and coverage limits. For a more accurate quote, consider consulting with an insurance professional to discuss your specific business needs.
Sources
- https://tivly.com/new-jersey-commercial-insurance
- https://alevinegroup.com/business-insurance/
- https://ekinsurance.com/small-business/small-business-insurance-in-new-jersey/
- https://fitsmallbusiness.com/nj-small-business-insurance-guide/
- https://www.techinsurance.com/small-business-insurance/states/new-jersey
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