Which Type of Insurance Is Right for Your New Jersey Business?

If you own a business in New Jersey, insurance is a legal requirement. However, which type of New Jersey business insurance are you legally required to carry? Your insurance options vary, and not every business is required to carry the same type of insurance.

To help minimize some confusion and ensure you’re meeting the state’s legal requirements, here’s a look at your various insurance options for New Jersey businesses.


Insurance Options for New Jersey Businesses

Insurance Options for New Jersey Businesses

Before diving into your insurance options, it’s a good idea to know New Jersey's legal requirements for businesses. For example, all businesses in New Jersey must carry workers’ compensation. While this only applies to businesses with paid employees, it’s tough to find a company without at least one individual on the payroll.

If you have company vehicles, you’ll need commercial auto insurance. Businesses operating in New Jersey must also carry liability insurance.

General Liability Insurance

General liability insurance (GLI) is a state requirement—also referred to as business or commercial general liability insurance, the policy protects your company from bodily injury, property damage, reputational harm, and marketing errors. An example of a marketing error is an accidental copyright infringement.

Carrying this type of insurance protects your business against lawsuits. Before you take on a GLI policy, make sure it also covers property damage to vehicles your business rents out. Even though not every business rents their vehicles, it’s still a good idea to have the coverage.

Workers Compensation Insurance

Workers compensation insurance is for both you and your employees. Regardless if you have a large corporation or a small business, the last thing you want is to pay your employee’s medical expenses if they’re injured at work.

Workers compensation coverage is also a New Jersey state requirement, and failing to carry the coverage can result in hefty fines. These fines can start at $5,000 for the first ten days your employees are not insured.

From there, the fines can continue to be assessed at $5,000 every ten days. Before long, your company can be drowning in non-compliance fines. You may even be risking your rights to operate a business in New Jersey.

So, what does workers’ compensation cover? Business insurance policies typically cover:

  • Medical treatment
  • Lost wages
  • Rehabilitation
  • Disability benefits

Your business is also covered if the injured employee or their family sues your business. The insurance covers any settlement costs, along with legal fees.

Commercial Auto Insurance

If your business doesn’t have commercial vehicles, you can skip this section. Commercial auto insurance only applies to companies that use vehicles in their business operations—think of courier and delivery services. This also applies to restaurants like pizzerias that deliver fresh, hot food to their customers.

Basically, if an employee is using a vehicle for company business, you need to have commercial auto insurance – yes, it’s a New Jersey state requirement.

What does commercial auto insurance cover? The policy covers any accident that occurs involving a company vehicle, whether the employee is the no-fault or at-fault driver. If your employee accidentally hits a pedestrian, your insurance covers the associated medical expenses. The policy can also cover vehicle repairs and replacements.

Like most other types of business insurance, it’s always a good idea to compare rates before choosing a policy. You can keep rates down by limiting vehicle access to only select employees with great driving records.

Don’t forget, just because you’re carrying commercial auto insurance doesn’t mean you’re all set—your employees still need to be licensed. You may also be able to get a lower insurance rate if employees with vehicle access are also carrying their own auto insurance policies.

Professional Liability Insurance

You’re not legally required to carry professional liability insurance in New Jersey, but it’s still a good idea to have it in place. This type of insurance protects your business from lawsuits stemming from the following:

  • Negligence
  • Misrepresentation
  • Professional services errors
  • Inaccurate advice
  • Libel or slander

Any customer can file a lawsuit against your business if they believe your negligence resulted in a financial loss. With professional liability insurance, everything is covered, from a potential settlement to your defense costs.

Business Owner’s Policy

You can combine business liability and commercial property insurance into a single policy. Known as a business owner’s policy (BOP), it can be a cost-effective way to protect your business from theft, fire, and other claims. Think of BOP as combination insurance coverage.

The policy also provides financial protection against property damage and bodily injury claims. Best of all, you can add other types of insurance coverage to a business owner’s policy. In essence, you can tailor the policy to meet your business’s unique coverage needs.

Data Breach Insurance

Is your business dealing with personal health information (PHI) or personally identifiable information (PII)? If so, cybersecurity should be a paramount concern. Along with industry compliance regulations regarding the use and storage of personal data, you also need to worry about reputational damage if a security breach occurs.

  • Fines, penalties, and potential consumer lawsuits can quickly become expensive.
  • If personal information is lost or stolen in a security breach. The insurance kicks in to help mitigate any damage. This includes,
  • Notifying the affected customers and/or clients
  • Hiring a public relations firm to repair brand trust
  • Provide free credit monitoring to the affected customers

Like other types of business insurance plans, you can tailor this one to meet your company’s specific needs.


What Affects New Jersey Business Insurance Costs

What Affects New Jersey Business Insurance Costs

A few factors affect business insurance costs for New Jersey companies. One factor is the insurance provider. Insurance companies often charge different rates for the same coverage. This is why it’s always a good idea to compare rates before selecting an insurance plan.

Some other factors that affect your rates can include,

  • The type of business
  • Number of employees
  • Your location
  • Limits on the policy
  • If the policy is bundled with other types of insurance or if you’re carrying other policies

Your history of claims can also raise or lower your insurance rates.


Talk To An Agent About New Jersey Business Insurance

Don’t risk your business by not carrying insurance—New Jersey legally requires some types of insurance, while others provide additional protection. Talk to an agent today and protect your business by having the right protection.

With the right policy in place, you can rest easy that your business is properly protected against the unforeseen, so you can stop worrying about the what-ifs in life and focus on running your business at its very best.

We will be happy to hear your thoughts

      Leave a reply

      TechUseful