Business insurance protects you against devastating financial losses caused by accidents, natural disasters and lawsuits – providing both peace of mind and financial security.
Some states mandate certain business owners to maintain specific types of coverage, while other types are usually optional but important considerations. Such coverage might include workers’ compensation, general liability and commercial auto policies as well as business owner’s policies (BOP). Additional coverage may be required depending on specific industries or activities.
1. Workers’ Compensation
Workers’ comp insurance provides your business with vital protection from lawsuits relating to employee injuries or illnesses. Without it, any one claim could bankrupt your business – not only is this required by most states by law but individual states may vary greatly when it comes to requirements such as employees that trigger it and owner exemption rules. Furthermore, many states offer an assigned risk pool program through which similar industries can purchase coverage if their own insurers cannot.
Those operating small businesses without workers’ compensation policies could find themselves held liable for medical treatment expenses, lost wages and any additional expenses associated with employee injuries. Furthermore, any violations could lead to fines or even jail time.
New Jersey requires all businesses, regardless of type, to either carry workers’ compensation insurance or be approved for self-insurance. This requirement applies to partnerships and limited liability companies (LLC’s) unless they request an exemption in writing; sole proprietors can only be exempted if granted hardship exception by the Worker’s Compensation Insurance Rating Board, who also offer policyholder ombudsmen who can help answer questions related to classification, experience modification or rating issues.
2. General Liability
General liability coverage may not be mandated by law, but various state regulations, industry standards, and practical business needs make general liability coverage an integral component of any small businesses’ protection plan. Commercial landlords frequently request proof of coverage prior to renting office space while clients may refuse to work with businesses who don’t offer adequate general liability protection.
Your company, be it a law firm, accounting firm or hair salon, engages with clients and the public on an everyday basis. At some point in time someone could allege that your company caused bodily injury or property damage, leading to costly litigation that can have devastating financial repercussions for both parties involved. A comprehensive general liability policy protects businesses against such claims by covering legal fees and costs in case such events as slip-and-fall accidents arise.
Your specific policy requirements depend on your industry and business size; most small businesses opt for policies with $1 million per occurrence/$2 million aggregate limits as the baseline coverage level. For added protection, add a commercial umbrella policy that increases maximum policy limits to provide adequate protection in case of larger lawsuits. It is possible to buy multiple location policies but this is generally discouraged as this could create conflicting claims paying schemes between different locations.
3. Business Owner’s Policy (BOP)
Establishing a business can be an exciting adventure, but it comes with risks such as property damage and liability lawsuits that must be mitigated with proper insurance policies.
One option available to low-risk businesses is a BOP policy, or business owners policy, which bundles general liability and commercial property insurance into one cost-saving package. Such policies typically cover bodily injuries, property damage to customers’ properties and advertising injuries in addition to providing commercial property coverage such as computers and office furniture.
Commercial property insurance typically protects a company’s physical building and contents from events like fire, explosion, windstorm and burglary. Additionally, business interruption insurance provides reimbursement of lost income when a disaster forces it temporarily close down shop. Business Owner’s Policies (BOPs) typically exclude earthquake coverage but additional endorsements can provide this kind of coverage if required.
Though business owner packages (BOPs) may seem suitable, not every type of business needs one. You may require additional insurance policies such as workers’ comp and commercial auto coverages to properly protect yourself, or consider other forms of packages such as contractor and restaurant-type industries which have higher risk profiles – or additional commercial auto and worker’s comp policies may need to be purchased separately for certain industries such as construction or restaurants requiring separate worker’s comp policies and separate auto/worker’s compensation policies separately. For more information about BOPs or any other business insurance options available to your local agent today!
4. Commercial Auto
Businesses using vehicles for operations often need commercial auto insurance in order to meet state requirements and protect themselves against liability and physical damage claims. Policies typically cover cars, trucks and vans used exclusively for business use – with optional coverages such as loan/lease gap coverage, rental reimbursement or even vehicle replacement coverage as part of their policy offerings.
Commercial auto insurance policies can benefit contractors, landscapers, painters and other tradespeople who transport tools and equipment directly to job sites in their own cars or trucks. Companies providing goods or services like furniture stores might also use commercial vehicles for delivery purposes; taxi or limousine services and companies that transport volunteers or clients using buses or vans could use such vehicles too.
Minimum requirements for commercial auto insurance vary by state, but most require greater liability protection than what personal auto policies can offer. Many also mandate certain amounts of uninsured/underinsured motorist coverage as well.
Businesses may acquire non-owned and hired car coverage to protect against employees using their personal cars for business, renting vehicles from third parties, or borrowing vehicles to use in business activities. Such an arrangement usually extends liability limits while offering lower premiums than buying individual policies for each employee vehicle.
