Did you know that New York is home to over 2 million small businesses that employ almost 4 million of New York's residents? New York is the perfect place to be part of a small business. But if you're a small business owner, you need to make sure you're protecting your business with the right insurance coverage. So in this article, we talk about the insurance that New York requires businesses to have. Plus, we also cover business insurance policies you should consider to add a layer of protection.
What Insurance is Required in New York?
New York requires that all businesses carry workers' compensation insurance. However, anyone that uses vehicles for their job (transporting patients, delivering goods, etc.) must have commercial vehicle insurance.
Workers' Compensation Insurance
Workers' comp is legally required insurance coverage for any New York business that has one or more employees. New York state law requires that all businesses in New York carry workers' compensation insurance as part of their business insurance package. Workers' compensation insurance will cover your employees' medical bills and lost wages if they get injured (or become ill) while on the job. New York-based businesses must also pay for disability insurance for all of their employees.
Commercial Auto Insurance
Commercial auto insurance is required if you use personal or company vehicles in your line of work, whether it's driving to insurance claims or delivering goods. The average commercial auto policy includes bodily injury liability coverage, property damage liability coverage, and general damages for expenses incurred during accidents
Adequate coverage should include $25,000 bodily injury claims coverage per person, $10,000 property damage liability per accident, and $50,000 bodily injury liability per accident. They also require death liability coverage of $50,000 per person or $100,000 per accident. Some personal auto policies will exclude coverage for business use, so be sure to check with your auto insurance.
Types of New York Business Insurance Offered
There are a few other types of insurance that we recommend for small businesses in New York.
New York General Liability Insurance Coverage
General liability insurance (commonly referred to as business liability insurance or casualty insurance) isn't required by the state of New York but is highly recommended for all business owners. Commercial general liability insurance is great coverage for small business owners because of how comprehensive the coverage is compared to the cost. Commercial liability insurance usually includes coverage for:
- Third-party bodily injury: This portion of your business liability insurance covers medical expenses if someone is injured on your property.
- Third-party property damage: If someone's property is damaged while on your premises—even just in your parking lot—your insurance company will pay to repair or replace the item(s).
- Personal and advertising injury: This will protect your small business if you're accused of libel, slander, or copyright infringement. Your insurance company will provide you with a legal defense and cover court costs if you're sued.
Example #1: A customer trips over a display that you're setting up in your souvenir shop. Unfortunately, they knock over some picture frames and cut themself on the glass. General liability insurance will pay for the medical treatment to stitch the cuts.
Example #2: A patient claims that your signage fell on their car and smashed the windshield. Your security cameras show that strong winds knocked the sign down. But because you have general liability, your insurance company will cover the cost to repair their damaged car.
Example #3: A competitor claims that your advertisement on a local radio show is mocking their business. They claim they can prove lost revenue due to the ad and sue you for libel. Luckily, because you have general liability insurance, your insurance company will help pay for a lawyer, as well as cover court costs and settlements.
New York Commercial Property Insurance
Commercial property insurance (or business property insurance) is recommended for any business that owns, rents, or leases a physical business location. It's also recommended for anyone with a home-based business whose assets aren't completely covered by homeowners insurance.
Property insurance will cover physical damage to your building or office space. Covered perils usually include damage by vandalism, theft, fire, and storms. This policy typically covers the contents of your building, which can include your furniture, inventory, and equipment (like computers and other electronics), as well as personal property.
Most insurance companies exclude damage caused by acts of war, nuclear hazards, earthquakes, and flooding. If your business is in a flood zone, you may want to consider a separate insurance policy. If you don't have one and your business floods, you'll have to pay for the repairs out of your own pocket.
New York Business Owners’ Policy
A business owners' policy (BOP) is a bundle of insurance coverages that insurance carriers offer to small businesses at a rate that's usually cheaper than purchasing each policy separately. A basic BOP will generally include general liability insurance, commercial property insurance, and business interruption insurance.
Business interruption insurance is often required by your lender or the property management that you're leasing your space from. If your business can't operate because of a covered loss (say a storm damages your property), this policy covers operational expenses, such as covering payroll for employees, paying your lease paying taxes, and even covering some lost profits. It's usually capped at a specific length of time or until your business is up and running again, whichever comes first.
Insurance companies may include other insurance options in a business owner's policy that cover risks that are unique to your industry. We recommend working with an experienced insurance agent in your industry to get customized coverage for your small business.
Professional Liability Insurance
Professional liability insurance—also commonly referred to as errors and omissions insurance—will cover your business if you're accused of negligence, missed deadlines, or professional errors in your work. Professional liability coverage will pay for legal defense costs and associated expenses. This type of coverage is usually recommended for businesses that provide professional services, such as lawyers, doctors, dentists, or architects.
Cyber Liability Insurance
Cyber liability insurance protects your business from liability if you're the object of a cyberattack or data breach. A cyber liability policy will usually cover the cost to notify impacted customers and government agencies and pay for credit monitoring for your customers.
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) protects the management and owners of a business if you're accused of things like discrimination, wrongful termination, or sexual harassment. This policy will provide you with a layer if any legal claims arise and cover any legal costs and settlements.
How Much Does New York Business Insurance Cost?
We understand that many businesses are trying to save money and cut expenses. Luckily, the average cost of general liability insurance coverage for a small business in New York can be around $300 a year ranging up to $5,000 annually for between $500,000 and $1 million in coverage. However, many factors impact premium costs. Those factors can include:
- The industry that your business is in (higher-risk industries come with higher premiums)
- Where your business is located (insurance might cost more in New York than Rochester)
- How long you've been in business (in most industries, the longer you've been in business the lower your risk of claims)
- Whether or not you have a history of claims (more claims can equal a more costly premium)
- The insurance company that you choose (sometimes insurance companies specialized to your industry can offer better insurance rates)
- The deductibles and policy limits chosen (generally speaking, the higher the deductible the lower the cost, and the higher the policy limit the higher the cost)
- The number of employees you have on staff (workers' compensation rates will be higher the more employees you have)
These are just a few of the factors a licensed insurance agent will look at when assessing the needs of a New York small business.
Get a Free Quote for New York Small Business Insurance Coverage
We understand that finding the best commercial insurance for your business can be a hassle. Whether you are a souvenir shop in New York City, a veterinarian in Buffalo, or a dentist in Rochester, we can help you find the perfect coverage for your specific needs.
Our goal at Tivly is to help New York small business owners get an affordable business insurance quote. 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.
Additional Business Insurance Links
A small business in New York might also want to consider these additional insurance options.
Professions Commonly Insured
Some professions that are commonly insured in New York include: