Small business owners in New Jersey protect their establishments and employees with NJ business insurance, which can provide a financial safety net to cover unexpected expenses when things go wrong. These businesses are responsible for writing paychecks for more than 1.9 million employees, representing almost half of all workers in the Garden State.
Small business insurance provides financial protection against losses. The types of risks covered vary by policy and can include property damage, employee injuries and illnesses, liability and lawsuits, or acts such as cybercrime or employee theft. It can help keep your business on track after accidents and events such as:
- Injuries to non-employees, including clients
- Damage to someone else’s property
- Claims of professional negligence
- Employee injuries on the job
- Auto accidents while driving for business
Minimum business insurance requirements in New Jersey
New Jersey has multiple laws and regulations concerning business insurance requirements across a wide swath of industries operating within the state. The size of your business, industry, and number of employees will have the biggest role in determining insurance requirements for your business.
Workers compensation insurance and general liability insurance are the most common coverages in New Jersey. There are several factors that will mandate Workers’ Compensation Insurance in New Jersey. A licensed insurance advisor will be able to determine if your business falls within any of these requirements and if any exemptions are applicable.
Most popular New Jersey business insurance policies
Workers’ Compensation Insurance
New Jersey state law requires most businesses with employees to carry workers’ compensation coverage. This kind of coverage provides protection when employees are hurt on the job, and can help cover medical bills and lost wages during their recovery.
For example, two employees at a construction company in Paterson suffer back injuries while moving a beam on the job, leaving them unable to work for a month. Workers’ comp could help pay for their medical expenses, and physical rehabilitation bills and cover lost wages while they get better.
Types of insurance under this include:
Life insurance
You and any other members of your business can acquire a life insurance policy. This is similar to key person insurance, providing a beneficiary with financial assistance in the event of your death. Having life insurance in place can give you peace of mind that your death will not burden your family or business partners financially.
Disability income insurance
Disability insurance is similar to workers’ comp in that it temporarily covers an employee’s lost wages if they are unable to work because of a disability. However, disability insurance will cover injuries or illnesses that occurred on or off the job, whereas workers’ comp only covers work-related issues.
This type of insurance is also sometimes required by law.
Key person insurance
When founders die, businesses often have a challenging time continuing operations. It is essential for entrepreneurs to create a business continuity plan so the company can still thrive if the worst happens.
Key person insurance, also known as key man insurance or key woman insurance, helps replace lost revenue due to the death of a key executive of your business. Your business pays the premium while the key person is alive and then collects a death benefit after their passing.
These benefits can be essential to continuing the operation of your business or finding someone to fill their role.
General liability insurance
General liability coverage, also called commercial general liability insurance, is one of the most common and important forms of business insurance in New Jersey. If someone claims that your business caused injury or destroyed property, general liability insurance can help pay for damages and lawsuit costs if you’re sued.
For example, a homeowner accuses a Newark-based HVAC company of improper wiring that starts a fire and causes significant damage. General liability insurance could help cover the cost of repairs and pay attorney fees if the client takes the HVAC company to court.
Construction and cleaning companies in New Jersey might want to add tools and equipment coverage to their general liability policy. This optional coverage can help pay to repair or replace work gear that’s lost, stolen or damaged outside of normal wear and tear.
Professional liability insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects businesses that offer professional services in New Jersey. B2C businesses often use E&O coverage to protect against claims stating their services caused clients financial distress or bodily injury.
Doctors’ malpractice insurance is a common type of professional liability insurance. This insurance type is also essential for professional service providers like consultants and financial advisors. Costs for professional liability insurance will vary depending on the industry and profession. For example, a doctor would likely pay more than a CPA.
Recommended commercial insurance for small businesses in New Jersey
Business Owners Policy (BOP)
If you live in New Jersey and want general liability insurance and property coverage, you can package them together in a business owner’s insurance policy, also known as a BOP. A BOP provides liability coverage for customer injury, property damage, and product-related claims, in addition to commercial building and movable property coverage.
Many BOPs also include business interruption coverage, which pays your lost revenues if you close for a covered claim. This coverage type is ideal for owners of small and midsize businesses like restaurants, retail stores, and wholesalers. Keep in mind that BOP insurance doesn’t cover your employees.
Cyber insurance
Cyber insurance protects businesses against losses and liabilities arising from cyber threats and data breaches. It provides coverage for expenses related to data breaches, including legal costs, customer notification, credit monitoring, and reputation management.
Businesses in New Jersey can use cyber insurance to manage the financial and legal risks associated with data breaches, cyber-attacks, and other cyber incidents.
Directors and officers (D&O) liability insurance
If your business has a corporate board of directors or advisory committee, you want D&O insurance. This insurance protects your directors’ and officers’ assets if they are personally sued for wrongful acts in company management (e.g., failure to comply with workplace laws, fraud, theft of intellectual property, misrepresentation of company assets, or misuse of company funds).
Commercial auto insurance
Commercial auto insurance provides coverage for vehicles used for business purposes in New Jersey. It includes liability coverage for third-party injuries or property damage, as well as coverage for damage to the insured vehicle.
Commercial auto insurance is similar to personal automobile insurance; it protects your cars, trucks or vans in the event of damage, injury or liability claims. However, commercial auto insurance provides additional coverage, including property and liability trailer exposure, loading and unloading exposure, hired vehicle coverage, non-owned vehicle coverage, and higher coverage limits.
Commercial auto insurance packages in New Jersey may include hired and non-owned auto coverage. This optional insurance upgrade can help pay for business accident damages for employees who occasionally drive their own cars for work or rent vehicles.
Commercial property insurance
Commercial property insurance in New Jersey can protect the things you need to run your business, such as equipment, inventory and even your business location if you own the property.
It’s important to read your policy documents carefully to make sure there aren’t exclusions for your business. Some locations prone to flooding or hurricane damage might have limited coverage.
Best business insurance providers in New Jersey
Allstate
Allstate offers a line of insurance for small businesses. Its coverages include BOP, property coverage, business liability, business interruption, equipment breakdown, and commercial auto.
Allstate’s overall ease of use seems to lag behind some other companies in our review. You can get a quote for a commercial auto policy online, but it’s not clear how easy it is to get a quote online for other business insurance products — it appears that an agent must complete quotes for some business types.
Also, according to its website, you can only file a claim through an 800 number.
Chubb
Chubb is one of the largest insurers in the United States. Its business insurance offerings include workers’ compensation, BOP, cyber insurance, professional liability, general liability, and business umbrella.
On the Chubb website, you’ll find a lot of useful information to help small business owners understand their insurance needs, including articles and tools such as cost estimators. You can get a quote online or through an agent and report a claim online as well.
Next Insurance
Next Insurance is a relative newcomer to the small business insurance market. However, the company has received significant financial backing from Munich Re, one of the world’s largest multinational insurance companies.
As it is among a growing number of companies focused on insuretech, Next Insurance offers an easy-to-use web experience. You can get online quotes for general liability, workers’ compensation, BOP, commercial auto, and more. You’ll also find coverage packages tailored to the typical needs of certain types of businesses such as contractors, retailers, fitness providers, and even Amazon sellers.
Also, you can download a certificate of insurance through the website or the company’s app.
NJM
Based in New Jersey, NJM sells business insurance to customers in several mid-Atlantic states. The company offers workers’ compensation, commercial auto, commercial excess and umbrella, EPLI, cyber insurance, BOP, and a commercial package policy.
The commercial package policy includes property coverage, liability coverage, business income insurance, inland marine, and crime coverage. It is similar to a BOP but caters to businesses with more extensive coverage needs. With NJM’s small business insurance policies, you can get a quote online or through an agent and file a claim online or by phone.
Progressive
While perhaps best known for its personal auto coverage, and ubiquitous advertising mascot, Progressive offers a broad slate of business insurance. Its offerings include BOP, professional liability, general liability, workers’ compensation, cyber insurance, commercial auto, and contractor liability.
The company claims to be the number one commercial auto insurer in the U.S. (based on premium), with more than 1.9 million insured vehicles.
The Progressive website promises quotes in just a few minutes and includes a variety of resources, such as articles and FAQs, to help you understand your coverage needs. The company is also supported by a countrywide network of independent agents. You can file a claim online or by phone.
State Farm
State Farm offers various types of protection, including BOP, commercial auto, liability, workers’ compensation, inland marine, E&O, EPLI, key person coverage, and more. The company website’s “Small Biz Quiz” is a helpful feature designed to assist you in determining coverage needs and you can also use State Farm for your retirement plan.
Perhaps State Farm’s only drawback is its ease of use. Quotes and policy sales are through its local agents only, and the website does not appear to offer a claim reporting feature — you have to call the company instead.
How much does small business insurance cost in NJ?
The cost of business insurance in New Jersey can vary widely based on several factors. Business size, industry, and amount of coverage all affect monthly premiums in New Jersey.
For example, the cost of a Business Owners Policy for a manufacturing company operating in Newark will be very different from a Business Owners Policy for a hardware store in Paterson. Other considerations such as annual sales, payroll, company assets, and claims history also help determine the cost of business insurance in New Jersey.
A licensed insurance advisor will be able to identify Business Insurance discounts in New Jersey that you may qualify for, along with discounts for bundling Business Insurance in New Jersey.
The average costs of business insurance in New Jersey are:
- General liability: $40 per month
- Workers’ comp: $44 per month
- Professional liability/E&O: $64 per month
Business insurance packages in New Jersey will be priced based on your company’s insurance requirements. Some of the factors that will affect your cost include:
Your profession and risk profile
Industries that have a greater risk of injury and property damage can expect to pay more each month for coverage. For example, construction companies in New Jersey will likely have a larger business insurance bill than professional services firms.
The coverage options you select
While you might be tempted to omit some types of recommended coverage when purchasing your insurance package, this may not be in your best interest. Although it could save a little money every month, this can put you at risk of paying out of pocket if you don’t have the right coverage when an accident happens.
Number of employees
Most states determine workers’ compensation insurance costs based on the number of workers on your payroll. Providing up-to-date employee numbers for your insurance quote is the best way to get an accurate price.
The best way to explore coverage options and find out how much you’ll pay for a business insurance policy is to get a free instant quote.
How much business insurance coverage do I need in New Jersey?
The amount of coverage you need — and its cost — will vary greatly depending on the type of business you run, its size, number of employees and assets, and other factors.
Most small businesses need general liability insurance, property insurance, and business interruption coverage. You can package these coverages into a BOP to make things easier and, in most cases, save some money. If you have employees, you’ll likely also need workers’ compensation. Meanwhile, you’ll need commercial auto insurance if your business owns, rents, or leases cars or trucks.
Many insurance company websites have coverage selection tools to help you understand your business’s coverage needs. Some companies even sell packages of coverage tailored to the needs of specific types of businesses. You can also reach out to an insurance agent who sells business insurance.
An agent will take the time to understand your business and match you with a policy that meets your needs.
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