What does business insurance cover in NJ

Starting a new business isn’t for the faint of heart. It’s a risky endeavor that often requires hours of research and planning, late nights, and multiple coffee runs. So when your business is finally up and running, you’ll understandably want to protect it. By far the best way to keep your corporate brainchild safe is to start by equipping it with the right New Jersey business insurance coverage.

What Is New Jersey Business Insurance?

No matter where your business is based, business insurance is essentially an agreement between the business and an insurance company in which the insurer agrees to cover financial losses by the business. Of course only specific perils stated in the policy will be covered by the insurance company. Business insurance is set up to help businesses recover from damage or destruction that could otherwise lead to financial ruin.

What Does New Jersey Business Insurance Cover?

Business insurance is set up to protect business owners against potential threats. This goes for businesses anywhere in the country. The more risks involved in your specific business, the more coverage you’ll need. There are four main components of standard business insurance packages:

  • Workers’ compensation: Covers financial losses if your employees become ill, get injured, or die from a work-related incident. Depending on the type of work being performed, this coverage is mandatory in New Jersey. 
  • General liability: Protects you against property damage or injury claims made by a third party. 
  • Business auto: Protects any company vehicles against things like theft, vandalism, and damage from natural disasters.
  • Property insurance: Covers loss of or damage to your physical property including your office space and often the inventory inside it. Protected mishaps include fires, storms, and more.

These four components compose the core of business insurance packages. However, there are many optional add-ons that you may want to purchase, depending on the type of business you run and the extra coverage your operations may require.

Common optional add-on coverages include but are not limited to:

  • Cyber risk & privacy liability: This add-on covers the loss or theft of customers’ sensitive data including credit card numbers and more. This coverage can also save your business in the event a deposit or money transfer is intercepted by cybercriminals.
  • Employment practices liability: This covers fees for lawyers and other financial ramifications if any of your employees are involved in harassment cases against coworkers or customers.
  • Boiler & machinery: Also known as "equipment insurance," it covers electric equipment in the building (e.g., AC units and boilers) that breaks down due to power surges, etc. Property insurance may cover this stuff, but not always.
  • Business income: A part of property insurance, this aspect covers the financial loss suffered while a business is closed due to fire damage or other disasters.
  • Professional liability:  Also known as "errors and omissions insurance," this coverage protects against claims made by clients who have suffered financial loss due to the work they've hired you for. This coverage is crucial for those who offer advice or consulting as part of their services.
  • Utility services: Covers losses due to halted production resulting from an extended power outage. Prolonged power outages can lead to spoiled food or other supplies. Coverage can also be applied to the replacement or repair of your products and machinery as well as income lost due to suspended operations.
  • Liquor liability: Important for any establishment that serves liquor, coverage protects a business in case they overserve a customer who then ends up with a DUI or other alcohol-related charges.
  • Crime insurance: Covers losses due to criminal activity such as theft or fraud. Coverage even applies to employees who steal from the company.
  • Inland marine insurance: Covers loss, theft, and damage of property while it’s in transit. Any goods being shipped to your customers require this coverage specifically.

The more complex the business, the more types of coverage it’ll likely require. Working together with a New Jersey independent insurance agent is the best way to ensure your business has every aspect covered from all potential risks.

What Does New Jersey Business Insurance Not Cover?

Like every other kind of insurance out there, business insurance comes with a specified list of covered perils as well as non-covered perils. The two main perils not covered under business insurance are flood damage and earthquake damage. Special flood insurance and earth movement policies would be required to protect your business from damages and suspended operations caused by these types of disasters.

Flooding is certainly a concern in New Jersey thanks to its coastal location. Flood insurance policies are only available through the National Flood Insurance Program, which is a part of FEMA. Business owners in New Jersey may want to seriously consider getting flood insurance, especially if they’re located in an area prone to flooding.

What are the Benefits of New Jersey Business Insurance?

After working hard to build and establish a business, it’s important to keep it protected. Having insurance coverage is key to helping your business recover from any tragedies that could potential result in financial losses. Really, having adequate business insurance coverage could mean the difference between a business going under or staying afloat following a disaster. Standard business insurance packages provide coverage for many common risks.

New Jersey business insurance typically provides coverage for the following perils:

  • Fire and smoke
  • Lightning
  • Explosions
  • Windstorms and hail
  • Aircraft or vehicle damage
  • Riot or civil commotion
  • Vandalism
  • Sprinkler leaks
  • Building collapse
  • Volcanic action
  • Certain types of water damage

In addition to the specific covered perils, there are a handful of major reasons any business owner should get coverage. Here are the three main ways business insurance is helpful:

  • Protection of your stuff: This includes your personal property, equipment, and your office building against things like theft and damage.
  • Protection from legal consequences: This protects you if any aspect of your business causes damage or bodily harm to a customer and you are sued.
  • Protection from mistakes: Should you or your employees make a professional error that causes physical or emotional harm to the public, you would be covered.

Your New Jersey independent insurance agent can help you review your business insurance policy to answer any remaining questions about your coverage. They’ll also be able to help you figure out whether you’ve got enough coverage or if you should purchase more.

How Much Does Business Insurance Cost in New Jersey?

It depends on the type of business. Basically what it comes down to is the simpler and less risky a business is, the less risk it is for an insurance company to cover, which leads to a cheaper premium. So a small stand-alone business that sells New Jersey memorabilia to tourists might only pay $400-$500 per year, while a huge chain of gas stations might pay more than $500,000 per year. It all depends on the size and risk level of the business.

Why Work with a New Jersey Independent Insurance Agent?

In order to get the protection you need and deserve, you’ll want to work with a trusted expert. And who could be better for the job than a local agent who shares your area code? Independent insurance agents act as your own personal insurance shoppers, offering you tons more options than one-policy companies. With just one call, they’ll hook you up with multiple quotes.

New Jersey independent insurance agents are armed with knowledge on what coverage is needed in your area, and they’ll get you set up with just enough of it — not too little, not too much. They’ll handle all the heavy lifting so you can rest assured you’ll be set up with the right coverage at the right price.

They’re not just there at the beginning either. If disaster strikes, your New Jersey agent will be there to help walk you through the claims process and make sure you’re getting the benefits you're entitled to. Now that’s thinking ahead.

Author | Chris Lacagnina

Article Reviewed by | Paul Martin

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