The Core Coverages for Every Business in New Jersey
By Michael Putrino
May 9, 2019
It is no secret that starting your own business is risky business. From the inception of your organization, you took your first and probably largest risk. You went out and started your own company. Took on the task of assembling the right employees and keeping them on a productive schedule with little to no downtime. Contemplated which employee will fill each roll? Lost sleep over questions like, how much equipment to invest in, should you rent it or own it? What is my demographic? What types of services will I provide and to who? The contemplations and questions are endless, each one with a risk associated with it potentially affecting your ability to effectively run your business.
In addition to all of that, ensuring that your business is properly covered can be an overwhelming feeling. No matter your business or specialization, here are core coverages that every New Jersey business owner needs in place as a basis for covering their business operations.
1. Commercial General Liability
Undoubtedly the most important of all coverages to have in any business and the foundation to your insurance program is Commercial General Liability. This provides protection for your business from liability claims arising out of property damage and bodily injury to third parties.
Who is a third party? Essentially, anyone you encounter on your premises including but, not limited to clients and vendors. Individuals who come into your showrooms, offices or even your construction yards. Whether they are there to conduct business, solicit business or are stopping over because they were in the neighborhood.
Just as in other lines of insurance, there are nuances associated with Commercial General Liability. As a result, it is always best to discuss with your agent to ensure the proper coverage and limits that are necessary for you and your organization.
2. Workers Compensation
If you are in business in the state of New Jersey, Workers Compensation is imperative. Whether your daily activities are carried out by a two-person crew or you boast an employee count of one hundred plus, you need to provide your employees with coverage for work-related injuries. Workers Compensation is a no-fault benefit system that assists your employees with reimbursement for lost wages, medical bills and or rehabilitation if they experience an injury at work or because of job-related duties.
The system is designed so that rather than sue you, after suffering a work-related injury, your employee would file a claim against the policy. The exchange is the employee receives benefits for relinquishing their right to sue you.
Not all employees perform the same duties and as a result, do not have the same risk associated with them. Each type of work is broken into classification codes and, each classification code is rated differently. It is vital to have a discussion with a trusted agent so that all employees are under the appropriate class codes to ensure the most responsive worker compensation program.
3. Commercial Auto
I’ve always admired the companies whose history started with a guy and a pickup truck that later blossomed into a huge fleet. No matter where your company is in comparison, a commercial auto policy is engineered to protect light, medium and heavy-duty vehicles; the pickup, the transit van, the mason dump, and the tri-axel tandem.
The commercial auto policy will cover your company-owned vehicles for both physical damages as well as liability. Do your employees use their own vehicles for work-related activities? If so, while they would not be covered under the basic commercial auto policy, adding a simple coverage called hired and non-owned autos will have you covered.
Also, it is wise to keep a complete and accurate vehicle inventory. Whether you are notifying your agent of a new vehicle to add, an older vehicle to remove or it is renewal time for the entire policy, that vehicle inventory will be extremely helpful.
4. Umbrella
What happens when you have all the right coverage in place, but the limits are fully exhausted? Whether it is additional costs for medical expenses, legal fees or relief paid resulting from a lawsuit, a commercial umbrella policy will provide you with the additional coverage needed. This is the extra layer to fully complement the other liability coverages already in place for your business (General Liability & Auto for example)
You work tirelessly to build your company, brand, and assets. This is your livelihood and your family’s future. The umbrella will ensure that they are not left at risk due to any of these unforeseen instances that can cause financial hardships for you and your business.
These are the building blocks to construct the most responsive commercial insurance plan for a business owner in the state of New Jersey. Furthermore, there are additional coverages that may be vital to the organization that you run.
- Property Insurance to protect the contents of your building and building itself if you own it.
- Employment Practices Liability (EPLI) to protect against employee lawsuits with respect to wrongful termination or sexual harassment.
- Directors & Officers Liability (D&O) which covers defense cost and damages for claims against the director or officer of the company.
- Cyber Liability to cover your business in the event of a data breach resulting in the release of sensitive information of employees or customers.
As with all lines of insurance, there are a few nuances that must be addressed in order to ensure that coverage is proper for your business. It is always best to consult with a well-informed agent who can tailor a program to fit your specific needs.