A small business is defined as any company with fewer than 500 employees. Of New York’s nearly 2 million small businesses in 2008 (the latest data available), 440,510 were small employers. Another 1,546,788 were one-person operations with no employees.
Source: SBA New York Small Business Profile 2006.
About Commercial Liability Insurance for NY Businesses
Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your New York business from financial loss resulting from claims of injury or damage cause to others by you or your employees. A policy typically covers:
Bodily Injury – physical damage to a person other than an employee at your place of business and injuries caused by you or an employee at a client’s home or work place.
Property Damage – damage caused by you or an employee to someone else’s property.
Personal Injury – libel, slander, copyright infringement, invasion of property or privacy, wrongful eviction, false arrest and similar acts that cause damage to a person’s reputation or rights.
Advertising Injury – losses caused by your advertising
Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.
New York Minimum Business Insurance Requirements
Commercial Liability Insurance is not mandatory for businesses operating in New York. While there have been recent calls for tort reform, New York does not currently cap awards for personal injuries, although it does follow a pure comparative negligence system that reduces the amount awarded by percentage of fault. Accidents and lawsuits do happen in the Empire State. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your business to limit your risk exposure.
How Much New York Liability Insurance Should You Carry?
Each situation is unique, but as a general guideline, the type of New York business you operate or products you manufacture should determine how much New York commercial general liability insurance you need. A good rule of thumb for most small businesses is between $500,000 and $1 million. However, if yours is a high-risk business such as the building trades or has a high volume of interaction with the public such as a retail business, you should consider increasing your coverage. Note that if you operate out of your home, your homeowner’s or renter’s insurance has limited coverage for business liability and loss.
How Are Premium Costs Assessed?
New York commercial liability insurance premiums are based on a number of factors including the types of service or products you provide, the number of people you employ, how long you’ve been in business, and your claims history. Coverage is typically capped at a specific dollar amount for your policy period.
Other Insurance to Consider for Your New York Small Business
New York requires that anyone who employs at least one person, whether full or part time, carry workers compensation insurance. Sole proprietors, partners, and one/two person corporate officers with no employees are not required to carry workers compensation. While general contractors are not required to carry workers compensation, they can be liable for claims filed by employees and would be wise to require sub-contractors to provide valid proof of workers compensation insurance.
New York mandates that employers provide employee disability coverage to provide disability income for employee off-the-job illness or injury for up to six months, starting on the seventh day of an illness or injury.
New York requires that all drivers carry minimum automobile insurance. If you use your car or truck for business, it is recommended that you purchase a commercial vehicle policy.
BOP – Business Owner’s Package
E&O – Errors & Omissions
EPLI – Employment Practices Liability Insurance
Commercial Property Insurance
Regulating Agency and References
New York Department of Financial Serivces
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage.
Albany: Consumer Services Bureau
NYS Insurance Department
One Commerce Plaza
Albany, NY 12257
New York City: Consumer Services Bureau
NYS Insurance Department
25 Beaver St.
NYC, NY 10005-2319
New York Small Business Administration
The SBA is an independent agency of the federal government created to aid, counsel, assist and protect the interests of small business concerns and maintains New York district offices in Buffalo, Syracuse and New York City. Get links to district offices at http://www.sba.gov/.
National Association of Insurance Commissioners (NAIC)
This is an organization of insurance regulators from the 50 states, District of Columbia and the five U.S. territories. NAIC provides a forum for the development of uniform policies when appropriate. It also offers an online form for filing complaints, reporting suspected insurance fraud and downloading key financial information about insurance carriers at www.naic.org
Insurance Information Institute (III)
This organization’s mission is to improve public understanding of insurance – what it is and how it works. Visit III at www.iii.org/