As a small business owner in New Jersey, you have several options when it comes to insurance coverage. The policies you choose depend on the type of business you run and how much risk you're willing to take on.
General Liability Insurance
General liability insurance protects your business in the event of property damage, bodily injury, or personal injury claims. It covers things like slips and falls on your property or product liability. Most businesses need at least $1 million in coverage.
Property Insurance
Property insurance covers damage to your business's building, equipment, and inventory in the event of events like fire, theft, or natural disasters. Make sure you have enough coverage to repair or replace critical assets.
Business Owner's Policy (BOP)
A BOP bundles general liability and property insurance (and sometimes others) into one convenient policy. It can save you time and money. BOPs are best for most small businesses.
Professional Liability Insurance
If you provide a professional service, consider professional liability insurance. It protects against claims that your business's services caused a financial loss to clients. Lawyers, accountants, and consultants typically carry this coverage.
Commercial Auto Insurance
If your business owns vehicles, you'll need commercial auto insurance for liability and physical damage coverage. It's not the same as personal auto insurance. Make sure any employee who drives for work purposes is listed on the policy.
Other Policies
Depending on your business, you may want cyber liability, directors and officers (D&O), errors and omissions (E&O), or workers compensation insurance.
Chat with an insurance broker to determine what coverage options fit your unique needs.
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How Much Does Small Business Insurance Cost in New Jersey?
The cost of small business insurance in New Jersey depends on several factors, including:
1. Type of business and industry. The risks associated with your specific business and industry play a large role in determining premiums. For example, insurance for a retail shop will likely cost less than for a construction company.2. Number of employees. More employees means higher premiums, as there are more people to insure in the event of injury or illness.
3. Coverage and limits. The more extensive the coverage and higher the limits, the higher the premiums. Basic coverage will cost less than a comprehensive policy.
On average, small business insurance in New Jersey can range from $500 to $5,000 per year for a basic package. The exact price will depend on the details of your business and the coverage you choose. The major types of small business insurance in New Jersey include:
Top 5 Most Important Coverages for NJ Small Business Owners
As a small business owner in New Jersey, certain types of insurance are absolutely critical to protect your company. Here are the top five coverages you should consider:
General Liability Insurance
This covers claims of property damage or bodily injury from customers, clients or vendors. Lawsuits are common, and this protects you financially. Look for $1 million to $2 million in coverage.
Workers’ Compensation Insurance
Required for any company with employees, this covers medical bills and lost wages for employees injured on the job. Rates vary based on your industry and claims history.
Business Property Insurance
This covers damage to your office space, equipment, inventory, and vehicles in the event of events like fire, theft or natural disasters. Make sure you have adequate coverage for the total value of your business assets.
Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, this covers claims from customers or clients alleging improper work or negligent actions. Important for service-based businesses like consultants, architects, and lawyers.
Business Owner’s Policy
A BOP bundles general liability, property, and business income insurance. It’s often more affordable and convenient than separate policies. Can also include coverage for equipment, vehicles, and liability for business signs.
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How to Get the Best Rates on Small Business Insurance in NJ
To get the most affordable insurance for your small business in New Jersey, here are some tips to keep in mind:
1. Shop around at different insurance companies
Compare quotes from various providers to find the most competitive rates. Check independent agents who represent multiple carriers, as well as direct insurance companies. Compare both local and national companies.
2. Raise your deductibles
The higher your deductibles, the lower your premiums will be. Make sure the deductibles you choose are amounts you can afford to pay out of pocket if you have a claim.
3. Bundle your policies
Buy multiple policies from the same company, such as business insurance along with commercial auto insurance. Bundling usually qualifies you for a discount of up to 20% on your premiums.
4. Improve workplace safety
Take measures to prevent losses like installing smoke detectors, security systems, proper lighting, etc. Fewer claims and lower risks will make you eligible for lower rates.
5. Maintain a good credit score
Insurers consider your credit score when determining your premiums. A good score signals you're a responsible business owner and less likely to file claims. Check your business credit report and score before shopping for insurance.
6. Ask about discounts
Inquire about common discounts for small businesses like multi-policy, safety program participation, association membership, loyalty, and more. Make sure you're getting all the discounts you qualify for.
7. Consider alternative insurance options
For very small businesses with few assets, alternative risk programs like self-insurance, captives, risk retention groups, risk pools, etc. could lower costs. These alternatives allow you to share risks and pool premiums with other businesses.
8. Review and negotiate rates annually
At your policy renewal, reassess your coverage needs and shop around again for the best new customer rates. Negotiate with your current insurer to match or beat the competitor's quotes. Loyalty doesn't always mean the lowest price.
Following these steps will help ensure you find an affordable small business insurance policy in New Jersey that provides your company the coverage it needs. Compare multiple quotes, improve risk management, and negotiate the best rates you can get.
READ ALSO: USAA Commercial Insurance Has You Covered
FAQs About Small Business Insurance in New Jersey
Here are some of the most frequently asked questions about small business insurance in the Garden State:
Do I need business insurance in New Jersey?
Yes, almost all businesses in New Jersey are required to carry certain insurance policies by law, including:
Worker's compensation insurance
General liability insurance
Commercial auto insurance
Property insurance
What types of business insurance should I consider?
In addition to the required policies, you may want to consider other options like:
Professional liability insurance
Business owner's policy (BOP)
Umbrella insurance
Cyber liability insurance
Employment practices liability insurance
Does business insurance really cost that much in New Jersey?
Costs can vary significantly based on factors like your business type, number of employees, location, claims history, and coverage limits.
