New Jersey requires several types of insurance for small businesses. The specific policies you need depend on your business and industry.
Types of Small Business Insurance in New Jersey
1. General Liability Insurance
General liability insurance protects your business from financial loss if you're sued due to injury or property damage. It covers things like slips and falls on your premises or damage from your products. In NJ, general liability insurance is required for many businesses.
2. Professional Liability Insurance
Also known as "errors and omissions" insurance, professional liability insurance protects you from claims of negligence or improper work. It's required for businesses like contractors, consultants, and healthcare practices.
3. Property Insurance
Property insurance covers damage to your business property from events like fire, theft, or natural disasters. It protects things like your building, equipment, inventory, and furnishings. Property insurance is essential for any business that owns physical assets.
4. Business Owner's Policy (BOP)
A BOP bundles general liability and property insurance into one convenient policy. It provides broad coverage for businesses looking to insure the essential risks. BOPs often save money compared to buying separate policies.
5. Workers' Compensation Insurance
Workers' comp insurance provides coverage for work-related injuries and illnesses. It pays for medical bills and lost wages if an employee gets hurt on the job. In New Jersey, workers' comp insurance is mandatory for all businesses with employees.
READ ALSO: A Small Business Owner's Guide to General Liability and Workers Comp
How to Choose the Right Small Business Insurance Coverage
Here are some tips to help you choose suitable small business insurance plans:
1. Consider the requirements for your industry
Some types of businesses are legally obligated to carry certain insurance policies. Make sure you understand all mandatory coverage for your field. For example, auto garages must have garage liability insurance and doctors need medical malpractice insurance.
2. Think about the risks your business faces
Ask yourself what kinds of events could lead to financial loss or legal issues. If you lease or own a building, property insurance is a must. Business interruption insurance will reimburse you for lost income if you have to temporarily close. Product liability insurance protects you if a customer sues over a faulty product. Evaluate your risks and choose policies accordingly.
3. Compare coverage and costs
Shop around at different insurance companies to find plans with sufficient coverage at affordable premiums. Check independent rating sites to see customer reviews and ratings of providers. Compare quotes to find one with competitive rates for the policies you need.
4. Consider bundling multiple policies
You may be able to get a discount by purchasing more than one type of insurance from the same company. Bundling property insurance, liability insurance, and business interruption insurance, for example, can potentially lower your total premiums. Ask providers about available bundling packages and any discounts they offer.
READ ALSO: Small Business Insurance: Finding the Right Policy for Your Company
Top Tips for Saving on Your New Jersey Small Business Insurance
When paying for insurance premiums in New Jersey, every penny counts for small business owners. Here are some of the best ways to lower your costs without sacrificing coverage.
1. Bundle multiple policies
Bundling your business insurance policies together, like general liability, property, and business owner's insurance, can lead to a discounted rate. Insurance companies prefer insuring all of your business needs under one package, so they often provide a bundling discount. Shop around at different companies to find the best bundled rate.
2. Increase your deductibles
If you can afford higher deductibles, increasing them can lower your premiums significantly. The higher the deductible, the less the insurance company has to pay out in claims, so they charge you less. Just make sure you can cover the costs of the higher deductibles if you do end up filing a claim.
3. Improve your business credit score
In New Jersey, insurance companies often consider your business's credit score when determining premium rates. The higher your score, the less risky your business appears and the lower your rates can be. Check your business credit report for errors, pay bills on time, and reduce debt to improve your score.
4. Review and reduce coverage
Double check that you have the right coverage limits and types of insurance for your business's needs. You may be paying for more coverage than you actually need. For example, you can lower limits or remove optional endorsements to trim costs. But be very careful not to cut any necessary coverage.
5. Ask about discounts
Don't hesitate to inquire with insurance providers in New Jersey about any discounts they offer that you may qualify for as a small business owner. Common discounts include loyalty, experience in business, safety features, non-smoking business, and more. Every little bit of savings helps.
Conclusion
Following these useful tips and putting in a little effort can really pay off when it comes to affording small business insurance in New Jersey.
Do your research, make a few changes, and shop around with different providers you'll be rewarded with lower premiums and better coverage for your company.
