Posted on May 16, 2014
All New Jersey businesses benefit from obtaining and maintaining the proper commercial insurance coverage necessary to adequately protect their investment and also comply with state laws concerning insurance requirements. Having the right insurance coverage for your business will give you peace of mind so that you can fully focus on successfully growing your business.
New Jersey Liability Coverage
Business general liability in New Jersey protects companies from claims made by other parties for personal injury or property damage. Having protection in case of lawsuits is vital for companies beginning on day one of opening. Liability insurance provides coverage for a wide variety of issues including fire damage, false advertising claims, medical payments and business operations. While the State of New Jersey does not require general liability coverage, in today's litigious world, businesses need to maintain appropriate levels of insurance coverage to protect assets from legal claims.
Most companies only need basic general liability coverage; however, certain industries require additional protective coverage such as product or professional liability insurance. Product liability covers businesses that sell or make a product from claims of injury by consumers who used the product. Professional liability insurance, on the other hand, covers the neglect, error or omission of facts by a professional individual or company such as a real estate agent, investment broker or attorney.
Workers Compensation Coverage
Workers compensation in New Jersey is a required, no-fault insurance coverage that provides medical treatment, income replacement and permanent disability for employees with work related illness or injury. Employees receive benefits no matter who is at fault, and companies provide coverage through an insurance policy or self-insurance. All businesses with employees whether sole proprietor, partnership, LLC or Corporation must provide workers' comp insurance in the State of New Jersey.
Penalties for not having workers' compensation insurance include up to $5,000 for the first 10 days of non-compliance and an additional $5,000 for each 10 day period insurance is not in force. Additionally, corporate officers can be held individually liable for not having workers' compensation insurance and penalties cannot be discharged in bankruptcy proceedings.
New Jersey Disability Benefits
The State of New Jersey requires all employers to provide disability coverage for employees who are disabled within 14 days of their last day of work either with a state plan or an approved private disability plan. Disabled workers are eligible for the state plan if they earn more than $145 or more in 20 calendar weeks or $7,300 for the 52 weeks prior to disability. There is a 7 day waiting period until benefits begin with a maximum number of 26 weeks for disability benefits.
Business owners may also choose to purchase a private disability insurance plan from an insurance company in lieu of the state plan. In that case, the insurance carrier handles all claims processing and payments for disabled employees.
Commercial property insurance for New Jersey businesses covers any loss to buildings, equipment, inventory, supplies or other business items. Two types of loss are typically covered by property insurance: direct loss by theft, or damage and indirect loss related to the direct loss.
This coverage may be purchased on a replacement cost value or actual cash value basis. Replacement cost is based on the amount needed to replace the property without depreciation; whereas, actual cash value is determined by taking the property's actual value and deducting its depreciation. Business owners can customize their commercial property coverage to protect against specific, named perils or hazards. Insurance brokers can assist with determining the appropriate amount of coverage needed for each business owner's unique situation.
Commercial Flood Insurance
Most flood insurance for New Jersey commercial operations comes from the National Flood Insurance Program. If a business property is located within a high risk flood zone, most lenders require property owners to purchase and maintain flood insurance. Some businesses that reside in low risk areas will still want the option of purchasing flood insurance to protect from potential flooding caused by either manmade or natural disasters. Non-residential buildings are covered up to $500,000 and the contents up to $500,000 for a total of $1 million protection. All flood policies have a 30-day waiting period and therefore businesses should take steps to secure flood insurance as soon as possible to avoid potential losses.
Windstorm Coverage for New Jersey
For coastal areas in New Jersey, windstorm insurance is mandatory. Those coastal areas make up the shore line up to 5 miles inland. Businesses within this area need to maintain windstorm insurance to protect life and property that could be damaged by wind and hurricanes. Typically hurricane deductibles apply separately from regular property deductibles and are incurred when hurricane winds reach certain speeds as determined by the National Weather Service.
Additional Information on New Jersey Insurance
Learn more about commercial insurance requirements for New Jersey by visiting the New Jersey Department of Banking and Insurance website at http://www.state.nj.us/dobi/division_insurance/index.htm or calling them at (800) 446-7467.