FAQ: What Does New Jersey Business Insurance Cover?

What does New Jersey business insurance cover?

I recently started my own business, and like any other business owner I’m concerned about all the possible risks. I need to get a clearer picture on all aspects of my business that are covered under my insurance policy. What does a standard New Jersey business insurance policy cover?

Business insurance is set up to protect business owners against potential threats. This goes for businesses anywhere in the country. There are four main components of standard business insurance packages that we’ll explain first.

• Workers’ compensation: Covers financial losses if your employees become ill, get injured, or die from a work-related incident. Depending on the type of work being performed, this coverage is mandatory in New Jersey. 
• General liability: Protects you against property damage or injury claims made by a third party. 
• Business auto: Protects any company vehicles against things like theft, vandalism, and damage from natural disasters.
• Property insurance: Covers loss of or damage to your physical property including your office space and often the inventory inside it. Protected mishaps include fires, storms, and more.

That’s the core of business insurance packages. However, there are many optional components you may choose to add on depending on the type of business you run and the extra coverage your operations may require. We’ll talk about just a handful of common add-ons.

• Cyber risk & privacy liability: Covers the loss or theft of customers’ sensitive data including credit card numbers and more. This coverage can also save your business in the event a deposit or money transfer is intercepted by cybercriminals.
• Employment practices liability: Covers fees for lawyers and other financial ramifications if any of your employees are involved in harassment cases against coworkers or customers.
• Boiler & machinery: Also known as "equipment insurance," it covers electric equipment in the building (e.g., AC units and boilers) that breaks down due to power surges, etc. Property insurance may cover this stuff, but not always.
• Professional liability:  Also known as "errors and omissions insurance," this coverage protects against claims made by clients who have suffered financial loss due to the work they've hired you for. This coverage is crucial for those who offer advice or consulting as part of their services.

The simpler your business, the fewer types of coverage you’re likely to need. We’ve really only scratched the surface here. If there’s an aspect of business out there that contains potential risk, rest assured that there’s a type of insurance coverage for it.

What does New Jersey business insurance not cover?

Well, all types of insurance come with listed covered perils as well as non-covered perils. Business insurance is no different. The two main perils not covered under business insurance are flood damage and earthquake damage. You’d need special flood insurance and earth movement policies in order to protect your business from damages and suspended operations caused by these types of disasters. Flooding is certainly a concern in New Jersey.

What are the benefits of New Jersey business insurance?

If you’ve worked hard to build and establish your business, you’re not going to want anything bad to happen to it. Of course disasters and tragedies can and do happen, so it’s important to be protected financially. Having appropriate business insurance coverage could mean the difference between your business going under or staying afloat following a disaster. Standard business insurance packages provide coverage for many common risks.

New Jersey business insurance typically provides coverage for the following perils:

• Fire and smoke
• Lightning
• Explosions
• Windstorms and hail
• Aircraft or vehicle damage
• Riot or civil commotion
• Vandalism
• Sprinkler leaks
• Building collapse
• Volcanic action
• Certain types of water damage

In addition to the specific covered perils, there are a handful of major reasons any business owner should get coverage. Here are the three main ways business insurance is helpful:

• Protection of your stuff: This includes your personal property, equipment, and your office building against things like theft and damage.
• Protection from legal consequences: You would be protected if any aspect of your business causes damage or bodily harm to a customer and you are sued.
• Protection from mistakes: You would be covered should you or your employees make a professional error that causes physical or emotional harm to the public.

Your New Jersey independent insurance agent can help you review your business insurance policy to answer any remaining questions about your coverage. They’ll also be able to help you figure out whether you’ve got enough coverage or if you should purchase more.