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Owning a small business isn't easy no matter where you decide to put down roots, and the "Empire State" is no exception.
When working to protect your business, it's understandable that you'd want to take every measure possible to guard against risks. After all, you work too hard to have things fall apart!
Getting business insurance is one of the 9 suggested steps to take when starting a business in the U.S., but the process is different in each state. In this article, we'll review what you need to know regarding New York business insurance, how it may benefit you, and how to get it.
You already may be familiar with insurance when it comes to protecting things like your car, your health, or your home, but when it comes to your small business, things are a bit different.
There are various types of insurance available to protect your business, and we'll review recommendations and requirements for New York business insurance.
By the end of this article, you'll have a better understanding of how to make the best decision about coverage for you and your business.
General liability insurance is most likely the insurance you're thinking of when you hear "business insurance."
With this type of liability coverage, your business is protected against a variety of things that could put it at risk, such as:
If you can't see how any of the above could impact your business, it’s certainly understandable. These phrases are common insurance terminology, but in reality, business owners are focused on their specific business and how things apply to them.
I'll review some scenarios for specific businesses below so you can see what I mean.
You're a carpenter working on a new backyard deck for a family. At the end of the work day, you pick up your tools and caution the homeowners, advising them to stay away from the deck until it's finished.
But your customer walks around the deck inspecting your progress and steps on a nail you didn't realize fell out of your toolkit. The nail punctures their foot and they have to go to the ER.
Your New York general liability policy could help cover your customer's medical treatment (up to your policy limit).
You're a tree removal specialist and are completing a project helping to clear brush out of a customer's backyard. While taking branches out to your truck, you don't realize that a branch scrapes the customer's brand-new car, leaving a large scratch. Your client sues you.
Your New York business insurance could help to cover the cost of repairs to the car, as well as associated legal costs of the case (like hiring a lawyer).
You're a window cleaner working at a historical museum. While cleaning, you accidentally break a window. Because of the building's age, the cost to replace the window pane is expensive, and your client isn't happy.
They sue you for the cost of the glass replacement.
Having general liability insurance in New York could help cover the cost of any legal representation you may need, as well as the cost of the replacement window pane your client is insisting you cover (up to your policy limit).
Maybe after reading about these hypothetical incidents, you still can't imagine what a claim against you would look like, especially since you're always so careful.
And we don't doubt that you are! But remember — you don't necessarily have to have done something wrong for a customer to file a claim. When it comes to civil lawsuits, 43% of small businesses have been threatened with or involved in one in some way.
Let's look at the cost of a few of the most common claims filed against small businesses:
Imagine trying to pay any of the above claims out of pocket. Sure, you try to avoid accidents as best as you can, but the peace of mind of being covered is priceless.
While you're not legally required to have general liability insurance in New York, there are many other benefits to getting New York business insurance coverage. A general liability policy can help you:
When potential customers are deciding which business to hire for a project, it may help sway them in your favor to know that you cared enough about the protection of your work to get business insurance.
Similarly, it may help existing customers feel even more at ease about working with you in the future, knowing that your good work is insured with general liability coverage.
At some point in your journey as a business owner, you may decide to seek funding. Depending on the organization, you may be required to show proof of insurance to apply for a loan, grant, or other type of financial assistance.
If you aren't required, it may help your application to be seen more favorably because you've taken steps to protect yourself against financial risks.
Taking care of a business and the space you run it in is a lot of work. With that upkeep comes risk, and some landlords may ask to see proof of insurance before they enter into a lease agreement with you.
General liability insurance in New York comes in handy for many business owners, but there also are a lot of potentially risky situations that involve less tangible incidents. We'll talk about that more in the next section.
Not all incidents are as tangible as, say, a customer's broken wrist, but in the cases that aren't, you may be able to rely on professional liability insurance in New York.
Professional liability insurance is coverage that protects you in case a client sues you, claiming negligence or that the work you did led to financial harm.
Professional liability insurance in New York can come in handy in many different situations. We'll review some scenarios below:
A travel agent helps a couple book their honeymoon vacation to Europe. The couple is excited and they reach their destination without issue. However, when they arrive at their hotel, their reservation isn't on record and there are no open rooms. They have to scramble at the last minute, jetlagged, to find a place to stay — and the one they secure is out of their budget.
They sue the travel agent, demanding to be reimbursed for the cost of the hotel they had to stay at, which wasn't the experience the travel agent presented.
Professional liability coverage could help to cover the cost of a lawyer to help defend the travel agent. Without it, they may have to pay that expense out of their own pocket.
An education consultant was hired to tutor a high school student to help him get into his dream school, where his parents are alumnus. The consultant tutors the student for the SATs and he scores in the top percentile on the exam.
But the student's parents discover later on the school’s application, that his dream school requires both the SAT and the ACT. The consultant didn't find this in their research, so the student wasn't properly prepared to apply.
The student is rejected by default, and the parents sue the education consultant, blaming them for the student's rejection. Having professional liability insurance in New York could help to cover the cost of any legal fees associated with the lawsuit.
An accountant prepares and files the income taxes for a new client and things go smoothly. Later, the client’s company is audited by the IRS and fined. The client was audited for a year that the accountant wasn't given information about, but the client still sues the accountant for the money owed to the IRS, claiming the accountant should have known and advised them.
Professional liability insurance would help cover any of the legal fees associated with the case, as well as any money the accountant is ordered to pay the client (up to your policy limits).
You'll notice that the scenarios we've covered so far in this guide have involved small business owners and their clients. But what about situations between a business owner and their employees?
Don't worry — we're about to get into what you should know about New York workers compensation insurance.
If you have any employees — even just one — you're required to have New York workers compensation insurance.
This type of insurance protects your employees in the event they get sick or injured while working for you.
We'll go over this in depth later on, but first, we'll review a few other types of New York business insurance you'll want on your radar.
You may have car insurance for your personal vehicle, but if you use it for any sort of business-related task, you may need commercial auto insurance.
If you're using a vehicle for construction purposes, to make deliveries, or even to make client visits, then you should consider looking into commercial auto insurance.
If you run your business out of a rented commercial property, there's a chance your landlord may request proof that you have property insurance coverage. This type of coverage would help to cover the cost of damages in case of vandalism, fire, windstorms, and other disasters.
Keep in mind that if you run your business out of your home, you may need home office property insurance, as your regular home insurance policy may not cover work done out of the home.
If you use any heavy equipment or expensive tools in your job, it may be worth looking into this type of coverage. Having a business personal property policy could help to protect you if your tools or equipment are stolen or damaged.
If you're a contractor in New York, be sure to do extra research to make sure you're fully protected.
You're required to get a contractor's license in New York, but the process for getting one may differ, depending on your county or state.
For example, contractors in New York City are required to show proof that they have a general insurance policy with a minimum limit of $1 million. However, in Nassau County, it’s not required when you apply for your license.
If you're coming from another state to do work in New York, like from New Jersey or Connecticut, then you need to double-check to make sure your policy covers you in all locations.
Back to workers compensation insurance in New York. Remember how we mentioned that even if you have one employee, you're likely required by the state to get New York workers compensation insurance?
Well, the requirement spans several different employment situations. The requirement for workers compensation coverage applies to you if you're a business owner who:
You are also likely required to have workers compensation coverage for your employees if you work with:
If you have other questions about whether or not a person is considered an employee under New York workers compensation law, you can refer to this website.
If you're wondering how New Jersey workers compensation plays into your New York business insurance coverage, you can find more information here.
We've talked about what New York business insurance is and how it benefits your business, but how much does that protection cost?
The cost of business insurance in New York will depend on different factors, such as:
Depending on which insurance policies you decide to get for your business, your monthly premiums will range. At Simply Business, for example, our monthly premiums for general liability coverage start at $29.95/month*.
Of course, just as with any business decision, we encourage you to shop around and see which coverage best fits your needs. You can compare quotes from the nation's top providers for FREE with our quote comparison tool.
You may not be ready to purchase your coverage today, but exploring your options will give you an idea of your premium cost. Knowing what cost to expect can help you build the cost of your policy into your business's budget.Get your quote
Luckily for business owners across the state, getting New York business insurance has become way more accessible, thanks to the internet.
Once you decide you're ready to get business insurance, here are a few steps you can take to make sure you find the right insurance coverage — including workers compensation insurance — for your business:
Talk to other business owners in your area and industry to learn about their process of getting business insurance and any risky situations they may have encountered.
Check here to learn more about business insurance for your specific occupation and to see examples of when coverage may come in handy.
Know what coverage you're legally required to have. While many occupations don't require New York business insurance, we do recommend considering getting coverage to protect your hard work.
Shop around to get a good idea of your options for monthly and/or annual premiums. Take time to work this cost into your business's budget and business plan to see how it may impact other expenses.
Download your Certificate of Insurance (COI) after you buy your policy so you have proof to show potential and existing customers that your business is insured.
Remember, this guide is one stepping stone in your research. We encourage you to do more research on your industry's specific coverage requirements. You also can refer to this easy guide on getting business insurance to learn more.
If the process of getting New York business insurance is overwhelming for you, you're not alone. Owning and operating a business takes a lot of time and energy.
Hopefully, this guide helps you feel more confident about your ability to choose the right coverage to protect you and your business.
Getting insurance coverage for your business is just one of the challenges you may face as a business owner, though. For more info on growing and protecting your business, check out our blog, Simply U.
*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.