What Types of Insurance Should My Business Purchase to Be Fully Protected From Risk?

The State of New York requires three specific types of insurance coverage for every business with employees: workers’ compensation, unemployment and disability. All other commercial insurance plans such as general property and liability are optional; however, most companies will want to make sure to include these coverages to fully protect themselves from the risk of lawsuits, property damage and consumer product liability. Also, companies with commercial vehicles must have commercial auto insurance policies with appropriate liability coverage.

New York Liability Coverage
General liability policies protect the assets of New York businesses. Even if a business prides itself on providing superior service and products, clients can always sue the company if they feel they have been wronged or injured in some way. Business liability policies protect a company’s assets should they be sued for property damage or personal injury.
Three main types of business liability insurance exist to provide the right protection that companies need: general liability, professional liability and product liability.
· The general liability insurance policy is basic coverage to protect companies from claims of injury, property damage and even false advertising claims. Most businesses will only need this type of coverage.
· Professional liability policies, also known as errors and omissions coverage, protect individuals and companies from claims made for negligence or malpractice. This coverage is necessary for attorneys, medical facilities, investment planners and real estate agents/brokers.
· Product liability insurance protects businesses that make or sell products to consumers. This insurance covers any claims made by people who have been injured from using a company’s product(s).

Workers Compensation Coverage
All businesses with employees in New York must maintain continuous workers’ compensation insurance to cover workplace related illnesses or injuries. Exemptions from the workers’ comp coverage requirement are very limited and apply to only two situations:
1) Sole proprietors or partnerships without any employees, volunteers or subcontractors and
2) Corporations with all stock held by one or two corporate officers and no employees, volunteers or subcontractors.
Self-insurance options for workers’ compensation insurance do exist as well. Employers who do not comply with the mandatory requirements of carrying workers’ compensation insurance can be penalized $2,000 for each 10-day non-compliant period, and board assessments can be added as a penalty. In addition, a monetary award may be granted to an employee for medical costs and wages.

New York Disability Benefits
The State of New York requires all employers to provide disability coverage for employees for off the job injury or illness. This insurance provides a cash benefit to workers when disabled in order to partially replace lost wages. These benefits only cover cash payments, not medical care, and are calculated at 50% of a worker’s average weekly wage with a maximum of $170 per week. The duration of benefits is for 26 weeks, with a seven day waiting period, and companies are required to provide a form called the Statement of Rights under the Disability Benefits Law for anyone disabled for more than 7 days.
Business owners are also allowed to offset the cost of providing disability benefits by collecting employee contributions at a rate of ½ of one percent, but not more than sixty cents weekly.
Out of state employers are required to carry both disability and workers compensation insurance if they employee one or more workers within a 30 day calendar period.

Property Insurance
New York business owners seeking adequate coverage for their companies will want to make sure to include commercial property insurance in their coverage plans. Many companies have business owner policies that provide some property coverage; however, many exclude certain perils and losses such as weather damage from wind, hail or fire as well as theft or vandalism. Property insurance can cover not only the business structure itself, but also all of its contents. In essence, businesses can insure furniture, equipment, and inventory from potential loss or damage. Should something happen to their property it will be replaced and the business will stay operational.

Commercial Flood Insurance
The National Flood Insurance Program generally issues New York commercial flood insurance. The flood insurance covers damage from overflow of waters, rapid accumulation of runoff water from any source or collapse of levees or dams. This federally backed insurance coverage covers up to $500,000 for a business building and its contents.

Windstorm Coverage for New York
The New York State coastal areas are considered by many insurers to be a high-risk area for wind and hail insurance coverage. This specialty insurance is available to New York property owners through the state sponsored wind storm insurance pool, and each insurance company offers different policies with differing deductibles and claims handling. Consult your insurance broker to learn more about the windstorm insurance options available for your business.

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