Deciding to open a small business in New Jersey is a huge decision that brings a lot of responsibilities with it. One of the most important factors that a business owner needs to take into consideration is insurance coverage. It is important that business owners have a sufficient amount of coverage in order to safeguard against any possible pitfalls that may arise. It might be difficult for someone to wade through all of the different options to decide exactly which types of insurance are the most necessary. Every small business owner in New Jersey should consider having the following types of insurance coverage.
General liability
General liability insurance serves as protection for the business owner in the event that someone is injured at the place of business. It also provides coverage if a product that is sold by the business injures someone. Business owners who choose to have general liability coverage should be sure to read the policy carefully as there are many exclusions with this type of insurance coverage.
Professional liability insurance
This insurance is also known as errors and omissions insurance. This type of insurance is important for every business owner because it protects an employer from issues arising from failing to provide professional services properly or at all. This type of insurance is particularly important for businesses that provide services such as professional firms, consultants, notaries, real estate companies, and beauty salons.
Product liability insurance
This insurance is essential for any business that manufactures a product that is sold to the general public. Even the most careful businesses can end up being sued for damages or losses due to product malfunction or some other issue. This insurance will protect the business in these instances and can even be tailored to be product-specific.
Business property insurance
This type of insurance is crucial for any business owner who owns the property the business is at because it covers damage that is caused by disasters such as fires. It also covers losses due to theft or vandalism. Forbes.com also suggests that even if a business owner does not own the property, property insurance should still be considered because it also covers damage or loss of office equipment such as computers as well as inventory and tools that are necessary to do business. It is important that business owners carry enough of this coverage to replace everything at the business location in the event of a total loss.
Business interruption/loss of earnings insurance
This type of insurance coverage protects the business owner in case the business cannot operate and make money for any reason. It is sometimes included on the business property insurance policy, but not always. So, it is important to read policies carefully and add coverage where necessary. Some policies only pay for the loss of earnings that are incurred while others pay for relocation costs if the business needs to temporarily move.
Business owner’s policy
This type of insurance policy bundles all of the necessary insurances together. It can be tailored to meet the specific needs of a business, but usually will include business interruption coverage, liability insurance, crime insurance, as well as vehicle and property coverage. Business owners often like this type of policy because it will cost them less than purchasing several different policies.
Worker’s compensation
Worker’s compensation is vital for any business owner who has employees. It provides any worker who is injured on the job with compensation to replace money that is lost by not being able to work. In return for receiving this compensation, the worker forfeits the right to sue the business over the incident that led to the injury. Although laws vary from state to state, most businesses are required to have worker’s compensation insurance if they have W2 employees. Failure to comply with this law usually has stiff penalties for the business owner.
Disability insurance
Disability insurance helps an employer compensate employees who are injured to the point where they are unable to work. This coverage goes above and beyond what federal disability programs will cover. Disability insurance allows workers to receive at least part of their salaries during the time they are unable to work. This type of insurance comes in both long and short-term varieties to suit the various needs of employers.
Data breach insurance
Data breach insurance is becoming increasingly important in today’s technological age. It protects an employer in instances where either a paper or electronic a data breach has resulted in a loss due to the exposure of private information of clients or employees.
Home-based business insurance
This type of insurance is a must-have for anyone who runs a business out of the home. Homeowner’s insurance policies cannot cover home-based businesses so additional insurance needs to be purchased to cover any equipment and inventory that is in the home for business purposes.
Umbrella liability insurance
Like other umbrella policies, this type of insurance is designed to fill in the gaps left of other types of insurance policies. It will help to assure a business owner is not left with excessive bills to pay due to a lack of insurance coverage.
There are so many different type of insurance that making the right choice can be overwhelming for a small business owner. Business owners in New Jersey should weigh all of their options carefully and make sure they have sufficient coverage to protect their business in case of unforeseen problems. They should also be sure to talk to a qualified professional to make sure all their business insurance needs are being met.
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