Every small business owner in New York, the third-largest state economy in the United States, needs business insurance to protect their financial assets. The Empire State requires workers’ compensation for all employees, whether they are part time or full time, and a commercial auto policy for businesses with a dedicated vehicle. Important policies to get include general liability and professional liability.
Simply Business is a digital broker that works in the state of New York and specializes in helping businesses with five or fewer employees find general liability, professional liability, and workers’ compensation. In minutes, you can tailor a quote in real-time and compare options from top-rated providers. Visit Simply Business today.
New York Business Insurance Requirements
Although not every type is required, there are certain New York business insurance coverage requirements to take note of in the state.
Workers’ Compensation
Since every state except Texas and South Dakota has some form of workers’ compensation insurance requirement, it is not surprising that it is required in New York. Its requirement is more stringent than other states as it does not have an employee threshold for when the requirement kicks in—it is required for all employees.
In addition, the requirement extends to all employees: full-time staff, part-time workers, family members, seasonal workers, and even unpaid volunteers. The workers’ comp requirement in New York extends to nonprofit entities too.
Workers’ compensation typically provides coverage for injured employees or ones who become ill because of their job. It helps with wage replacement, medical bills, and any type of treatment that will help the employee return to work. Plus, New York-based businesses must provide disability benefits for employees.
Commercial Auto
If your business has a dedicated vehicle for business or a personal one that is regularly used for business use, then you will want to ensure your policy is in line with the New York State Department of Financial Services requirements. These are:
- $25,000 bodily injury coverage per person
- $50,000 bodily injury coverage per accident
- $10,000 property damage per accident
- $50,000 personal injury protection
If you run a side hustle driving for a transportation network company (TNC) like Uber or Lyft, then you are required to maintain a policy with the above coverages, plus:
- $75,000 for bodily injury per person
- $150,000 for bodily injury per accident
- $25,000 for property damage
- Your policy must also carry uninsured motorists (no specified amount).
The above coverages apply when you are logged into the TNC. If you are driving for a pre-arranged trip, then the required coverage amount increases:
- $1,250,000 for supplemental uninsured motorists
- $1,250,000 for bodily injury, death, or property damage
Most importantly, the policy must recognize that you drive for a TNC using the listed vehicle. This is legal speak reminding the driver that unless their personal auto policy specifically states it provides coverage while driving for a TNC, or they have purchased an endorsement, then the personal auto policy most likely is invalid for this type of operation, so they’ll want to purchase a commercial auto policy.
General Liability
While New York does not require general liability insurance statewide or for every small business owner, some local municipalities may. General contractors must carry general liability with a minimum coverage of $1 million per occurrence and $2 million aggregate.
General liability is sometimes referred to as a commercial general liability (CGL) policy. It is called “general” because it has broad coverage for your business for third-party claims in these areas:
- Bodily injury
- Property damage
- Personal and advertising injury
In most states, including New York, providers will include other helpful coverages with general liability, such as damage to a rented premise and product liability.
Other Types of New York Small Business Insurance
Beyond the required coverages, there are other policies to consider, especially if it applies to your business’ nature of operations.
| Type of Coverage | What It Covers |
|---|---|
| Professional Liability | Claims of financial harm or loss as a result of advice or failure to perform a contracted service made by a third party |
| Business Owner’s Policy (BOP) | A combination of general liability, commercial property, and usually business lost income |
| Commercial Property | First-party coverage for property owned, typically fixed property or contents |
| Inland Marine | First party covered for tools and equipment |
| Commercial Umbrella | Excess liability coverage that provides additional limits |
| Cyber Liability | First- and third-party coverage for losses related to data breaches, hacking, or other cyber-related losses |
| Employment Practices Liability Insurance (EPLI) | Protects small business owners from claims of wrongful termination or other harmful employment practices |
This policy is commonly referred to as errors and omissions (E&O) insurance and is more focused on the service sector. In New York, this is very important coverage because of the sheer volume of small businesses engaged in the professional services sector. According to the Small Business Administration (SBA), there are 335,074 small businesses engaged in professional, information technology (IT), and scientific services. This is the largest sector of small businesses. Of this number, 277,768 have no employees.
Professional liability protects a business from claims of negligence in advice or adhering to a contract, as opposed to the more general liabilities of a CGL. For example, if someone claims you gave them bad financial advice or failed to deliver on a contract, this insurance is what you would turn to for help. If you own a financial planning or architecture firm in New York, this is a policy you should consider.
A BOP is a great option for New York small business insurance because it combines general liability and commercial property. Usually, insurers will include a third coverage called business income insurance.
For most providers in New York, businesses with revenue under $5 million or fewer than 100 employees are eligible for a BOP. It is usually more affordable to bundle the policies than to purchase each one separately, and the BOP offers the convenience of having one policy for multiple types of coverage.
Commercial property is a first-party coverage, meaning it is for your property and not someone else’s. If you own a building, have a rented office space with furniture, or have a warehouse full of inventory, this insurance is something to consider.
On commercial property policies, losses are usually handled on a named-peril basis, and coverage is typically limited to the listed location. This means the types of losses covered are described in the policy and are only associated with the listed location. For example, the policy may say that fire, theft, or vandalism are covered losses at a specific location, but wear and tear of the office coffee machine and the printer are not covered.
If you are a New York business owner working in an industry with tools or equipment—like a painter, contractor, or handyperson—you’ll need to look into inland marine. This is a first-party coverage similar to commercial property. However, while commercial property is limited to a listed location, inland marine insurance “travels” with the tools and equipment.
If you are working at a job site and an expensive piece of equipment is stolen, then you would file a claim on your inland marine policy. Some providers will provide blanket coverage for tools and equipment, and others will have you list or “schedule” each individual item on the policy.
A commercial umbrella policy is an excess liability policy. If you work in a riskier industry and are concerned that the limits on your general or professional liability policy may be insufficient, a commercial umbrella policy can be purchased. The policy’s limits would not come into play until the limits of the other policy are exhausted.
For example, you have a general liability policy with a limit of $2 million and a commercial umbrella policy with a limit of $1 million. Once the general liability policy of $2 million is exhausted, you could file a claim for the additional $1 million in coverage from the umbrella policy.
Despite the “liability” part of the name, cyber liability insurance is similar to a BOP and is usually divided into first and third-party coverage.
- First-party cyber liability helps with the expenses you face from a data breach, including investigating and notifying anyone impacted.
- Third-party coverage is a type of liability that can help protect your business if customers decide to sue you over negligence. In the event of a data breach, your business may be subject to fines and penalties from the government or private entities. This part of the policy can also help with those fines.
EPLI is important for protecting your business against claims of wrongful termination, hiring, and employment practices. Examples of an EPLI claim include sexual harassment and gender discrimination.
New York Small Business Insurance Costs
Costs for New York business insurance vary widely depending on the industry and size of the company. We obtained sample quotes from a variety of different brokers and carriers. All of them were for companies with three employees and an annual revenue of $250,000. These quotes were gathered from New York City, Albany, and Hudson.
| Industry | Estimated Annual Premium | Coverage Type | Coverage Amount |
|---|---|---|---|
| Handyperson Service | $4,460 to $15,000 | General liability | $1 million per occurrence and; $2 million aggregate |
| Photography Service | $100 to $1,280 | General liability and professional liability | $1 million per occurrence, $2 million aggregate, and $1 million in professional liability |
| Restaurant | $6,150 to $13,650 | BOP | $1 million per occurrence, $2 million aggregate (including liquor liability), and $40,000 in kitchen equipment |
| Landscaping | $4,000 to $4,300 | BOP | $1 million per occurrence and $2 million aggregate (including $10,000 for tools and equipment) |
There are a number of factors that providers consider when evaluating premiums. Some of these are:
- The geographic region within New York, including the specific county
- Yearly revenue and payroll
- Claims history
- Risk management and training
- Business experience
- Prior insurance history
How To Get New York Business Insurance
There are several options available when looking to get commercial insurance in New York.
Provider
Insurance policies are underwritten and serviced by an insurance company or carrier. This is true whether you use a broker or an agent. There are providers that work directly with consumers and generate quotes online which you can then purchase, and there are others that take a multifaceted approach by offering insurance online and selling through agents. Finally, there are providers that only sell insurance through agents.
Agent
An agent works for the insurance company and helps connect the carrier with prospective policyholders. Some agents are captive agents and only sell insurance for one insurance company. Others are called independent agents and work with multiple companies.
For instance, State Farm is a provider with many captive agents. Meanwhile, Liberty Mutual is a carrier that works with independent agents.
Broker
A broker is like an agent—except the broker works on behalf of the customer and not for the insurance company. Usually, a broker will work with many different carriers and provide insurance advice to the client while helping them find the best option for insurance.
New York Small Business Statistics–Why Insurance Is Important
New York, with a population of around 19,677,150 people, is the fourth-largest state in the US. However, it has the third-largest economy in the US, generating $1.6 trillion in gross domestic product.
Breaking down its immense economy, you can see that New York’s primary drivers are small businesses:
- There are 2.3 million small businesses with 4.1 million employees.
- This represents 99.8% of all New York businesses and 48.1% of all employees.
- Exports by small businesses totaled $25.7 billion in export goods.
- Out of a total of 31,887 companies involved in export, 29,695 are small businesses.
These figures show why New York small business insurance is important—it helps all of these businesses run smoothly, regardless of the risk of losses due to storms or theft. It also protects their assets when allegations of negligence are made by a third party.
Frequently Asked Questions (FAQs)
Yes, workers’ compensation is required in New York. It is required for all businesses regardless of the number of employees and their employment status (full time or part time).
General liability for a handyperson in New York can range from $4,400 to up to $15,000 annually. A small family restaurant can purchase a BOP for around $6,000 to $13,000.
In 2022, there were 2.3 million small businesses representing 99.8% of all businesses in New York.
Because insurance is not regulated federally but left to each state, the specific department that handles insurance can vary depending on the state. In New York, the Department of Financial Services provides supervision and regulation for all insurance lines.
If you have problems with your carrier, whether it is a claim or policy administration, you can file a complaint with the New York State Department of Financial Services (DFS). The DFS encourages you to begin the process by filing a complaint online through its website. However, you can call (212) 480-6400. Its hours are Monday through Friday from 9 a.m. to 5 p.m. Eastern time.
Small businesses in New York typically have fewer than 20 employees. Out of the 2.3 million small businesses in New York, 2,223,758 have between zero to 19 employees.
Bottom Line
Since statehood was granted in 1776, New York has been at the center of the US economy. The primary driver for its strong economy is small businesses—with these entities making up over 99% of all businesses in the state. Workers’ comp is required for all businesses with an employee, and commercial auto is required if your business has a vehicle.
Simply Business is a broker that can quickly help your small business get the right coverage at an affordable price. Get a free, no-obligation quote in minutes.
