Commercial General Liability Insurance In New Jersey Can Prevent a Possible Financial Disaster
Dan Levenson December 22, 2015
The state of New Jersey does not require a business to be insured under a commercial general liability policy. But it must also be understood that New Jersey has a reputation for lawsuit abuse, and the state’s liability laws make it less attractive for starting a new business.
If you own commercial property or other valuable assets, you would be wise to invest in sufficient commercial general liability insurance for your New Jersey business, limit your risk exposure, and prevent a possible financial disaster.
Most business owners who are searching for general liability insurance frequently ask some of the same questions, so we’ve whipped up some answers to save you the trouble:
Does my business need commercial general liability insurance?
Commercial general liability insurance protects business assets from claims for bodily injury or property damage. You should consider general liability coverage if you or your employees:
- Provide a product or service and interact with clients face-to-face,
- Have access to a client’s equipment,
- Represent your client’s business,
- Are required to have general liability under a contract.
It is very important to understand that general liability insurance will not protect you from everything. It will not cover you against claims of negligence, even if it isn’t your fault. Many professional businesses purchase other business liability, like professional liability insurance, along with general liability.
How much general liability should I carry?
Each business operation is different and each situation is unique, but the type of New Jersey business you operate or the products you manufacture should determine how much commercial general liability insurance you will require. A high-risk business or one that has a high degree of interaction with the general public should consider increased coverage.
A good rule of thumb for many small businesses is between $500,000 and $1 million. An exact dollar figure could more easily be reached in your discussion with a local commercial insurance agent. It is important to note that if you operate your business out of your home, your homeowner’s or renter’s insurance has limited business liability coverage and probably won’t be adequate.
I already have a Business Owner’s Policy (BOP), isn’t that enough?
The simple answer is: not necessarily. If your business is a small low-risk business, the liability coverage provided in a BOP may be adequate. It is important to understand that even though a BOP provides some liability coverage, it is often at a small limit and not really sufficient to cover the cost of possible claims or lawsuits. It is important to discuss the individual needs of your particular business in order to arrive at the proper amount of liability coverage needed.
I operate my business from my home; doesn’t my homeowner’s policy cover liability?
A standard home insurance policy will normally not provide liability coverage to protect your business from claims made by business visitors who are injured on your property. The type and amount of liability coverage needed will depend on several factors, including the number and frequency of visitors to your home office. Keep in mind that business visitors could include couriers and other delivery people, as well as customers.
A general liability policy sets maximum limits that an insurer will pay in the event of a covered claim, usually on a per occurrence basis. The business will be responsible for any amount that exceeds this maximum limit stated in the policy.
In today’s society, where lawsuits are on the rise, it is very important to understand the amount of coverage needed by your business, as well as, be familiar with actions the business can take to reduce liability exposure.
InsureYourCompany.com is proud to serve the insurance needs of New Jersey. Let us help you find the right insurance to meet the needs of your company and your employees. To become fully informed regarding your options, request a quote so we can find the best policies to meet your needs.