New York General Liability Insurance Guide

If you own a small business in the Empire State, this information will help you understand New York Commercial Liability insurance and protect your business and your personal assets from legal claims and settlements that can spell financial ruin. Whether you live in Rochester, Buffalo, Manhattan, Long Island, Syracuse or Albany, having sufficient general liability insurance is an important part of any small business plan in New York.

Fast Facts About New York Small Business

A small business is defined as any company with fewer than 500 employees. Of New York’s nearly 2 million small businesses in 2008 (the latest data available), 440,510 were small employers. Another 1,546,788 were one-person operations with no employees.

Source: SBA New York Small Business Profile 2006.

About Commercial Liability Insurance for NY Businesses

Commercial liability insurance (also called business liability insurance and commercial general liability insurance) protects your New York business from financial loss resulting from claims of injury or damage cause to others by you or your employees. A policy typically covers:

• Bodily Injury – physical damage to a person other than an employee at your place of business and injuries caused by you or an employee at a client’s home or work place.
• Property Damage – damage caused by you or an employee to someone else’s property.
• Personal Injury – libel, slander, copyright infringement, invasion of property or privacy, wrongful eviction, false arrest and similar acts that cause damage to a person’s reputation or rights.
• Advertising Injury – losses caused by your advertising
• Legal Defense and Judgments – costs to defend against real and frivolous suits and judgments up to the limit of your coverage. Note this generally does not include punitive damages for negligence or willful misconduct.

New York Minimum Business Insurance Requirements

Commercial Liability Insurance is not mandatory for businesses operating in New York. While there have been recent calls for tort reform, New York does not currently cap awards for personal injuries, although it does follow a pure comparative negligence system that reduces the amount awarded by percentage of fault. Accidents and lawsuits do happen in the Empire State. If you own property or other valuable assets you would be wise to invest in sufficient commercial general liability coverage for your business to limit your risk exposure.

How Much New York Liability Insurance Should You Carry?

Each situation is unique, but as a general guideline, the type of New York business you operate or products you manufacture should determine how much New York commercial general liability insurance you need. A good rule of thumb for most small businesses is between $500,000 and $1 million. However, if yours is a high-risk business such as the building trades or has a high volume of interaction with the public such as a retail business, you should consider increasing your coverage. Note that if you operate out of your home, your homeowner’s or renter’s insurance has limited coverage for business liability and loss.

How Are Premium Costs Assessed?

New York commercial liability insurance premiums are based on a number of factors including the types of service or products you provide, the number of people you employ, how long you’ve been in business, and your claims history. Coverage is typically capped at a specific dollar amount for your policy period.

Other Insurance to Consider for Your New York Small Business

• New York requires that anyone who employs at least one person, whether full or part time, carry workers compensation insurance. Sole proprietors, partners, and one/two person corporate officers with no employees are not required to carry workers compensation. While general contractors are not required to carry workers compensation, they can be liable for claims filed by employees and would be wise to require sub-contractors to provide valid proof of workers compensation insurance.
• New York mandates that employers provide employee disability coverage to provide disability income for employee off-the-job illness or injury for up to six months, starting on the seventh day of an illness or injury.
• New York requires that all drivers carry minimum automobile insurance. If you use your car or truck for business, it is recommended that you purchase a commercial vehicle policy.

• Employee Disability Insurance
• Business Owner’s Policy (BOP)
• Errors & Omissions (E&O)
• Employment Practices Liability Insurance (EPLI)
• Professional Liability
• Product Liability
• Commercial Property Insurance

Regulating Agency and References

New York Department of Financial Serivces
This agency is responsible for regulating all insurance policies sold in the state, including commercial liability coverage.