Businesses in New York City and elsewhere are constantly besieged with offers to purchase insurance coverage. Many business managers are aware of the need to purchase proper insurance coverage, but it can sometimes be difficult to strip away the sales pitch and only buy coverage that is needed for the business.
This post will attempt to provide brief descriptions of different kinds of business insurance and to provide an idea of which kinds of policies should be purchased by different kinds of businesses.
Legally required insurance
New York State requires every business with employees to carry workers’ compensation and disability benefits insurance. A business that owns one or more motor vehicles must have no-fault auto insurance. Many leases require the tenant to provide premises liability insurance. Many businesses rely on the expertise of a knowledgeable insurance agent to help them purchase the appropriate type and amount of insurance coverage.
Understanding the risks of the business
The key to buying adequate insurance is to carefully understand the risks of a business. A business that provides transportation services will have different risks and insurance needs from a store that sells men’s clothing.
Property insurance
This covers many risks ranging from fire, explosion and vandalism to storm damage to flooding. Many carriers sell “all risk” insurance that provides coverage for all assets of the business. Some of these policies also provide coverage for automobile and truck accidents.
Liability insurance
Liability insurance covers the company’s legal liabilities from accidents and other injuries for which the business may be liable.
Auto insurance
Auto insurance covers liabilities for physical injuries and damage to vehicles.
Workers’ compensation and disability insurance
These are, as noted above, required by New York law. Workers’ compensation provides coverage for any work-related injury suffered by an employee. Disability insurance for the owner of the business is often overlooked, but it can be invaluable if the owner suffers a catastrophic injury at work.
Business interruption insurance
This insurance protects the owner’s income stream if a fire or other catastrophe shuts down the business. It can cover employees’ salaries, taxes, rent and utilities.
Consulting an attorney who specializes in insurance
Insurance coverage can raise complex and important questions for any business. Anyone with questions about the coverage provided by a specific type of policy may wish to consult an attorney who is knowledgeable about various kinds of policies.