Obtaining Small Business Insurance: New York State Requirements

Don’t operate a small business in New York without knowing the state’s insurance requirements. Without proper coverage, your business could be vulnerable to the high costs associated with lawsuits, criminal activity, property damage and injuries. You could also face fines and other legal consequences for failing to maintain required coverage.

Commercial Liability Insurance Requirements in New York

Certain professions require a professional license, and some professional licenses require insurance. These requirements will vary from state to state, and even from city to city and county to county, so it’s important to research the requirements for the area where you do business. If you move or do business in multiple locations, you will need to comply with the requirements for each area.

To determine your licensing requirements in New York, check with the Department of State’s Division of Licensing Services, which oversees licensing requirements for 35 occupations in the state. Also check with the city or county.

For example, in New York, construction work typically requires a contractor license issued by the relevant city or county. These cities and counties may require insurance in order to secure a license. Buffalo, for example, requires general liability coverage with a minimum limit of $50,000 to $2,000,000, depending on the category of contract work.

Commercial Auto Insurance

All registered vehicles in New York must be covered by auto liability insurance. This includes vehicles owned by a business. The minimum auto liability insurance requirements in New York are:

  • $10,000 for property damage
  • $25,000 for bodily injury and $50,000 for death of one person
  • $50,000 for bodily injury and $100,000 for death of two or more people in a single accident

To protect your company’s assets, you may want higher limits and additional coverage types. Because personal auto insurance typically excludes commercial activity, it’s important to carry hired and non-owned coverage for vehicles that are owned by employees but used for business.

Cyber Requirements

The NYS Information Security Breach and Notification Act establishes requirements for data breach notifications. If your business operates in New York and you own or license computerized data that includes private information, you must notify New York residents impacted by a data breach.

Notifying individuals of a breach can be costly. Business may also face additional expenses, such as the cost of credit monitoring for data breach victims and legal costs if a lawsuit is filed.  Although cyber insurance is not be legally required, it can protect businesses from these costs.

Insurance Requirements for Employers

If your business has employees, you will need additional insurance coverage.

Some employers are legally required to offer benefits, although these requirements typically focus on large employers. For example, under the ACA, applicable large employers are required to offer affordable health insurance to full-time employees. States and cities may establish additional requirements. In New York City, employers with at least 20 full-time employees must offer transportation benefits. Like other states, New York requires employers to carry workers’ compensation insurance.

Other types of insurance may be recommended even if they are not legally required. This includes employment practices liability insurance, which protects businesses against claims of discrimination, harassment and wrongful termination.

Additional Requirements

In addition to the state laws, the contracts you sign may require your business to carry certain types of insurance coverage. For example, commercial lease agreements often require property and general liability insurance. A client may also require liability insurance before agreeing to do business with you.

Need small business insurance in New York? Get a quote here.

Sources
  • https://www.dos.ny.gov/licensing/

  • https://www.buffalony.gov/DocumentCenter/View/2416/Contractor-Application-?bidId=

  • https://dmv.ny.gov/insurance/insurance-requirements

  • https://its.ny.gov/breach-notification

  • https://www1.nyc.gov/site/dca/about/commuter-benefits-FAQs.page

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