What is Essential?
New York business owners, what are the essential insurance coverages you need for your business? How do you get those policies? And, how do you make sure they’re right? In this article, I’m going to explain that process and give you a brief overview of my thoughts on how using a skilled insurance broker will help simplify your life.
Hi, I’m Gordon Coyle, welcome to my blog where we talk about the risk and insurance issues on the minds of business owners. As an expert business insurance broker, I believe these videos are intended to help guide and educate decision-makers to help you become a more informed insurance buyer. If I don’t answer the question on your mind that brought you to this page, reach out, and let’s connect. I’d love to hear from you.
Alright, let’s start by describing what business insurance is. Business insurance is a collection of policies and coverages you can purchase to protect you and your business from various risks. It is not one single policy, but in many cases, many of the coverages we’ll talk about can be combined into one package from one insurer for efficiency and ease of handling.
New York is home to over 2 million small businesses, and while business insurance isn’t legally required in most cases, some coverages are mandatory. For example, if you have employees, you must have workers’ compensation insurance and statutory DBL, which is short-term disability insurance. And if you own vehicles for business use, you need commercial auto insurance.
Business Insurance Essentials in New York
So, let’s break it down into the business insurance essentials and the optional types of coverage New York business owners need to consider.
1. Business Owners Policy or BOP
In most situations for small and medium-sized businesses, a BOP or business owner policy can combine general liability insurance, property insurance, business interruption insurance, and a whole bunch of “fringe” coverages into one policy.
General Liability protects you from lawsuits that allege bodily injury or property damage and even personal injury claims like libel and slander.
Property insurance will protect your buildings if you own them and your business personal property or contents from fires, theft, and vandalism.
Business Interruption insurance protects your cash flow if a fire or other covered peril forces you to temporarily close your doors. This part of the BOP will pay your ongoing operating expenses and lost profits during your restoration period.
Finally, I mentioned fringe coverages, and each BOP will differ here in the limits and types of coverage, but this section of the policy includes important crime coverages and other extensions needed by most small businesses.
2. Workers Compensation Insurance
Workers comp, as it’s known, is mandatory when you have employees, and it covers the medical expenses and lost wages for employees injured on the job. Many small businesses purchase workers comp through their payroll provider or a PEO. While this is often efficient from a time-saving perspective, we have found problems here with misclassifications of employees, removing coverage for owners, and other issues that are costly and could be avoided by having an insurance professional handle them.
3. DBL or Disability Benefits Law Coverage + Paid Family Leave
This coverage is also mandated for New York employees and it protects a portion of your employee’s wages when they are injured OFF the job. Basic coverage is limited, but optional higher-wage replacement coverage is available at affordable premiums. It also includes mandatory PFL or Paid Family Leave Act benefits.
4. Commercial Auto Insurance
If your business owns vehicles, the state mandates covering you for potential lawsuits that often arise from accidents and for physical damage to your vehicles. If you don’t own vehicles, an endorsement known as a non-owned and hired automobile should be added to your BOP policy to protect your business entity from claims that can arise from using personal autos on business operations.
5. Cyber Insurance
A few years ago, I might have thought that cyber insurance would have fallen into the “recommended” category of policies, but today, it is a required form of coverage for businesses of all types and sizes. The constant threats of cyber intrusions, cyber crimes, and disruption make this essential protection.
6. Professional Liability
Finally, in the required or essential category is professional liability insurance, also known as E&O Insurance if your business offers professional services to others. That could be in the form of a consultant or any known professions such as engineers, architects, accountants, lawyers, and many other professional services to cover you from claims alleging an error, omission, mistake, or negligent act in rendering your professional services.
Alright, let’s move on; whether this is your first time buying insurance or if you’re approaching a renewal of your insurance, here are a few more options to consider:
7. Commercial Umbrella Insurance
Commercial Umbrella, as its name implies, provides an extra margin or layer of protection over and above your general liability, auto liability, and employer liability (a part of your worker’s comp policy). It does not provide extra protection over cyber, professional or employment practice insurance.
Commercial umbrella insurance gets you the biggest bang for the buck and is highly recommended.
8. Employment Practice Liability Insurance or EPLI
EPLI is a form of coverage that protects the company and its leaders from claims alleging wrongful employment acts such as harassment, discrimination, failure to hire, wrongful termination, and hostile work environment. As a company grows its headcount, the more important EPLI is going to be to protect you from high-cost lawsuits.
Other Business Insurance Essentials – Options
Then you’ve got options such as D&O, Environmental, inland marine, product recall insurance, and many other coverage forms you can read about on our website.
So how do you choose which policies are right? And, how to get the business insurance essentials correct?
That’s where the role of the skilled broker is to help design an insurance program customized to your needs and issues. Beyond just insurance are risk management issues that a good broker can also help you with.
That leads us to the question of:
How To Choose the Right Insurance Provider?
If you’re looking online and searching for business insurance in New York, you will get thousands, if not millions, of responses in Google. So, how do you choose the right provider?
I did a video on this, which you can view here .
I, of course have a bias and think that working with an independent agent or broker is your best choice, because I am one. But let me explain.
Three Routes
There are three different routes or providers you can go with.
Provider Type | Pros | Cons | Notes |
Direct Sellers -Captive Agents | Efficient and Fast | Only one company, no options, sometimes they don’t sell what you need. Often, call center experience – no relationship | Big Names like Hartford, Geico, State Farm, Progressive, Allstate |
Insure-Tech Firms | Fast, tech-enabled buying | Often, no human involvement or expertise, a lack of customization, and only a handful of policy types are sold. | These are often firms you’ve never heard of before and some may lack financial stability. |
Independent Agents & Brokers | Entrepreneurial business owners who access multiple insurers to find you the best fit, and often provide expert advice and guidance. Relationships are key to independent Agents and Brokers. | At times can be slower and more time consuming. | Finding the right independent agent to do business with may take effort as each firm is different from each other. |
Direct doesn’t mean cheaper
One big point to make here is that going direct doesn’t mean cheaper. That’s simply not true regardless of the millions of dollars of advertising direct sellers spend trying to convince you that they cut out the middleman and you save. Not true.
As an independent agent and broker, I do of course hope you’ll reach out to us at The Coyle Group as part of your selection process and see what we have to offer as well.
What is the Cost of Business Insurance in New York?
You’ll see many websites that say that the average cost of a business owner’s policy will be “X” – but that’s a throwaway number. Your industry, business size, coverage limits, location, claims history, and other factors will determine what you’ll actually pay, so don’t be fooled by average costs, as those numbers don’t mean anything.
The only way to find out what it will cost is to talk to a skilled broker, like The Coyle Group, as I mentioned earlier, where we can outline a plan for the coverage elements you need, and then we can find you the right combination of coverages and price.
To wrap this up, having the right business insurance is crucial to protecting your New York business. Who and how you get that coverage will determine the accuracy of that protection, but it’s also up to you to review your policies regularly and update them as your business grows. That means periodically conversing with your broker as things change in your business. I know we love to hear from clients when they want to make adjustments and ask questions.
If you have any questions I didn’t answer here, or you’d like to talk to us about engaging The Coyle Group as your broker, we’d love to hear from you. Hit that “Get Insured” button to get started!
Gordon Coyle is The Coyle Group’s CEO and a seasoned business insurance expert with over 40 years of experience and four professional designations. He specializes in helping businesses with 25 to 1,000 employees navigate the complexities of risk and insurance, from cyber insurance to D&O protection and everything in between. Gordon is passionate about providing tailored solutions that protect businesses, their owners, and their futures.
Need guidance on your business insurance? Contact Gordon for help!