New York Commercial Insurance

Commercial insurance is also known as business insurance. It is the type of insurance that protects a business from financial losses. In New York, commercial insurance policies offer property, liability, and life coverage. With over 2.3 million businesses employing nearly 10 million New York state residents, small businesses (SMBs) and larger corporations purchase commercial insurance policies to protect their investments against future losses. In New York, the state’s Department of Financial Services (NYDFS) regulates all forms of insurance business in the state, including commercial insurance. Companies have a wide range of options when choosing commercial insurance policies for their use. Businesses can customize their commercial insurance policies based on their needs and budgets. It is best to use the services of a New York Licensed Commercial Insurance Agent when purchasing commercial insurance coverage.

Why Do we Need Commercial Insurance?

Commercial insurance in New York is essential for several reasons. These include:

1. Coverage for liability - In business premises, it is difficult to predict when an employee or customer can get hurt. When workplace injuries occur, businesses do not have to pay the costs out of pocket if they have a commercial insurance policy. However, some liability claims can be large and could lead to financial complications for a business without commercial insurance coverage. For example, if an employee is injured on business premises, an active worker's compensation policy will pay for medical bills and litigation fees. Employees who suffer from disabilities will also be catered to from payouts made from relevant commercial insurance policies.

2. Employee protection - In New York, there are over 2.3 million businesses. These businesses provide employment to residents. Hence, it becomes vital for businesses to have commercial insurance to protect their employees. Commercial insurance policies offer compensation for medical care, lost wages, or funeral expenses. This allows businesses to retain the best employees.

3. Customer protection - If a customer is injured on the premises of an insured business, a commercial insurance policy will pay the medical expenses. Also, if a customer suffers bodily injury and property damage while using the goods and services of an insured business, the insurance policy can cover such damages. Businesses maintaining data need commercial insurance to protect them from the legal eventualities that arise from data breaches and cyber-attacks.

4. Giving credibility to a business - In New York, businesses can earn the confidence and trust of their customers and other business partners just by having suitable commercial insurance coverage.

5. Aiding businesses close deals faster - Credit companies, financiers, and prospective business partners will not hesitate to deal with a business if it has commercial insurance coverage. Businesses will also be able to assess rental properties more quickly if landlords can obtain proof of commercial insurance

6. Coverage for private assets - People working for publicly traded companies and not-for-profit organizations benefit immensely from commercial insurance coverage because it protects personal assets and investments in case of litigation.

7. Coverage from natural disasters - Considering that New York has been hit by some of the worst natural disasters, including hurricanes, storms, floods, tornadoes, and power outages, it becomes pertinent for businesses to hold relevant commercial insurance policies to prevent heavy financial losses.

Insurance provides coverage up to the purchased policy limits. Engage a New York-licensed commercial insurance agent who can help assess a business insurance needs and select the most optimal and cost-effective commercial insurance coverage.

How Does Commercial Insurance Work in New York?

There are over 160 domestic property insurance companies in New York, and Commercial insurance in New York represents roughly 28% of all the direct premiums written for property and casualty insurance in New York. Thus, commercial insurance is a very important form of insurance that businesses must be aware of and acquire. In New York commercial insurance pays for liabilities that a business may incur during operations. Some of these liabilities include litigation claims and bodily injuries to employees or customers. Companies typically get coverage for what has been insured. Hence, when selecting commercial insurance coverage, it is best to consult with a New York-licensed commercial insurance agent to carefully choose coverages that will suit the business’s needs.

Besides workers’ compensation insurance and disability benefits insurance, New York does not mandate companies to have commercial insurance policies before starting operations. While not mandatory, it is worthy to note that certain perils can sink a business without commercial insurance. Upon the occurrence of a covered peril, the business or its representative will extensively file proof of the damages and make a claim with the insurer. It is best to consult with a New York licensed commercial insurance agent or broker about getting insurance coverage, making a claim, or inquiring about other aspects of the commercial insurance process.

What is Commercial Insurance in New York?

Commercial insurance is also referred to as business insurance. In New York, it is an insurance policy that offers financial protection to insured businesses against risks like client lawsuits, customer or employee injuries, property theft, property damages, and all other unexpected events.

What are the Types of Commercial Insurance in New York?

Commercial insurance in New York insurance industry is classified into four major categories, namely:

• Commercial property insurance

• Commercial liability insurance

• Commercial health insurance (employer health plans + workers’ compensation)

• Commercial life insurance.

COMMERCIAL PROPERTY Insurance in New York

In New York, commercial property insurance covers the cost of repairs or replacement of buildings or tools damaged by a covered peril. In addition, the policy offers payments for some income lost if a business cannot operate after the occurrence of a covered event. There are several commercial property coverage options available to businesses in New York. For example, businesses that rent equipment or facilities to operate need commercial property coverage. Those leasing parts of a property or the entire building for operations also need commercial property coverage. Property owners can also insure leased properties. Below is a list of commercial property policies available to each category of policyholders in New York:

Business Operation of Small Business Insurance

Under this policy, businesses can enjoy:

• Business interruption insurance. Under this coverage, the perks include:

  • Loss of Business Income Insurance - Covers any event that will affect the income of businesses

  • Commercial Crime Insurance - This category offers coverage against employee theft, computer fraud, and other crimes committed against the business

  • Equipment Breakdown

• Business Property Insurance. This includes:

  • Commercial Auto Policy - This covers vehicles owned or leased by a business

  • Builder’s Risk Coverage - This coverage offers protection to builders and properties owned by a business throughout the period the property is under construction

  • Goods/Product Coverage - This offers coverage to goods being transported by land plus storage costs (inland marine) or transported on water (ocean marine)

  • Hull Insurance - covers watercrafts (boats, ships, etc.)

  • Cargo Insurance - protects the shipped commercial cargo.

• Landlord or Lessor of Commercial Property. This coverage includes

  • Loss of rental income coverage

  • Coverage against flood damage

  • Rebuild costs coverage

  • Coverage for emergency repairs

  • Warehouse building insurance

  • Office building insurance

  • Industrial building coverage

A wide range of commercial insurance policies is available to businesses in New York. Bundling multiple coverages can reduce insurance costs and help a business save on premium costs. A business owner’s best bet is to engage a New York licensed commercial insurance agent who can assess their business needs and help them find suitable commercial property coverage.

COMMERCIAL LIABILITY Insurance in New York

According to the Office of Advocacy for small business, New York state is approaching a mark of 3 million businesses. These businesses are better off insured to avoid heavy financial losses. Business liability insurance is also referred to as commercial liability insurance. Commercial liability insurance protects a business against financial losses arising from injuries or damages sustained by third parties due to the business or its employees' actions. There are several types of business liability insurance in New York. Some of these are:

General Liability Insurance: A business owner can get general liability insurance coverage to protect their business from claims arising from injuries on their property. GL coverage typically pays for property damage, medical payments costs, and legal fees

Product Liability Insurance: This coverage shields an insured business from financial losses arising from lawsuits filed against it by a client who is hurt after using the company's products

Professional Liability Insurance: Professional liability covers errors made by a business and its employees that lead to financial losses of a customer.

There are four general types of professional liability insurance:

• Errors and Omissions (E&O) Liability Insurance: This offers coverage to an insured business for claims and lawsuits arising due to errors or wrong advice proffered by a business and its employees

• Malpractice Insurance: This coverage is primarily for health and legal professionals to protect them against malpractices that may occur on the job

• Directors and Officers (D&O) Liability: This coverage is designed for high-ranking business executives. It protects them against events such as intentional or unintentional disclosure of confidential information, loss of money due to bad investments, conflicts of interest, or other illegal acts

• Specific Liability: An example of this policy is Liquor Liability coverage, which establishments that serve alcohol get to insure themselves from the actions of their possibly intoxicated customers.

Business Auto Liability: This coverage provides financial support to cover a third party's medical expenses or repair costs if the business or its employee is at fault in a car accident

Contract Liability Insurance: This protects an insured business from litigation that may arise from contract disputes. If the business loses the case, the insurance company will step in to cushion the financial losses levied against it

Cyber Liability Insurance: This is a type of commercial liability insurance that pays for the cost of recovering data, handling a data breach crisis, or malicious virus invasion

Landlord Liability Insurance: This type of commercial liability insurance protects property owners from risks arising after leasing their property to a business. It provides a financial cushion to landlords if they are legally responsible for an injury sustained by people on their property. It can cover medical expenses and other legal fees incurred due to such incident

Employment Practices Liability (EPL): This coverage protects a business from lawsuits arising from alleged discrimination, wrongful termination, and other employment-related issues

Commercial Umbrella Liability: This coverage offers coverages and protection that standard insurers may exclude from a commercial policy contract. For example, a standard insurance company may not want to provide coverage against flood risks, but another insurance company might offer this as umbrella coverage

Besides these significant coverage types, businesses can also enjoy a particular kind of commercial liability coverage called Account Receivable Coverage. An account receivable coverage protects businesses from losses due to a customers' inability to make payments when due. The coverage also offers protection to records of account receivables.

To discuss commercial liability coverage or to get a quote, speak with a New York state-licensed commercial insurance professional who has access to multiple insurers.

COMMERCIAL HEALTH Insurance in New York

The state government in New York does not issue commercial health insurance. In New York, employers must provide health insurance coverage if the business employs more than 50 people according to the New York Affordable Care Act. In New York, employers provide health insurance coverage to 49.4% of the insured population, making commercial health insurance an important offering for businesses to consider. Thus, it is best for a business to use the services of a New York-licensed health insurance agent to obtain health insurance coverage for its employees. Some commercial health insurance plans available in New York are:

Group health insurance: There are two types of group health insurance in New York:

• Self-insurance: A self-insured group is self-funded by the employer. Under this plan, the employer provides health care directly to its employees out-of-pocket instead of relying on an insurance company and paying fixed premiums per employee

• Fully Insured: The employer pays premiums to an insurance company, and the insurer becomes fully responsible for paying health claims of the employees of the insured business

Disability Income: While this is not exactly an insurance plan, insurers offer this coverage to employees in case they sustain injuries on the job. It pays employees a portion of their salary while recovering from such injuries.

Workers compensation: Workers Comp coverage pays employees lost wages when they cannot work due to sustained injuries. In this plan, there are liability limits, except there is proof of gross negligence on the employer's part leading to fatality.

COMMERCIAL LIFE Insurance in New York

Commercial life insurance in New York protects the interests and life of a business in two significant ways:

Group Life Insurance

In New York Group Life insurance is available to employees, their spouses and children. The plan is also available to employers. This insurance policy offers three unique coverage to policyholders namely:

1. Life Insurance Coverage - The listed dependents of the policyholder receive compensation in the case of the demise of the insured

2. Accidental Death and Dismemberment Insurance - This coverage ensures that the listed dependant of an insured person gets benefits if they are dismembered or die in the course of carrying out their job

3. Common Carrier Accidental Death Benefit - This coverage ensures that the listed dependents of the insured get a lump sum payment if the insured person dies while in transit on a commercial airplane, a jet, a public bus, or another medium of transport

Group life insurance policyholders in New York can choose coverages that ensure their spouses’ families and dependents are taken care of after their demise. Policyholders can typically get coverage equal to:

A fixed amount of:

• $5,000

• $10,000

• $15,000

An amount that is equal to:

• The annual salary of the policyholder

• Two times the annual salary of the policyholder

• Three times the annual salary of the policyholder

• Four times the annual salary of the policyholder

• Five times the annual salary of the policyholder

In New York, most insurers will allow a maximum benefit to policyholders. Typically, the caps placed on benefits to policyholders under a group life policy are:

• Life insurance - $500,000

• Accidental death and dismemberment insurance - $250,000

• Common carrier accidental death benefit - $250,000

The salary value is determined by the employer.

Buy-Sell Agreements

A buy-sell agreement defines how a partner's stake can be substituted in the event of the partner's demise or voluntary withdrawal from a business. It creates a methodology to define business value. In New York, cross-purchase and redemption are the two most widely used forms of buy-sell agreements. Some agreements can be a blend of these two forms. A cross-purchase agreement allows the remaining owner(s) to acquire the business interests of a late or withdrawing partner. Redemption agreements, on the other hand, assign a business entity to purchase the shares of the selling owner, ensuring continuity. In New York, small business owners, partnership associations, closed companies, and other for-profit businesses adopt buy-sell agreements to ensure business continuity after a stakeholder's demise or voluntary exit.

Key Man Life Insurance

This policy provides coverage if a business has a principal or key staff whose demise can disrupt business activities. In key man life insurance, the business is responsible for paying premiums to the insurance company; however, the business becomes the beneficiary in the event of the insured person's death. A key man life insurance coverage in New York provides a financial safety net between when the key man dies and when business operations resume fully. During this period, the business will be charged with finding a replacement or implementing other strategies to keep the business afloat, such as closing or selling the business. Where the key man becomes incapacitated instead of dying, the policy provides disability coverage.

To discuss commercial life insurance and to get a quote, speak with a knowledgeable New York-licensed life insurance agent.

BOP vs. CPP vs. GL

In New York, the business owner policy (BOP) can be bundled, unlike the commercial package policy (CPP) which comes as a pre-packaged policy. The significant difference, however, is the flexibility of the insured under the plans. Business owners can choose their CPP bundles and combinations, but not in a BOP. For example, insured businesses may be offered business income insurance in BOP regardless of whether they need it or not. However, general liability insurance policy (GL) allows more specific liability coverage for contractors and businesses in New York than BOP or CPP.

BUSINESS OWNER’S POLICY (BOP)

A Business Owners Policy (BOP) allows insured businesses to customize a commercial insurance policy that combines property coverage, commercial general liability coverage, crime insurance, and other coverages as needed. A typical business owners policy in New York includes:

• Products and completed operations coverage

• Premises liability coverage

• Premises medical coverage

• Fire legal liability coverage

• Business income insurance

• Building and personal property protection

• On-site equipment insurance

• Coverage for inventory loss

• Crime insurance.

COMMERCIAL PACKAGE POLICY (CPP)

A commercial package policy combines coverages for several perils, primarily covering liabilities and property risks. It allows businesses to choose the best coverage for their business needs. One significant benefit of the CPP coverage in New York is that it enables businesses to save significantly on the cost of premiums than if they purchased each coverage.

In New York, CPPs combine one or more of the following:

1. General liability coverage

2. Property insurance

3. Commercial auto insurance

4. Crime insurance.

CPPs do not offer worker compensation insurance and group health/life insurance. Choosing between a BOP or a CPP can sometimes be overwhelming; that is why business owners or their representatives should use the services of New York-licensed commercial insurance agents to assess their business needs and find suitable commercial insurance policies to fit the company budget.

GENERAL LIABILITY (GL) POLICY

Commercial general liability insurance policy is a form of insurance that protects businesses from the liability resulting from bodily injury and property damage that occur during operation or on the premises of an insured business. In New York, a CGL could either be claims-based or occurrence-based.

• Claims-Based Policy

A claims-based policy offers coverage for claims regardless of when the incident occurred

• Occurrence-Based Policy

An occurrence-based policy only pays out claims to cover an event that occurred in a pre-specified period

In New York, a business owner can list additional businesses on their policy contract. There are varying levels of coverage in commercial general liabilities coverage. Some policies can offer coverage to the business premises, ensuring that employees or clients injured during normal operations are covered. The CGL insurance also covers services outside of the insured business premise. Businesses or their representatives can procure excess liability coverage to cover claims not listed in the CGL policy, such as a product recall.

A business owner in New York or their representatives can buy CGL to extend coverage to other business risks. For example, they may purchase employment practices liability coverage to pay for claims associated with sexual harassment, wrongful job termination, or prejudice. Businesses can also procure errors and omissions liability insurance to provide coverage for professional liabilities of public-facing professional advisors, such as consultants, attorneys, and insurance agents.

Get the right coverage. Speak with a knowledgeable and state-licensed commercial insurance agent who is experienced with your type of business and has access to multiple insurers and commercial policies for coverage comparison.

How Much Business Insurance Coverage Do I Need?

In New York, businesses only need to buy enough coverage to meet their business needs. A business owner or their representative is responsible for evaluating the business's insurance needs before purchasing commercial insurance coverage. It is best to consult with a New York licensed commercial insurance agent before obtaining any commercial insurance policy. The New York Department of Financial Services maintains a database of licensed commercial insurance agents in the state. When contemplating the insurance needs of a business, the most critical question is if New York laws require the insurance policy. Once that has been determined, it is good to assess the needs of the business and its financial capacity to keep the insurance policy active.

If engaging a commercial insurance agent for business insurance in New York, the agent will:

• Assess your needs and restrictions

• Review the business's current policy while ensuring the selected coverage reflects the current needs. The agent can also update the existing policy if needed

• Research the locally available plans that fit your needs and find a better deal than a consumer can find on their own

• Check for available savings and bundling discounts

• Explain how the differences between the policy choices affect the business

• Assist with the application process.

Surplus Lines Insurance in New York

In New York, surplus lines insurance protects businesses from high-level financial hazards beyond what a standard commercial insurance policy can manage. This policy is widely available to corporations and individuals. Some features of surplus lines insurance in New York include:

• Insurance premiums for surplus lines insurance cost more than the standard policies

• Surplus line insurers typically respond more quickly to claims

• Unlike standard commercial insurance policies, a business can get surplus lines insurance from any insurance company with a license outside New York.

What is an Example of Surplus Lines Insurance?

In New York, the risks covered by surplus line insurers include:

1. Distressed risk coverage is coverage for risks with unfavorable attributes, which makes it unacceptable for standard insurers to cover.

2. Unique risk coverage is coverage for unusual or highly specialized risks that traditional insurers cannot offer rates to cater for.

3. High capacity risk coverage is coverage with risk limits higher than standard insurers are typically able or willing to provide.

What Purpose Do Surplus Companies Serve in New York?

In New York, surplus line insurance companies serve the singular purpose of carrying risks beyond what standard insurers can bear. If a business tries to find coverage and cannot do so for the particular risks, the best option is to find a surplus line insurance company. It is best to speak to a New York-licensed commercial insurance agent to find the best surplus line insurance coverage to cater to a business’s unique risk.

Why Would Someone Place their Insurance With a Surplus Lines Broker?

Businesses in New York would typically work with surplus line insurers to accommodate high risks and new hazards that regular commercial insurers cannot bear.

How are Surplus Lines Insurers Regulated in New York?

In New York, surplus line insurers' activities are regulated by the New York Department of Financial Service. In addition, a non-profit organization called the Excess Line Association of New York (ELANY) provides regulatory clarity via the New York Excess & Surplus Lines Laws and Regulations.

Domestic insurers must be regulated as LLCs in New York to be eligible to provide surplus line insurance. In addition, foreign insurers must maintain a minimum of $47 million of policyholder’s surplus and be licensed in the jurisdiction they are domiciled for the line of business they plan to write as excess line risk in the state of New York.

What is Specialty Business Insurance?

Specialty business insurance in New York provides coverage to personal or business items that are typically not covered by standard insurers and policies. Specialty business insurance provides businesses with coverages that standard insurers cannot provide. Businesses can use specialty insurance in the following instances:

• Occasional special use equipment - Businesses that use luxury boats, classic cars, or any other recreational facilities require specialty insurance coverage

• Exotic or costly personal items - Businesses that produce or sell exotic items like artworks, coin collections, wristwatches, antiques, documents, and vintage furniture need specialty business coverage

• High-risk businesses and professions like select sports activities, medical practitioners, real estate, and construction companies may require specialty business insurance

It is best to engage the services of a New York-licensed commercial insurance agent to find the appropriate specialty insurance for your business needs.

Common forms of specialty business insurance in New York include:

• Ocean/Marine Insurance - This coverage protects goods transported on sea. The specialty coverage for the ocean and marine insurance depends on the type of goods to be transported and the transportation methods to use.

• Flood Insurance - Covers businesses in parts of New York that operate in flood-prone locations

• Special Event Insurance - Businesses that organize expensive events might need to insure each event, including the venue and equipment used against liabilities that may arise during such events

• Cyber Liability Insurance - This coverage is essential for businesses engaging in data storage or management

• Commercial Umbrella Insurance - This covers a business from perils excluded from standard policies

• Kidnap and Ransom Insurance - Workers and families of persons working in high-risk areas will want to consider this coverage to protect them in the event that they are kidnapped

• Directors and Officers Liability Insurance - This liability insurance coverage protects high-ranking directors and private individuals from losses if there are litigations against them

• Travel Insurance - Travel insurance covers businesses and employees during domestic or international trips.

What is Business Hazard Insurance in New York?

Business hazard insurance is also known as business property insurance in New York. It is designed to protect businesses from losses and damages to the building where they operate. Two primary forms of business hazard insurance exist in New York. They are:

• Commercial Property Policy: This covers the properties integral to the business's operations. An insurance company must compensate for lost income when an insured company cannot continue business operations after a loss

• Business Owners Policy (BOP): BOP insurance is similar to commercial property insurance. However, BOP allows for additional coverage that might be useful to businesses. For example, businesses can combine BOP insurance with general liability coverage.

The most common natural disasters to strike the businesses in New York are:

• Storms

• Floods

• Wildfires, and

• Blackouts

Consult with a New York-licensed commercial agent before purchasing business hazard insurance. Licensed and experienced agents with access to multiple commercial insurance companies can help you assess your business needs and then pick the right coverage at the most affordable cost.