Types of Business Insurance in NJ
No matter what type of business you run, you need business insurance to protect your investment. There are many types of business insurance in New Jersey, but the coverage you choose will depend on your operations and needs. To help you make the right decision, let’s learn about the different types of business insurance in NJ.
Business Liability Insurance
All businesses need liability insurance, but it’s not as simple as finding one policy. There are many types of business liability insurance:
General Liability Insurance
This type of insurance protects companies against claims for personal injury, bodily injury, or property damage.
Umbrella Liability Insurance
A type of advanced liability business insurance, umbrella liability insurance is used to protect businesses from major claims and lawsuits. Unless a company has umbrella insurance, they could end up paying for excess damages, medical bills, and legal fees.
Professional Liability Insurance
PL insurance covers companies in the event of negligence claims. These claims might accuse the business of harmful mistakes or performance failures.
Employment Practices Liability Insurance
EPL insurance covers employers if their staff file discrimination based claims. Alleged claims could be based on wrongful termination or discrimination based on age, race, disability, or gender.
Cyber Liability
Cyber liability covers a business in the event of a cyber security breach. For example, if a business experiences a hacking scandal resulting in customer data being exposed, a Cyber Liability policy covers the business for financial losses and supports the company to rebuild its reputation.
As you can see, even one type of business insurance can have several subcategories. If you’re confused about which types of business insurance you need, it’s best to talk to your local New Jersey insurance provider.
Property Insurance
Property insurance is a policy that protects both your business premises and equipment. Whether you rent or own your property, you’ll need some kind of property insurance to protect your assets and interests. If your property or your equipment is damaged, destroyed, or stolen, you’ll be covered under property insurance. A typical property insurance policy will cover the following areas:
- Any inventory that’s stored in your warehouse or office.
- Equipment and tools that you use for your company.
- Your business furniture, including tables, chairs, and couches.
- Any personal property that’s stored at your business premises.
- Business computers and other tech equipment.
- Important documents.
What Does Property Insurance Usually Cover?
Under a property insurance policy, you’ll be covered if your business property becomes damaged in a fire. You’ll also be covered if a customer experiences an injury while on your business premises. If your equipment is stolen, and you experience downtime as a result, you’ll be covered for that too.
Business Interruption Insurance
According to Investopedia, ‘Business interruption insurance is insurance coverage that replaces income lost if business is halted due to direct physical loss or damage.’
If you can’t run your business because of an incident or accident, business interruption insurance can cover your financial losses. You can use this type of insurance to cover expenses such as payroll, utility, bills, and more.
Workers’ Compensation Insurance
Workers’ compensation insurance covers medical costs and lost wages if a member of staff is injured or sick. Employees are covered under the following categories:
Disability Benefits
If an employee is injured, and cannot continue to work, workers’ compensation entitles them to disability benefits. These benefits are used to cover wages lost, and may be temporary or permanent.
Medical Benefits
If an employee gets injured, or suffers a work-related illness, that employee is covered by workers’ compensation. These policies can cover medical expenses, including doctor visits, physical therapy, medication, or pain management.
Death Benefits
If an employee dies in a work-related accident, workers' compensation pays benefits to their dependents.
Rehabilitation Benefits
When a worker suffers permanent disabilities, they are entitled to rehabilitation benefits. If the person can no longer perform their old job, these benefits cover retraining, tuition, learning materials, and skill assessments.
Auto Insurance
If you or your employees use a car for work, your vehicles must be insured too. You’ll need this coverage to protect yourself in the event of a car accident. Auto insurance policies can protect your business from physical damage, towing costs, and liability.
Bonding
Bond insurance refers to a policy that’s purchased by a bond issuer. It’s used to guarantee the repayment of both primary and related interest payments. Bond issuers purchase this insurance type if they are looking to boost their credit rating, and decrease the interest amount. You might have also heard this insurance referred to as financial guarantee insurance.
Commercial Umbrella Insurance
Commercial Umbrella Insurance offers companies extra coverage to protect their finances and assets. Under some circumstances, an expensive lawsuit will exceed the limits of a company's main insurance policy. Commercial Umbrella Insurance is a way to access extra protection.
If businesses exceed their primary coverage, and they do not have an umbrella policy, they could be obligated to pay extra damage expenses and legal fees out of pocket.
A commercial umbrella insurance policy can also cover advertising or personal injury, such as reputational damage. Personal injury covers many areas, including privacy invasion, slander, libel, wrongful eviction, or false arrest.
Inland Marine Insurance
Inland Marine Insurance is used to cover equipment, materials, and products that are transported across land. It can also include equipment that’s stored with a third party.
Inland Marine Insurance covers property that is transportable or movable. These policies cover:
- Networking tools and communication equipment.
- Medical & scientific equipment.
- Cargo vans, food trucks, and other transportation equipment.
- Construction supplies and tools in transit.
- Sculptures, photography, and paintings.
If you’d like to discuss your business insurance needs in New Jersey, contact the Calhoun Agency today.
Why Do Small Businesses in NJ Need Cyber Liability?
New Jersey is one of the smaller US states, however, it’s densely populated. Many industries contribute to the thriving economy, including technology, clean energy, media and film, and financial services. No matter which type of business you run in New Jersey, you’ll need cyber security support to protect your investment and brand.
According to Tech Injury, '30,000 websites are hacked daily, and 64% of companies have experienced at least one form of cyber attack.' Some of the biggest threats to companies are phishing attacks, malware, ransomware, social engineering, and DDoS attacks. To stay safe, online businesses need adequate protection, including cyber liability insurance.
What Is Cyber Liability?
Cyber liability is a type of insurance to protect companies from cyber security threats. In the event of a cyber security breach, cyber liability insurance acts as damage control. If a business suffers financial losses because of a data breach, these losses will be covered by a cyber liability policy. A typical policy is likely to cover the following costs:
- Restoring Data: Covers the expenses associated with replacing damaged software and restoring programs & data.
- Downtime Losses: When operations come to a halt, your business ends up losing money. A cyber liability policy will cover any financial losses because of downtime.
- Cyber Extortion: These insurance policies can also cover ransom payments, as sometimes hackers will steal info and threaten to destroy it unless a ransom is paid.
In the aftermath of a cyber attack, businesses may need to hire an IT expert, attorney, or a PR professional (depending on the damages caused). Some cyber liability policies also cover these expenses.
How Is Cyber Liability Insurance Different From Data Breach Coverage?
According to Forbes, ‘Data breach insurance will assist your business if sensitive financial data gets exposed in a data breach.’ There’s also the option to add extra coverage, such as business income insurance, for example. This would be appropriate if you temporarily could not operate because of a data breach.
Cyber liability insurance is a more comprehensive form of coverage designed for businesses who want robust cyber protection. Cyber liability covers financial losses and also offers legal protection. Data breach coverage acts to protect your finances, however, it does not include legal protection.
Why Do Small Businesses Need Cyber Liability?
There are many reasons businesses need cyber liability coverage.
Financial Losses
According to Solvere One, small businesses pay an average of $38,000 for a cyber attack, while larger companies can pay up to $570,000. Businesses may struggle to pay for the damages and associated expenses without a cyber liability policy. You’ve worked hard to make your business a success, but unless you protect your investment, you’re putting your company at risk.
Reputational Losses
Research from Data Privacy Manner discovered that, ‘71% of CMOs believe that the biggest cost of a security incident is loss of brand value.’ Experiencing a data breach can damage your reputation, as both potential and existing customers may lose trust in your brand.
When you suffer reputational losses, it’s advisable to work with PR companies and reputational management services. Certain cyber security policies will cover these costs, and help you to get back on your feet.
Reduce Downtime
Data from Varonis discovered that, ‘The average time to identify a breach in 2020 was 228 days,’ and ‘the average time to contain a breach was 80 days.’ When business operations come to a standstill, these companies lose out on both time and productivity.
Putting cyber liability policies in place is the best way to reduce downtime and get back up and running fast.
Legal Compliance
When a business experiences a data breach, they are legally obligated to notify anyone affected. Adhering to these regulations can be expensive, especially in relation to identify theft, legal action, and security fixes. A cyber liability policy can cover data exposure and support businesses to comply with the law.
Recover Lost Data
In the aftermath of a data breach, businesses may need to recover lost or stolen data. Cyber liability policies can help businesses retrieve their data and minimize the impact of the breach.
Forensic Support
After a cyber attack, your company will need to perform an investigation to find out what caused the breach, and the extent of the damages. Certain cyber insurance policies can cover forensic costs, helping businesses access expert advice.
Why Do Cybercriminals Target Small Businesses?
Identity thieves often prey upon small businesses because they typically have less security in place than their larger counterparts. With the help of cyber liability insurance, small businesses can protect their interests and access the support they need.
What Can Businesses Do To Prevent a Cyber Security Attack?
There are many things that businesses can do to prevent a cyber security attack:
Security Best Practices
To prevent a security breach, businesses must adhere to cyber security best practices. Companies should use multi-factor authentication systems to check the identity of anyone accessing their network.
MFA systems include layers, such as robust passwords, SMS message codes, and testing biometric traits. With robust security practices, businesses can keep unauthorized people from accessing their data.
Companies can take advantage of Mobile Device Management systems to oversee their remote network and trigger security updates. Password management tools can also help businesses keep their various accounts secure.
Security Software
Businesses should be using security software to keep their data safe and sound. This includes antivirus and anti-malware software, as well as cloud based security software.
If you’re not sure how to improve your online security, consider hiring an IT firm to perform a security audit.
Train Your Team
Ensure that you provide your team with effective cyber security training. Teach them how to spot phishing scams and how to protect their accounts. Cyber attacks are becoming more advanced all the time, and so it’s vital that your team have the knowledge that they need.
With the right cyber security protection, you’ll help keep your company safe from a cyber attack. If you experience a cyber attack, a cyber liability policy will help you cover the costs and provide you with access to expert help to maintain your reputation.
To learn more about cyber liability insurance, contact the Calhoun Agency.