Setting up required Business Insurance:

Workers Compensation Insurance:

If you have any employees, (full-time, part-time, seasonal or even volunteers), you are required to have and maintain a Workers Compensation insurance policy.   You can purchase a Workers Compensation policy from almost any insurance broker or directly from The New York State Insurance Fund.   You do not have to carry Workers Compensation insurance if you are the only employee.

The premium for your Workers Compensation policy is initially set by what you think your payroll will be, how many employees you will have and the number of locations of your business.   At the end of the year you will be given an "audit" sheet to fill out and your premiums can be adjusted upward or downward retroactively.   In other words, you may have to pay extra at the end of your policy year if your payroll exceeded estimates.

Failure to maintain Workers Compensation Insurance brings serious penalties, usually about $250.00 per day.   In addition if you fail to provide your employees Workers Compensation insurance, they can sue your business, or you personally if you are a sole proprietor or partnership, if they are injured on the job. Without a Wokers Compensation policy, the employee has the right to either receive Workers Compensation benefits through the NYS Insurance Fund which will make you pay the full amounts of medical bills and lost earnings (in addition to penalties) or to sue you for personal injuries.   Failing to maintain Workers Compensation may result in criminal charges.

Workers Compensation investigators can (and quite often do) appear at your business unannounced to examine your books and to see who is working at your location.   If they find any workers who are not covered under your Workers Compensation insurance policy, you can be fined substantially.   This is not one of the areas where a small business person wants to try to cut corners.

In addition to having and maintaining the Workers Compensation insurance, you are required to post a notice regarding the Workers Compensation conspicuously at your location so that your employees know that they are covered.   If anyone is injured while working for you, it is up to you to provide notice to the insurance company and to the employee.   The employee's medical expenses and lost earnings (up to a limit) will be covered regardless of who was at fault.

New York State Statutory Disability:

You are also required to carry and maintain a New York State Statutory Disability Policy.   This covers each worker for one half of their salary up to $170.00 per week for a maximum of 26 weeks.   Premiums for the statutory disability policy are fairly minimal starting at about $60.00 per year.   To calculate what your premium would be, go to the NYS Insurance Fund premium calculator.   You do not have to carry New York State statutory disability if you are the only employee.

Comprehensive General Liability Policy:

Most businesses are not required to carry a general liability policy unless required as part of the licensing requirements.   Every business, however, should have a comprehensive General Liability Policy.   This would cover such things as accidents which happen at your workplace or accidents caused by you or your employees during the course of work even if at some other location.   A Comprehensive General Liability Policy will help avoid interruption of your business in addition to protecting your personal assets if your business is sued.

Most Comprehensive General Liability Policies also include coverage for business premises.   This would include damage to your store or office and may include damage to inventory, office equipment, business papers and loss of profit if you are not able to use your business to make money.   While this coverages is not required, the premiums are usually a small price to pay for the coverage they provide.