New York Business Liability Insurance FAQ

While customer slips and falls are some of the most common commercial liability claims, your business can be held responsible for faulty products, reputational harm, and a variety of other negligent behaviors that cause either physical or financial harm to a customer, vendor, or member of the general public. 

• SMALL BUSINESSES IN NEW YORK (2016) - 2,129,015 
• NEW YORK COMMERCIAL INSURANCE CLAIMS (2016) - $14,947,682,000

The majority of insurance claims made by businesses are property claims (fire or weather damage, theft, etc.). Liability claims may happen less frequently, but are far more costly. 

40% of small businesses are likely to experience a property or general liability claim in the next 10 years. Here are some examples of the most costly claims:

• REPUTATIONAL HARM: $50,000 Average Cost Per Claim
• VEHICLE ACCIDENT: $45,000 Average Cost Per Claim
• PRODUCT LIABILITY: $35,000 Average Cost Per Claim
• CUSTOMER SLIP & FALL: $20,000 Average Cost Per Claim
• STRUCK BY OBJECT: $10,000 Average Cost Per claim

CGL policies cover three types of liability exposures:

• PREMISES AND OPERATIONS: Claims against your business for bodily injury and property damage related to the ownership and maintenance of the business premises, or as the result of business operations conducted both at and away from the business premises
• PRODUCTS AND COMPLETED OPERATIONS EXPOSURE: Claims for bodily injury and property damage that result from faulty products or completed operations (work performed by your business)
• INDIRECT/CONTIGENT EXPOSURE: Claims resulting from the negligent actions of independent contractors and subcontractors that you hire

Specifically, a CGL policy may pay for the following types of claims, up to the limits of your policy.

DAMAGE TO SOMEONE ELSE’S PROPERTY

• We call this “property damage liability insurance.”
• Example: A plumber working on a home remodel forgets to turn off the water and floods the homeowner’s finished basement. 

SOMEONE ELSE’S MEDICAL BILLS

• We also call this “bodily injury liability insurance.”
• Example: A delivery person slips and falls on a restaurant’s recently mopped floor and breaks an arm.

HARM TO A COMPETITOR’S REPUTATION

• We call this “personal injury liability insurance.”
• Example: Your employee makes slanderous or false statements about a competitor, causing loss of business and reputational harm. 

HARM CAUSED BY A PRODUCT

• We call this “product liability coverage.”
• Example: A child’s outdoor play set collapses and injures a child. 

Your business likely faces numerous liability exposures, and not all of them are covered by your New York commercial general liability policy. In fact, standard CGL policies typically exclude certain types of liability risks (e.g., commercial auto liability) that are common for many businesses. 

If you are at risk for claims and lawsuits that are not covered under your New York CGL policy (e.g., you own commercial vehicles), you may need to purchase an additional specialized liability policy or add a tailored endorsement to your CGL policy. 

• COMMERCIAL AUTO INSURANCE provides coverage for property damage and bodily injury liability claims, vehicle damage, and medical bills, as well as any costs related to lawsuits due to auto accidents involving your business-owned vehicles. 
• COMMERCIAL UMBRELLA/EXCESS LIABILITY COVERAGE provides liability protection above and beyond the liability coverage that is included in your CGL policy, commercial auto policy, or business owners policy. A commercial umbrella policy pays for damages when your other liability coverage has been exhausted. 
• DIRECTORS & OFFICERS (D&O) LIABILITY COVERAGE provides protection for directors and officers of large companies against legal judgments and costs arising from unlawful acts, erroneous investment decisions, failure to maintain property, releasing confidential information, hiring and firing decisions, conflicts of interest, and many other types of errors. 
• ERRORS & OMISSIONS (E&O)/PROFESSIONAL LIABILITY INSURANCE is recommended for lawyers, accountants, architects, engineers, IT companies, or any company where individuals provide a service to clients for a fee. It offers coverage for lawsuits that arise from rendering negligent professional services or failing to perform professional duties.
• CYBER LIABILITY INSURANCE covers a range of potential liability exposures that can occur while using, storing, or transferring data electronically for business purposes. Any business that handles electronic data—especially personally identifiable information about its customers—is particularly susceptible to cyber threats. 
• OTHER LIABILITY ENDORSEMENTS are used to add special coverage to standard CGL policies to fill coverage gaps. The most common commercial liability endorsements include employment practices liability, liquor liability, and employee benefits liability. 

The cost of a CGL policy can range from $500 per year to thousands of dollars per year. 

The size of your business, its location, and your industry all play a role in how much you will pay for business liability insurance in New York. You may also pay more or less than average depending on the coverage limits and deductibles that you select.

If you own a business that presents a greater risk to third parties (customers, suppliers, or the general public) than others, you can expect to pay more for your New York CGL policy. A restaurant owner in a busy entertainment district will pay far more for a CGL policy than a freelance marketing consultant. The restaurant owner faces risks from customer slips and falls and several other exposures, while the marketing consultant never has customers on its premises and does not produce a product that can cause physical harm. 

Some industries that typically pay more for liability coverage are:

• Janitorial and cleaning services
• Construction
• Manufacturing
• Retail trade
• Wholesale trade

New York commercial liability insurance is one of the basic building blocks of a comprehensive business insurance program. Without it, you could not defend your business from lawsuits and claims of negligence—whether or not the claims are appropriate. The costs of defending yourself in the face of a lawsuit can be overwhelming, especially for a small business. Wouldn’t you sleep better knowing that you’re protected? 

Talk to an independent agent in New York. Independent agents will get to know you and your businesses. They can work with multiple insurance companies; they may even be able to find a carrier who specializes in your line of work. 

• There are 1,287 independent agents in New York who are ready to help. 
• In 2017, our agents helped 8,619 New York residents

An independent insurance agent compares policies from multiple companies to find the best coverage for your needs.