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Commercial Insurance in New Jersey

The New Jersey Department of Banking and Insurance (NJDOBI) regulates all commercial insurance activities in the state. Commercial insurance in New Jersey refers to all policies providing coverages for businesses, employees, key persons, and business-related interests. Depending on the business purposes, the common types of commercial insurance policies in New Jersey are:

  • Commercial Property Insurance

  • Business Liability Insurance

  • Commercial Health Insurance

  • Commercial Life Insurance

Commercial insurance policies are available for all business types, including small businesses, large corporations, and sole proprietorships. Commercial insurers calculate commercial insurance premiums based on several factors like business types, the number of employees, payroll, business location, and claims history. Business owners can contact New Jersey-licensed commercial insurance agents who can provide the necessary information on how to save on premiums. They can also help business owners compare commercial insurance quotes from multiple insurers to get comprehensive commercial insurance products at an affordable price.

Why Do we Need Commercial Insurance?

As of 2021, the State of New Jersey had over 937 thousand. About 99.6% of all businesses in the state are considered small businesses, with about 1.9 million employees. That same year, large corporations and small businesses in New Jersey employed over 3.8 million residents. All these businesses need commercial insurance policies because:

  • New Jersey law requires it: Employers must purchase workers’ compensation insurance for their employees, and commercial drivers must carry automobile liability insurance. Failure to carry the required insurance coverage results in several penalties, including fines.

  • Contracts may require it: Landlords who rent or lease their facilities out to businesses may require them to carry some commercial insurance policies. Also, lenders may require businesses who borrow money to finance their buildings, equipment, or operations to have certain commercial insurance requirements.

  • It keeps businesses running: Commercial insurance protects businesses from financial losses due to perils such as theft, property damage, lawsuits, and employee injuries, illnesses, and death.

  • Businesses can have liability claims: A third party or employee can sue your company, and your business can fold if you do not have insurance. Even if you win the lawsuit, you can still go out of business because of the legal costs. However, you and your business will be protected in the event of liability claims if you have commercial liability insurance.

  • It boosts business credibility: Commercial insurance shows prospective clients and customers that your company is a safe bet. Your clients are assured that if anything goes wrong with the work your company does for them, it has a way to compensate.

  • It protects your employees: The most valuable assets of a company are the employees, and it is crucial to protect them in the event of work-related accidents. Although New Jersey law requires employers to carry workers’ compensation, other coverages like disability coverage are beneficial to ensure your employees have sufficient income to cover issues relating to their health. Additionally, employers will be able to attract and retain employees with commercial insurance policies like group health insurance and group life insurance.

The kind of commercial insurance policy a business needs varies based on factors like business type, location, number of employees, and payroll. However, New Jersey business owners should discuss with licensed commercial insurance agents in their communities who can help them assess their business insurance needs. They will help compare commercial insurance quotes from multiple insurers so business owners can purchase cost-effective coverages.

How Does Commercial Insurance Work in New Jersey?

Commercial insurance typically covers financial loss suffered by a business due to business operations. In addition, it provides coverage for perils like theft, property damage, liability lawsuits, and natural disasters. Business owners are to file claims with their commercial insurance providers anytime they experience covered events. For instance, if a thief breaks into a business facility and steals equipment, the business owner should file a claim. The insurance company will investigate the claim, assess the damage, and then offer the company funds to buy new equipment and replace the window or door that the burglar might have smashed. There are several types of commercial insurance policies available in New Jersey, and all these policies include the following:

  • Premium: This refers to the cost of the insurance coverage. An insurance company uses several factors like business type, location, years in business, number of employees, value of the owned properties, and payroll to determine commercial insurance premiums. Premium payments can be monthly, quarterly, or annually.

  • Deductible: This is the amount a business must pay towards a claim before the insurance company pays out. For instance, if a business has a $20,000 deductible and property damage costs the business $50,000, the insurance company would pay $30,000. The deductible can also come as a period of time a business may have to wait until their policy starts providing coverage. Such a type of a deductible is called a Waiting Period.

  • Policy limits: This is the maximum amount of money an insurance company will pay out in the event of a covered peril. Generally, commercial insurance policies have a policy limit per claim (per-occurrence limit) and per policy tenure (annual aggregate limit).

  • Coverages and exclusions: Every commercial insurance policy has its own coverages and exclusions. Coverages refer to what the policy will pay for, and exclusions are what the policy will not cover.

In New Jersey, certain types of insurance are required by law, while others are optional. For instance, worker’s compensation (Workers Comp) insurance is required by New Jersey law from all employers. Additionally, all commercial motor vehicles in New Jersey are mandated by law to maintain automobile liability insurance. Per C.39:6A-3 of the Automobile Insurance Cost Reduction Act, commercial drivers must have a minimum of $15,000 liability coverage per person and $30,000 per accident with a minimum of $5,000 property damage coverage.

Although commercial insurance policies like cargo insurance, general liability insurance, group health insurance, and group life insurance are optional, some businesses may be contractually required to carry them. For instance, landlords who lease their buildings or office spaces to businesses might require such businesses to have general liability insurance. Also, large business clients might require businesses to have errors and omissions insurance. Even if commercial insurance is not required, it is beneficial to have it so your business can be protected when unforeseen events arise. Speak with a New Jersey-licensed insurance agent to learn more about commercial insurance coverage options and policy details. An agent can also help you shop for affordable policies that meet your business needs.

What is Commercial Insurance in New Jersey

Commercial insurance in New Jersey provides financial protection for businesses in the state against risks like property theft, third-party and employee injuries, property damage, client lawsuits, and other unexpected events. The New Jersey Office of Property and Casualty of the Department of Banking and Insurance regulates commercial insurance policies sold in the state. There are over 1,000 licensed insurers in New Jersey, and over 60 of them are property & casualty (P&C) insurers. In 2021, these P&C insurers had written more than $24 billion in direct premiums in New Jersey. The most commonly purchased commercial coverages were:

Direct Premiums Written to P&C insurers by New Jersey Businesses
Type of Commercial Coverage Commercial Coverage Premiums Written

(in Million / Billion)

Commercial Transportation Ocean Marine $168,747,000
Commercial Liability Product Liability $195,167,000
Commercial Auto Collision $268,333,000
Commercial Liability Medical Professional Liability $433,606,000
Commercial Transportation Inland Marine $781,854,000
Commercial Property Fire + Allied Lines $836,950,000
Commercial Auto Liability $1,428,714,000
Commercial Property Commercial Multiple Peril (CMP) $1,635,965,000
Workers Compensation Workers Comp $2,188,136,000
Commercial Liability General Liability $3,104,436,000

What are the Types of Commercial Insurance in New Jersey?

There are several types of commercial insurance policies available in New Jersey. These policies are divided into five major categories. They include commercial property insurance, business liability insurance, business continuity insurance, commercial health insurance, and commercial life insurance.

Types of Commercial Insurance Policies in New Jersey
Commercial Property Real Estate (Landlord or Tenant)
Inland Marine Insurance
Business Interruption Insurance
Builders’ Risk Coverage
Commercial Crime Insurance
Plate Glass Insurance
Ocean Marine Insurance
Office Building Insurance
Industrial Building Insurance
Warehouse Building Insurance
Hull Insurance
Cargo Insurance
Extra Expense Insurance
Commercial Auto Insurance
Commercial Liability General Liability (property damage + bodily injury)
Product Liability
Specialized Liability
Landlord Liability
Professional Liability Insurance
Umbrella Liability Insurance
Owners’ and Contractors’ Protective Liability
Contract Liability
Directors and Officers Liability Insurance
Errors and Omissions Insurance
Cyber Liability
Employment Practices Liability
Commercial Health Group Health Plans
Disability Income Coverage
Workers Compensation Insurance
Business Overhead Expense Insurance
Individual Health Plans
Commercial Life Group Life Insurance Coverage
Buy-Sell Agreements Coverage
Key Employee Life Insurance

COMMERCIAL PROPERTY Insurance in New Jersey

In 2020, New Jersey was home to nearly 240,000 employer establishments. Also, there are more than 2.9 million commercial properties in the state that need business property insurance policies to be protected from perils that can affect business operations. Commercial property insurance protects a company’s physical assets (owned or rented) from theft, fire, natural disasters (like storms and volcanoes), explosions, burst pipes, and vandalism.

Commercial property can be any item that belongs to the business like real estate, machinery, inventory, commercial vehicles, computers, raw materials, fences, landscaping, furniture, and fixtures. There are different types of business property insurance policies in New Jersey that owner-occupants, landlords, or renters can purchase:

  • Office building insurance

  • Industrial building insurance

  • Warehouse building insurance

  • Inland marine insurance

  • Builders risk insurance

  • Cargo insurance

  • Commercial auto insurance

  • Extra expense Insurance

  • Plate glass insurance

  • Hull insurance

  • Ocean marine insurance

  • Emergency repair coverage

  • Flood Insurance

Business owners can bundle the aforementioned types of commercial property insurance policies together for a total package to save on premiums. Commercial property insurance excludes goods in transit, employee theft, malfunctioning equipment, business interruption costs, damaged customer property, and destroyed payment records. Business owners would have to purchase other types of commercial insurance policies if they want these things covered. For instance, businesses that want coverage for employee theft should consider purchasing commercial crime insurance policies. The type of commercial property insurance a company needs depends on its industry, business size, and the nature of its operations. Hence, always discuss your business property insurance needs with a commercial insurance agent who is licensed in New Jersey and has experience working with property coverages needed by your business. They can also help you compare commercial insurance quotes from insurers in the state so you can end up with cost-effective commercial insurance products.

COMMERCIAL LIABILITY Insurance in New Jersey

Commercial liability insurance in New Jersey protects businesses from third-party liability claims. With over 861,000 small businesses, New Jersey ranks 11th in the number of small businesses in the United States. These businesses need commercial liability insurance to be covered in the event of liabilities incurred from third-party lawsuits. There are different types of commercial liability insurance available in New Jersey. They are:

  • Commercial General Liability Insurance: It protects businesses from financial loss when they cause property damage or personal and advertising injury to others through their business services or operations.

  • Cyber Liability Insurance: It protects businesses from financial losses resulting from cyber threats or breaches involving computer systems and data.

  • Commercial Auto Liability Insurance: It covers company-owned commercial vehicles when they cause damage to others.

  • Professional Liability Insurance: It protects professionals like accountants, doctors, or lawyers from liability due to mistakes made while performing professional duties or services. Professional liability coverage is divided into:

    • Malpractice Insurance: It is a type of professional liability coverage that protects legal and healthcare professionals against lawsuits due to professional errors.

    • Errors and Omissions (E&O) Liability Insurance: It provides protection against liability that arises due to wrongful advice or information given to a client which led to financial loss.

    • Directors’ and Officers’ Liability Insurance (D&O): It protects company leaders from financial losses if they are sued in business-related lawsuits.

  • Product Liability Insurance: It protects businesses when products manufactured, distributed, or sold by companies cause damages to others.

  • Contract Liability Insurance: It financially and legally protects businesses from liabilities that they assume when they sign contracts with third parties.

  • Commercial Umbrella Liability: An umbrella policy provides an additional layer of liability protection by covering perils not covered by other commercial liability policies.

  • Employment Practices Liability Insurance (EPLI): It protects businesses from employees’ lawsuits when they sue for issues like discrimination, sexual harassment, breach of employment contract, and any other violation of their rights.

  • Specialized Liability Insurance: It is usually designed to meet the specific needs of businesses, organizations, contractors, and entrepreneurs. Specialized liability insurance offers extra protection beyond standard commercial insurance policies.

  • Landlord Liability Insurance: It protects landlords and property owners from risks associated with leasing properties to businesses or organizations.

Contact a New Jersey-licensed commercial insurance agent who will be able to assess your business’ liability insurance needs and provide professional advice on the most optimal coverages available in the insurance industry. Then you will be able to pick the policy that works better for your business.

COMMERCIAL HEALTH Insurance in New Jersey

Commercial health insurance is a health insurance plan administered to New Jersey residents by non-government agencies and organizations. About 99.6% of businesses in New Jersey are small businesses with 1.9 million employees who need health insurance plans. Some common commercial health insurance policies available in New Jersey are:

  • Individual health insurance: Self-employers can get health coverage from the New Jersey individual health insurance marketplace called Get Covered.

  • Group health insurance: It is a type of health plan that employers offer to their employees, and it can sometimes extend to their family members. There are two types of group health insurance available in New Jersey:

    • Small employer health insurance: This type of group health plan is designed for employers with 2 to 50 employees.

    • Large employer health insurance: This type of group health plan is designed for employers with more than 50 employees.

  • Workers compensation insurance: It provides medical treatment, wage replacement, and permanent disability compensation to employees who suffer work-related injuries or illnesses. Workers compensation insurance is compulsory in New Jersey, and employers who fail to provide such coverage to their employees can face severe penalties, including a maximum fine of $5,000.

  • Disability benefits: It provides an income if an insured person cannot work or earn an income due to a disability. The two types of disability benefit payments available to New Jersey residents are:

    • Supplemental Security Income (SSI): It provides payments to children and adults with disabilities who have limited income and resources

    • Social Security Disability Insurance (SSDI): It provides payments to individuals who have worked for a given period and have paid social security taxes on their earnings before the disability.

To protect your business and your employees, discuss your commercial health insurance needs with a New Jersey-licensed health insurance agent who has experience working with group coverage and has access to multiple insurers that offer such policies. They will help you compare commercial insurance quotes from those insurers and ensure you have comprehensive and affordable coverage.

COMMERCIAL LIFE Insurance in New Jersey

Commercial life insurance is a type of life insurance policy companies purchase to provide coverage for employees and the business itself.

GROUP LIFE Insurance

A group life insurance is a type of life insurance that covers a group of people. Typically, group life insurance policies are bought by employers or organizations to provide coverage for employees or members of the group. Group life insurance usually comes as part of employee benefits packages. As a result, it is usually less expensive than what each employee would pay for individual life insurance policies with similar coverage. Like other types of life insurance policies, group life insurance allows employees to choose their policy beneficiaries.

In group life insurance, the employer keeps the actual insurance policy (known as the master contract). At the same time, the employees receive insurance certificates that serve as proof of insurance but are not actually the insurance policy. Group life insurance premiums are usually shared between the employer and the employees, but the employer tends to pay the higher share. The most common type of group life insurance is term insurance. Group term life insurance policies are typically renewed yearly, and coverage remains in force until the termination of employment or until the end of the policy tenure. Employees can decide to convert their group coverage to individual policies when they leave the company. However, doing so can lead to higher premiums, but high-risk employees who are uninsurable can still opt for the conversion option.

BUY-SELL Agreements

A buy-sell agreement is commonly known as a buyout agreement, a business prenup, or a business will. This type of agreement is common with sole proprietorships, partnerships, and closed corporations. Buy-sell agreements are legally binding contracts that detail how a partner's share of a business may be reallocated if that partner passes away or otherwise leaves the company. There are two common forms of buy-sell agreements:

  • Cross-purchase agreement: This stipulates that the remaining partners purchase the available business share.

  • Redemption agreement: This specifies that the available business share be sold to the company.

Some companies can opt for a mix of cross-purchase and redemption agreements commercial coverages, where some portions of the available share will be sold to individual partners, and the company will buy the remaining.

KEY MAN Life Insurance

Key man life insurance is a type of life insurance policy that a company purchases for the life of very important persons (like the owner, founders, or top executives) in the organization. The company is responsible for paying premiums and serves as the policy beneficiary. Key man life insurance provides financial coverage if the sudden death of a key person in the organization will negatively affect the business operations. The death benefit from the insurance policy will be used to save the business pending the time a replacement for the deceased person is recruited. If the company is unable to continue operations, the death benefits can be used to settle debts, provide benefits to employees, reimburse investors, or shut down the company in a proper manner.

Business owners should speak with knowledgeable New Jersey licensed and experienced life insurance professionals to get more information on how commercial life insurance options can protect your businesses. The agents who have access to multiple commercial insurance companies can offer insurance policies from different carriers for comparison.

BOP vs. CPP vs. GL

A Business Owner’s Policy (BOP) and a Commercial Package Policy (CPP) are quite similar in that they bundle different types of commercial insurance policies into one insurance policy. Only certain types of businesses are eligible for BOP, and it covers only a few types of risk, but a wide range of businesses can purchase CPP and can customize the policy to meet their specific needs. In contrast, a GL policy covers liabilities like property damage by customers, customer injuries, and advertising injuries.

Business owners who are uncertain about which commercial insurance policies to purchase for their businesses can discuss their business insurance needs with New Jersey-licensed commercial insurance agents who can offer insurance coverage options from multiple insurers. They will help get the right coverage package to match the needs of such businesses.


Business owner's policy (BOP) insurance is a policy that bundles property and liability insurance coverages into a single business insurance policy. It is usually less expensive than the total cost of individual coverages. Commercial insurance companies consider the following factors before determining the cost of BOP:

  • The number of employees

  • Business income/revenue

  • Location

  • Type of business

  • Commercial claims history

Insurers create BOP packages for businesses that face the same kinds and degrees of risks. BOP typically covers:

  • Property insurance: This covers damages to business structures (owned and rented) and contents in the event of covered perils like fire, explosion, wind damage, vandalism, and theft.

  • Business interruption insurance: This covers financial loss resulting from covered perils that disrupt business operations. It can also cover the additional expense of operating out of a temporary location.

  • Liability insurance: This covers liability claims resulting from things the business has done during business operations that cause bodily injury or property damage to third-parties.

Generally, BOPs exclude professional liability, commercial vehicle insurance, workers compensation, or health and disability insurance. Therefore, businesses need separate commercial insurance policies to cover professional services, vehicles, and employees. However, business owners in New Jersey can make arrangements with their insurers on additional coverage components they want in their BOPs based on their specific situation. A business owner should perform risk assessments before shopping for a BOP to inform their decision when choosing a level of coverage. They can do this better with the help of a New Jersey-licensed insurance agent.


A commercial package policy (CPP) allows businesses in New Jersey to bundle multiple coverages like commercial general liability, business property insurance, and business interruption into a single policy. Most CPPs begin with general liability insurance and property insurance. From there, business owners can add a range of coverages to their CPP, including:

  • Commercial vehicle (or fleet) insurance: This covers business vehicles

  • Business crime insurance: This covers losses from business-related crimes like burglary, computer fraud, and employee dishonesty

  • Electronic data processing coverage: This covers costs associated with the loss or damage of electronic data processing media or equipment

  • Equipment breakdown: It is also known as boiler and machinery insurance, and it covers losses from the malfunction of equipment like heating systems, electrical systems, air conditioning, and telephone systems

  • Inland marine: It covers products, equipment, and materials while in transit on land (if transported with a truck or train) or stored at a warehouse

  • Pollution liability: It covers pollution-related costs, including clean-up and personal injury

Generally, CPP does not cover directors and officers (D&O) liability, disability insurance, commercial life insurance, and workers compensation. As a result, businesses would have to buy separate insurance for such coverages. Business owners in New Jersey must understand their businesses' risks before purchasing commercial package policies. Hence, it is good for them to discuss with licensed insurance agents in their localities who can help determine their business risks. These agents will recommend affordable commercial insurance policies that can be bundled into commercial package policies to protect against business risks.


General liability (GL) policy protects businesses from financial losses when they are held liable for bodily injuries, personal injuries, and property damages caused by business services, operations, products, or employees. A standard GL coverage typically covers:

  • Bodily injury and property damage liability: Protects your business against losses arising from third-party property damage or bodily injury due to non-professional, negligent acts or business operations.

  • Personal and advertising injury: It protects your business against liability arising out of offenses like libel, false arrest, slander, malicious prosecution, infringing on another’s copyright, use of another’s advertising idea, and wrongful eviction, entry, or invasion of privacy.

  • Medical payments: It covers costs of third-party injuries caused by an accident that occurred on the business premises or when exposed to business operations. It pays for medical, surgical, ambulance, hospital, professional nursing, and funeral expenses (if the injury unfortunately led to the death of the third-party).

A business owner can purchase a commercial general liability policy separately, as part of a business owners policy (BOP), or a commercial package policy (CPP).

How Much Business Insurance Coverage Do I Need?

The amount of business insurance coverage a company needs depends on the industry, the type of business, number of employees, business needs, level of compensation payments that may be required if something goes wrong, and other specific business requirements. However, ensure you do not under-insure or over-insure your business. Generally, the amount of business insurance coverage you purchase should be able to restore your business to the state it was before the event that led to certain damages. Determining the right business insurance coverage to purchase can be quite tasking. This is why you should seek the service of a New Jersey-licensed commercial insurance agent who would:

  • assess your business needs and restrictions

  • review your current policy to make sure that the coverages are reflective of the current needs and insurance market and can help to update it (if needed)

  • research the locally available plans that fit your business needs and find a better deal than you can find on your own

  • provide you with a free quote on the coverages you need to get for the business

  • help you check for available savings and bundling discounts

  • provide you with the available options of coverage

  • explain how the differences between the options affect you once you start using each insurance product

  • assist you with the commercial policy application process

What is Business Hazard Insurance in New Jersey?

New Jersey is prone to natural disasters like storms, hurricanes, floods, wildfires, extreme heat, drought, landslides, power outages, earthquakes, tornadoes, and tsunamis. For instance, many New Jersey business owners were impacted by Hurricane Ida in 2021. Most of them experienced power outages for weeks, damages to their properties, and mandatory evacuation orders, which led to business interruptions. The United States Small Business Administration had to approve $178 million disaster loans for New Jersey businesses to repair, rebuild or replace their properties. It would have been challenging for affected business owners to pay for such repairs out of their pockets. Hence, the need for businesses to purchase business hazard insurance to be protected in the event of natural disasters. Business hazard insurance provides coverage for business properties, whether owned or rented.

Business hazard insurance is not mandatory in New Jersey, but lenders might require business owners who finance their business through loans and other credit forms to have it. Business hazard insurance premiums vary depending on factors like property location, value, age, and replacement cost. Business owners cannot buy business hazard insurance as a standalone policy. Instead, they have to purchase it as part of a business owners policy (BOP) or Commercial Property Policy (CPP). Business owners should talk with New Jersey-licensed insurance agents before purchasing business hazard insurance policies so that any policy they buy can address their business needs.

What is Specialty Business Insurance?

Specialty business insurance is a type of commercial insurance designed specifically for businesses that need unusual coverage. Specialty business insurance covers specific risks or unique objects that standard commercial insurance policies exclude. Any type of business (like skydiving companies and construction companies) that provides high-risk services should consider purchasing specialty business insurance. Some examples of specialty business insurance policies include:

  • Flood coverage: It covers damages to business structures caused by floods. Most commercial property insurance policies in New Jersey do not cover flood damages, so you should get specialty business insurance if your business is located in areas that are prone to floods.

  • Liquor liability coverage: This type of coverage is meant for companies that sell, serve and distribute alcohol. Liquor liability insurance covers claims of property damage or bodily injury drunk customers cause after consuming alcohol served by the insured business.

  • Identity theft insurance: It covers costs associated with identity theft, including money spent on phone bills and legal help.

  • Title insurance: It covers financial losses sustained from defects in a title to commercial real estate.

  • Travel Insurance: It covers properties and business employees while in transit. Travel insurance typically covers medical expenses, lost bags, or travel cancellation costs.

  • Boat insurance: It protects businesses that use boats like boat touring businesses or a mini-cruise line against theft, damages to the boat resulting from collisions, vandalism, natural disasters, and medical bills for injuries sustained while using the boat

  • Commercial renters insurance: It provides coverage for property rented by the business.

  • Directors and officers liability insurance: It provides coverage for key officers in a business from losses due to lawsuits or other claims while serving the business

Most insurers will provide templates outlining what the specialty business insurance policies they sell will cover. Hence, business owners should clearly identify their business needs before purchasing specialty business insurance policies. However, business owners can contact licensed insurance agents in New Jersey when they notice that the templates provided by their insurers do not cover their needs. Experienced commercial insurance agents will assist in getting the right specialty business insurance policies that will suit their business needs.

Surplus Lines Insurance in New Jersey

Surplus lines insurance in New Jersey offers financial coverage for risks not covered under standard commercial insurance policies. Unlike standard commercial insurance policies, business owners can purchase surplus lines insurance from insurers not licensed in New Jersey. Surplus lines insurers do not belong to the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA). Therefore, your insured business might be unable to obtain claims payment if the surplus insurer goes bankrupt. Contact your commercial insurance agent_ _to discuss the risks of getting surplus lines insurance for your business.

What is an Example of Surplus Lines Insurance?

Some examples of surplus lines insurance in New Jersey include:

  • Coverage against flood damage for flood-zone area

  • Liability and hull coverage for an expensive boat or yacht

  • Liability insurance for high-risk businesses

  • Disability insurance for an athlete

What Purpose Do Surplus Companies Serve in New Jersey?

In New Jersey, surplus lines insurance helps residents cover financial risks that are uninsurable in normal insurance markets. Most insurers in New Jersey may refuse to provide coverage for certain risks due to lack of capacity or there is a high possibility of such risks occurring. When an insurance company declines coverage for a particular risk, business owners can search for surplus coverage to help protect against such risks. With a high-risk business, surplus lines insurance might be the only option to protect your business. Contact an insurance agent licensed in New Jersey who can recommend surplus lines insurers that can sell commercial policies that can cover your unique business needs.

Why Would Someone Place Their Insurance with a Surplus Lines Broker?

New Jersey residents can choose to place their insurance with surplus lines brokers operational in the state if they cannot find any alternative protection for high risks or expensive coverages. In addition, surplus lines brokers would help business owners find coverages for risks with non-admitted insurers that admitted carriers in New Jersey have refused to insure. However, business owners often can not contact surplus line brokers directly. Instead, they have to work with New Jersey-licensed insurance agents.

How are Surplus Lines Insurers Regulated in New Jersey?

The New Jersey Department of Banking and Insurance (NJDOBI) regulates insurance activities in the state. There are more than 260 active surplus lines insurers in New Jersey, including:

  • Domestic surplus lines insurers: These are insurers formed under the state of New Jersey.

  • Foreign surplus lines insurers: These are insurers formed under the laws of another state in the United States, other than New Jersey.

  • Aliens surplus lines insurers: These are insurers formed under the laws of another country that is not the United States.

Surplus lines insurers are permitted to insure all items on the exportable list. They are exempted from providing coverage for railroad or aviation risks involving interstate or international commerce. Additionally, they are not allowed to provide vessels, crafts or hulls, cargoes, marine builders’ risks, marine protection, indemnity, or other risks like strikes and war risks. The affairs of surplus line insurers in New Jersey are monitored by the NJDOBI by:

  • Ensuring that all surplus line insurers maintain minimum capital and surplus of $15 million or the minimum capital and the surplus amount required in New Jersey (per N.J.S.A. 17:17-1), whichever is greater to remain in operation

  • Ensuring that all surplus line agents and insurers within the state have a valid license

  • Ensuring that all surplus lines insurers have SLA Numbers

  • Ensuring that all surplus line insurers provide copies of the information for all surplus line policies or documents for review and recording

  • Preparing monthly and quarterly reports of each agent’s business and surplus line policies

  • Collecting all surplus lines taxes, which is 5% of the total premium

  • Ensuring that domestic surplus line insurers with no direct premiums written in New Jersey pay a filing fee of $100

  • Ensuring surplus lines insurers have sufficient information on annual renewal requirements

New Jersey business owners can review the surplus lines page on the NJDOBI website to get more information on surplus lines. A business owner can send surplus lines insurance-related complaints to the NJDOBI Consumer Protection Services Consumer Assistance Unit online or by submitting an Insurance Complaint Form to:

New Jersey Department of Banking and Insurance

Consumer Inquiry and Response Center (“CIRC”)

P.O. Box 471

Trenton, NJ 08625-0471

Phone: (609) 292-7272

Fax: (609) 777-0508 or (609) 292-2431

Discuss your commercial insurance needs with a knowledgeable New Jersey insurance agent.