Business Insurance Registration In Raritan Township, Hunterdon County

New Jersey Governor Murphy signed P.L. 2022, c.92 on August 5, 2022. Under this new state law, it is now illegal for any business or owner of a rental unit not to have liability insurance. The New Jersey law has left the implementation and enforcement of this new law to the local municipality.  Previously, there was no requirement under New Jersey (or Federal for that matter) law requiring a business owner to purchase Liability Insurance.

Flemington Borough in Hunterdon County, New Jersey introduced their local ordinance to implement this registration provision last fall. If you own a business or a rental unit(s) in Flemington Borough, you need to complete a registration and provide them with proof of insurance.

Recently, Raritan Township in Hunterdon County, New Jersey has issued regulations for their local ordinance to implement the State law. For Raritan Township, you will need a certificate of insurance and to register with the Township. They have an online portal to upload your certificate, complete your registration, and pay your $20 registration fee.

Because of the overlap in zip codes and mailing addresses between the Borough of Flemington, Raritan Township, and parts of several other townships, we are unable to quickly identify our clients located in Raritan Township.

If you are located in Raritan Township and own a business or own rental units (of any kind), please contact us so we can provide you with an insurance certificate that you can use for your business registration.

Please call us at the office or reach out to us here. We need to know the following information to issue these certificates:

  • The name of the business (or owner of the rental unit).
  • The location or address of the business or rental unit.
  • The township or borough where the unit or business is located.

We are here to help you manage your business and personal insurance program. Please feel free to contact us anytime if you have questions regarding the matters discussed in this article or on any aspect of your insurance plan.


What You Need to Know About Increasing Inflation Rates and Insurance

We are seeing the effects of high inflation in every aspect of our lives. Certainly, we are impacted by higher prices in food, energy, and consumer goods. Combined with the problems we are still feeling from supply chain issues that developed during the pandemic, it is no wonder that inflation is a major national issue.

Let’s review a few key areas where we will see how inflation will affect your insurance rates.

Higher Inflation Rates and Insurance

Higher inflation changes your insurance program as well. The most obvious effect is that we are seeing carriers start to increase their rates after a few years of flat pricing.  

While the rate of increase in insurance premiums will not be quite as high as you see in other areas of the economy, we think it is reasonable to expect increases of 5-8% in most of your insurance products, so it is more important than ever for us to work together to make sure that you are doing everything possible to get the best value from your insurance program.

Limits of Liability Insurance

The industry has noted an alarming rate of increase in judgment and settlement amounts over the last several years, even before we started to see consumer prices affected by the rate of inflation. Interestingly, some in the insurance industry were calling this, “Social Inflation” because there was no other fact or set of circumstances to account for these dramatic increases. 

You should review your limits of insurance to make sure that they are keeping up with the times. For example, if you have carried an Umbrella policy with a $1,000,000 limit for several years, it is probably time to increase that limit to $2,000,000. 

Higher Court Settlements

The insurance industry has noted a disturbing trend of much higher court judgments and settlements over the last several years. While this may not be related to economic inflation, the industry has been calling this trend a form of social inflation. 

We strongly urge our clients to consider their liability limits for both automobile and personal liability. A remarkably high percentage of our clients have Umbrella Liability policies that extend your liability limits above those on your home and auto policies. It may be time to purchase an Umbrella if you don’t already have one, or if you do, it may be time to increase your limits.

Increased Construction Costs

Another significant effect of high inflation is the skyrocketing costs of construction. This is critical for you because your property insurance for the home you live in or rent to others is based on the replacement cost rather than the market value. 

While we have seen some modulation in market values, we have seen little backtracking in construction costs. Most insurance companies try to keep pace with inflation by increasing the amount of your property insurance limits each year as the policy renews, but we have serious reservations that these increases have been enough to keep pace with the rate of inflation. The result of this is that you may find yourself a bit underinsured on your property coverage.

Your building, equipment, contents, and supplies are more expensive to rebuild or replace today than they were a year ago. Your insurance policy may have accelerators for some of those values, but that may not be adequate for the actual rate of inflation.  

We strongly recommend that you review your limits of property insurance and reach out to us to discuss increasing them to make sure that they are adequate.    

How Can We Help You?

At G. S. Newborn, we are committed to doing our best work to help you minimize your insurance premiums. Each year before your renewal, we search our markets to see if we can generate a better value for you. We do this proactively. For everyone. Every year. 

If we find a compelling differential – either in coverage or price, we contact you. Of course, we are happy to speak with you anytime to review your insurance program.

Talent Acquisition

Business pundits are saying that finding good employees is the number one problem facing business owners today. One way that you may be able to make your business more attractive to new employees is to spruce up your Employee Benefits offerings. We offer a full range of employee benefits – everything from health insurance to pension programs.  

Estimating Costs

We have some tools to help you estimate the replacement cost of your residential buildings.  Many of our carriers also have endorsements that pay you more than the amount shown on your policy. The bottom line is to contact us if you have concerns about your limits insurance.

Contact Us Today!

We want to be your trusted insurance advisor! Please feel free to call on us anytime – you do not have to wait until your policies are about to renew. 

Let’s make sure that your coverage is keeping pace, we are adjusting your program to your ever-changing business needs, and that we are up to date on any changes in your operations. Together we can get through this difficult cycle.

Business Insurance Registration Required in New Jersey

Until recently, there was no requirement under New Jersey (or Federal for that matter) law requiring a business owner to purchase Liability Insurance. This all changed when New Jersey Governor Murphy signed P.L. 2022, c.92 on August 5, 2022. Under this new state law, it is now illegal for any business or owner of a rental unit not to have liability insurance. The New Jersey law has left the implementation and enforcement of this new law to the local municipality.

Flemington Borough in Hunterdon County, New Jersey is one of the first municipalities to act on this new law. They have issued an ordinance which requires businesses and owners of rental units to register with the Borough, pay a $15 fee, and provide the Borough with proof of liability insurance.

The following entities must register and provide proof of insurance:

  • Businesses, which shall mean, any person intending to sell or dispose of or to offer to sell or
    dispose of any good, wares, merchandise or render any services for fees within the Borough.
  • Owners of single rental dwelling units
  • Owners of multiple dwelling rental units
  • Owners of multi-family homes that include rental units, even where one unit is owner-occupied

Flemington Borough is sending out notices to those properties affected. If you do not receive one, we
have copies for you.

How much insurance is required?

The New Jersey law now requires the owner of a business or a rental unit or units to carry liability insurance of no less than $500,000. The owner of a multi-family home which is four or fewer units, one of which is owner-occupied, is required to carry limits of no less than $300,000.

How to Provide Proof of Insurance?

While the Flemington registration form asks you to attach a copy of your liability policy, the State law requires you to file a Certificate of Insurance. We believe that in general, it is a bad idea to share your insurance policy with anyone other than your mortgage company. A Certificate of Insurance is a more concise and efficient way to share proof of your liability coverage without disclosing other personal information. For example, your insurance policy may include a schedule of valuable property, like jewelry or artwork that is specifically covered by your policy.

We are happy to issue a Certificate of Insurance for your business or property for the Borough of Flemington. Of course, there is no charge to you for this service. To order a certificate of insurance, please call our office or send a request to We will need to know the name of the business, the location address of the business or property in question (many of our clients have different mailing addresses than the location of their business or rental units).

If you are in a municipality other than Flemington Borough that enacts a registration requirement, please let us know and we will send you a Certificate of Insurance. We are here to help you manage your business and personal insurance program. Please contact us anytime if you have questions regarding the matters discussed in this article or on any aspect of your insurance plan.

What is an Additional Insured Endorsement

It seems an almost normal course of business these days to be asked to name a contractor, vendor, landlord, or other business associate as an additional insured on your liability insurance policies.  This article will delve into the details of the additional insured endorsement, how you do this, and the relative merits and risks of giving this status to your business associates.

Who is an Insured Under Your Policy?

Your basic liability policies define quite specifically who is insured under the policy.  The definitions are typically broader than you think but vary from policy to policy.  Typically, liability policies include coverage for the entity that is shown on the declarations page as the named insured.  If you operate under several different entities, all of them should probably be listed as a named insured.  For example, if you operate your business as a corporation where you are the sole or majority shareholder out of a building that is owned by a Limited Liability Company (LLC) in which you are the sole or majority owner, both the corporation and the LLC should be named in the declarations page as the insured.  You, as an individual are also covered by the definitions in the policy as respects your ownership of the entity.  It is also typical that corporate officers, and employees are also insureds under the policy in respects to their duties as such.  In an automobile liability policy, any driver of an insured vehicle is also an insured if they are driving the vehicle with permission.

It is customary but not necessary to have trade or fictitious names – sometimes called a doing business as name, listed as an insured on the declarations pages as well.  This would generally be descriptive in nature and not affect your coverage as long as the business name is fully owned by an entity that is named on the policy.  Getting the names on the declaration page correct, is the first step in making sure that your liability coverage is providing you what you need.

What is an "Additional Insured"?

Adding someone as an additional insured on your policy is the process of you sharing your coverage with that additional insured.  By sharing your coverage, you are diluting your limits of liability.  In other words, if you share your coverage, there is less coverage left for you.  The endorsement typically adds the additional insured to the list of entities who are insured under the policy.  Keep in mind that liability insurance is third-party coverage.  This means that the insureds are covered for allegations that through their negligence, they have caused injury (bodily injury or property damage) to another person or entity.

Why are You Being Asked to Name a Business Associate as an Additional Insured on Your Policy?

This is a technique of risk transfer where one party is obtaining protection through another for liabilities that arise, presumably through their business interactions.  It is customary for a landlord to require as a provision in a lease a tenant to indemnify, defend, and hold them harmless for liabilities that arise from the tenant’s occupancy of the premises.  In this case, the terminology, “indemnify and defend” could be stated as “name as additional insured on your insurance policy.”  Some leases contain both of those requirements.  It is also routine for a General Contractor to require additional insured status on the liability insurance policies of a Sub-Contractor.  I am not saying that these requirements are good or bad; they are just normal practices within those industries.  

How do You Add Additional Insured Coverage To Your Policies?

There are many different endorsements and techniques that do this, and we try and find the method that makes the most sense for each specific situation.  We can break the types of endorsements for adding additional insured status into two categories.

Blanket Endorsement

A blanket additional insured endorsement is quite common these days.  Under this method, your policy contains language that grants additional insured status to any party requiring such status under a written agreement.  The premium charge for this coverage is likely built into your policy and you do not pay for each party that is granted such status.  It is important to remember that there must be a written agreement between the two parties for the additional insured status to be in effect.  While this is a common method, there are problems with this technique and often insurance requirements in specific contracts and agreements cannot be satisfied with a blanket endorsement.

Specific Endorsement

This is an endorsement added to your liability policy that specifically names the additional insured and outlines the scope of coverage that applies to the additional insured.  Insurance companies may charge a premium for these endorsements each time they are added to your policy. There are many diverse types of additional insured endorsements with varying levels and degrees of coverage for the additional insured.  

Other Related Requirements

When you are required to name a business associate as an additional insured, it is common that you may also be asked for other coverages such as:

  • Primary and Non-Contributory: This is an endorsement that makes your policy primary over insurance that the additional insured may purchase for themselves.  
  • Waiver of Subrogation: This is an endorsement that prevents your insurance company from seeking recourse from the additional insured even if they are responsible for the loss.  
  • Cancellation Notice: Your policy provides legal requirements of notification if the insurance company is going to cancel or non-renew your policy.  This endorsement makes the insurance company for notifying the additional insured about a pending cancellation as well.  Keep in mind when you add this endorsement to your policy, your business associate will get a notification from the insurance company if your payment is late which leads to a pending notification of cancellation of coverage for non-payment.

We spend a significant amount of time each week reviewing the insurance provisions of agreements for our clients and advising them what is required to meet those requirements.  It works best if we review the agreement before you have completed negotiations on the project.  Our experience tells us that some of these agreements are not negotiable – but many are.  Helping you assess the risk you agree to assume through business agreements seems logical to be part of the service a competent insurance advisor provides.  We are happy to be that advisor for you.

man in office working on computer

Ten Tips for Proper Cyber Hygiene

I like lists. Lists help me stay organized and help me break big, overwhelming things into bite-size pieces I can get done.

One of the big, overwhelming things facing business owners these days is cybersecurity. You don’t have to be an IT person or software expert to gather that we are in perilous times when it comes to cybersecurity, data safety, and protecting your business information.

Just a few months ago, insurance companies were eager to “add on” cyber coverages to any policy for a minimal amount of additional premium, where now they want to underwrite this exposure (to make sure that you don’t really need it before they agree to sell it to you).

By the way, “not needing it” is where you want to be. Cyber insurance should be for a freak occurrence that you do not expect rather than a method to deal with sloppy or non-existent cyber standards and procedures.

Top Ten List for Proper Cyber Hygiene

I did some research and produced a Top Ten list for proper cyber hygiene. Hygiene is a great word to use for this because you need to have consistent standards and procedures that you incorporate into your operations to make sure that you have good cyber health and well-being.

If you have questions, or want to discuss your cyber hygiene, call us.

10. Install Antivirus and Malware Software

First, use a reputable company that is highly rated. Keep up with the expiration dates of your software programs and purchase a package that fits your business needs. If you schedule routine upgrades, do not skip them.

9. Keep Your Hard Drive Clean

Delete old and unused programs. Also, reformat your hard drive on a scheduled basis.

8. Use Network Firewalls

Firewalls can be an important method to prevent unauthorized users from accessing your website and other online data. Don’t cheap out when you install your firewalls.

7. Back Up All Systems Regularly

Back up your files and programs offline, to an external hard disk, or to the cloud. Do this on a schedule that fits your business operations. If you have a security breach, you can use your backup to create a “clean” data set to resume your operations. From a physical perils point of view, make sure that your external hard disk is stored or kept somewhere other than the same room as your server or computer.

6. Update Software Regularly

Make sure that all your programs have the most up-to-date versions, especially any security software that you use. You want to have the latest protections that are added to each program.

5. Use Multifactor Authentication Wherever Practical

This creates another layer of security and makes your data harder to access. A multifactor authentication procedure adds a second password or code to be entered to access a program or portal. You may even be able to add biometric devices to particularly sensitive programs or data.

4. Employ Device Encryption

Look into encryption of email, other communication programs, and how you connect to other devices such as laptops, and remote users.

3. Do Not Open Suspicious Emails, Links, or Attachments - Think Before You Click

More than any other cyber threat you may face, problems are caused by not thinking before you click. Hackers and cyber evildoers are constantly refining their techniques to get you to divulge sensitive data or unknowingly install malware on your computer. The best defense is never open suspicious email, attachments, or links. Constantly reinforce this to your employees and staff.

2. Use Strong Passwords and Change Passwords Frequently

It sounds so simple, but this is one of the easiest methods to protect your data. Have a schedule for changing your passwords and take the time to make them complex and difficult to guess. Do not use the same password all the time! There are systems you can install that do some of this for you, such as Password Manager from Google. Check with your IT consultant to see if any of these are a fit for your business.

1. Purchase Cybersecurity and Data Breach Insurance Coverage

Even with an excellent hygiene plan and dedicated implementation and monitoring, you may not be fully protected. Here, your fallback plan should be a strong insurance program. We’re here to help you evaluate your needs and find the right insurance to meet those needs. Contact us now!

a judge's gavel in courtroom

How Much Liability Insurance Is Enough?

Liability insurance is what you purchase to protect you, or your business entity, from the allegations of injury from a third party. Luckily, most of us have not had a worst-case scenario where we face financial ruin from the results of a mistake arising from our personal or business activities. But those worst-case situations happen. Let’s look at a few claim scenarios.

Examples Of Liability Claims

1. Underage Drinking

A high school senior attends a party at a close friend’s home intending to stay overnight. Alcohol is served at the party with the knowledge of the friend’s parents under the provisions that all those drinking will surrender their keys and sleep over. During the night, the senior wakes up, walks home, and sneaks out of the house. While walking along the highway, he is struck by a vehicle and gravely injured.

While the parents took what to them seemed reasonable precautions to protect their guests, the fact is that they provided or allowed underage children to drink in their home. They will have some responsibility under the law for the injuries to their child’s friend. How much insurance is enough if you are the friend's parents?

2. Contracting Mishap

A home improvement contractor gets a job to replace a deck for a client. The contractor purchases the lumber for the new deck from the normal supplier and purchases appropriately graded lumber for the specifications of the project. Several years after the job is completed and paid for, the deck collapses and twelve people are severely injured during a family celebration.

The home improvement contractor may have done everything correctly while building the deck, including following all township inspection requirements. However, if the lumber is found to have been defective, there is no doubt that the contractor, along with the supplier, and the manufacturer of the lumber will be held legally responsible for the injuries caused by the work that the contractor performed. How much insurance is enough if you are the home improvement contractor?

3. At Fault When Driving

The operator of a vehicle is driving on a typical crowded highway in New Jersey (this could be you, your child, or your employee driving one of your business vehicles), when the driver is distracted and does not see the line of traffic that is stopped on the highway. There are any number of events (occurrences, activities, or happenings) that you can fill in as the distraction, such as receiving a text message, spilling ketchup from the fast-food sandwich that is being consumed, or daydreaming.

Knowing that there is not enough room to stop the vehicle, the driver swerves into the right lane and then into the shoulder of the road, stopping without hitting or getting hit by another vehicle. However, the quick maneuvering causes a school bus that was in the right-hand lane to stop suddenly, causing several students to hit their heads on the seats in front of them. An ambulance takes several of these students away to receive treatment.

The owner of the vehicle whose driver cut off the school bus will have some responsibility for the injured students on the school bus. How much insurance is enough if you own the vehicle that ends up in the shoulder?

How Much Liability Insurance Would Be Necessary In These Claims?

In each of these claim scenarios, there is a high potential for civil litigation. So, the key question here is how much insurance would be enough?

While it is impossible to know in advance or to predict the outcome of these scenarios, there are a few things that we understand based on trends in our legal system.

Legal System Trends

Legal Defenses Are Expensive

The cost to defend these claims is much higher than you may think. For most liability insurance policies, the cost of defense is not part of the limit and is not subject to a dollar limitation. However, it is unrealistic to assume that an insurance company will spend more money to defend a case than it would cost them to settle it or to pay out the policy limit.

In other words, if your insurance limit is too low, you could encourage the insurance company to settle for total limits rather than defend you throughout the entire course of the claim. The insurance company does this through a “reservation of rights” notification which advises you that the case may exceed your limits and suggesting that you have your own legal representation (attorney).

Outcomes Are Unpredictable In Civil Court

Judgements in civil court have exploded over the last several years. The insurance industry trade press has dubbed this phenomenon “social insurance.” It has gotten so bad that many question the ability of the insurance industry and the legal profession to predict the outcome of civil litigation. Lack of predictability of these outcomes has been a heavy contributor to the increase in liability insurance costs over the last few years.

Are You A Target?

The legal system has built-in incentives for attorneys to seek judgements over insurance limits when the defendant in the suit has significant assets.

Guidelines To Help Determine Liability Insurance Coverage

There are several guidelines that you can use to help direct you in selecting an appropriate level of liability insurance coverage for you.

1. Consider Your Net Worth

If you have significant assets, you should have significant limits of insurance. This applies to business operations as well. If you own a building worth $3,000,000 with no mortgage and you have a liability insurance limit of $500,000, you may not have enough liability insurance.

2. Consider Your Conscience.

If a mistake of yours causes injury to another person, how would you feel if you do not have enough insurance to provide needed care to that person and their family.

3. Consider An Upgrade

If you have always carried a one-million-dollar limit, perhaps it is time to upgrade your limit simply because, over time, you need more.

4. Consider The Cost

You will be surprised how inexpensively you can increase your liability coverage.

Everyone's Liability Needs Are Unique

In summary, there is no magic formula to determine the limits of liability insurance that work for you.

We hope this article has helped put the need for higher limits in context for you. Please contact us to discuss your limit and to find out how easy it is to increase your level of protection.

man loading delivery van with boxes

Risk Management For Contractors and Business Owners

What Is Risk Management?

Risk Management is the process of dealing with potential loss by a business or operation. The scope of Risk Management goes beyond purchasing an insurance policy as there are many areas of loss that may not be addressed by any specific insurance policy.

The phases of the Risk Management Process typically include:

• Identifying exposures (possible losses)
• Measuring those exposures
• Developing a plan to mitigate, transfer, or fund the potential losses (an insurance policy is a funding method)
• Implementing the plan
• Reviewing the effectiveness of the plan and making any necessary adjustments

This is a never ending analysis that must be adjusted constantly to meet the pace of a dynamic business and the environment in which the business operates.

As your insurance agent, we can be an integral part of your risk management team. Along with your tax advisor, attorney, safety coordinator, and executives, we can help you review all aspects of risk for your business and help you coordinate an integrated Risk Management Plan.

Most contractors and small business owners do this intuitively every day as they measure their risk-versus-reward for every activity, project, bid, and job that comes up. We can help you formalize this process which can be a key factor to allow for the growth of the business.

A Good Way to Start Risk Management

If you are not ready to do a formal plan that includes all the steps in the risk management process, phase in a plan by focusing on the largest categories of risk that most businesses face. We can divide your largest exposures to loss in the following categories:


Your business may own various types of property. How would a significant loss to your business property affect the future viability of your business?

• Buildings
• Personal property in your building or elsewhere
• Tools and equipment that may be at your premises, in transit, or at a job site
• Property in your care or custody that is owned by others
• Property in transit – Are you shipping goods to or from your premise? How are they shipped and who is responsible for that property?
• Loss of use of property – Both buildings and other property (In these days of supply flow concern this may be a much larger factor to your business operations than in the past.)

Human Loss

Your key employees may be the unique advantage that makes your company successful. Yet we spend very little time thinking about them as a critical piece of the business and protecting the business from the various losses that can happen to our “human assets”.

• Losing a Key Employee by sickness, death, retirement, or to the competition – Do we have a plan to help the company survive each of these possibilities?
• Business Perpetuation and Continuity – What happens to the business if one partner/owner gets sick, becomes disabled, or dies?
• Employee Care – Do you have an employee benefits plan that is valuable to the employee? What other employee retention program is in place?


What risk do you face from injuries to others?

• Bodily Injury – To employees, contractors, bystanders, or those who use your products or services. Can you mitigate this risk?
• Property Damage – What potential risk to property do your operations face? Don’t forget operations of automobiles, trucks, and equipment which may by your single largest exposure to a catastrophic liability loss.
• By Contract - Each day you may sign agreements under which you assume liability. Are you reviewing these agreements to make sure that loss is acceptable or at least covered by your insurance? (We can help you with this.)


Think beyond “environmental” to the full scope of the social and business environment in which you operate.

• Social Risk – Are you keeping pace with important changes in society that could increase your exposure to loss? This goes beyond “political correctness” and is a growing threat to all business owners.
• Regulatory Risk – Do you take part in industry associations to keep up to date on potential threats to your business or industry from regulations or laws that may threaten your ability to do business as currently made up? Are you current with all regulations and statutes?
• Competitive Risk – Are you paying attention to changes in society that could affect your business? What (or who) are the business disruptors in your industry?

G. S. Newborn & Associates Can Help

We have experience working with business owners in developing a Risk Management program. We can coordinate with your other advisors to do a full risk analysis for your company, or we can focus on whichever area of the process you feel will most positively affect your business.

For many of our clients, we perform the following services, which are steps in mitigating risk and part of a good Risk Management Program for any business:

Contract Review

We are always available to review a contract or agreement to give you an analysis of how the agreement fits with your insurance program. From a lease agreement to a proposal contract, we will let you know what liabilities you may assume under the agreement and how your insurance policy matches the insurance provisions and requirements of the agreement.

Subcontractor Agreements & Certificate of Insurance Program

If you use subcontractors, you should have an agreement where you transfer reasonable risk and liabilities to the subcontractor working on your behalf. You also must require them to have adequate insurance. We can help you develop these agreements & requirements and administer them to you so you know all subcontractors are meeting your requirements.

Employee Benefits Review

Having a meaningful employee benefits plan is not only critical in terms of expense, but it can be a centerpiece in your employee retention program as well. Not all plans are equal, and in your quest to manage expenses, you may cause increased employee turnover and dissatisfaction.

Let our experienced benefit advisor help you develop an employee benefits plan that maximizes your expenditures so you get the most bang for your buck from your employee benefits.


We can customize programs that are unique to your business or industry. We think outside of the box to find the best way to protect your business.

What Do These Services Cost?

We provide the above services to our clients with no additional charge. We think an informed client is a better client!

Can you afford not to have a Risk Management Plan? Let’s talk…

- Gary S. Newborn

two people running through files together

Surviving Your Workers Compensation Audit

If Benjamin Franklin were around today, he might change his famous quote to, “In this world, nothing is certain but death, taxes, and a workers compensation audit.”

Why Is Your Policy Audited?

The premium for workers compensation insurance is based on the payroll to employees and the cost of uninsured contractors during the policy period. At the beginning of the policy term, your policy is set up based on a projection of your payroll. It makes sense that at the end of the policy term, an adjustment will then be made. It'll be either up or down based on your actual payroll.

Another way to think of this is that payroll is the unit that the insurance mechanism uses to measure your exposure to loss in workers compensation insurance. A payroll audit must be done to make sure that your small business does not pay the same premium that a much larger company would pay.

What Information Is Required?

The insurance company will ask you to produce certain documentation so that your payroll levels and cost of sub-contractors can be validated. Here is a list of the most common items that you will be asked to produce.

  • A payroll report (from your payroll service, if possible) showing a summary of gross wages by employee for the policy period. The summary should include regular time wages and overtime wages.
  • Copies of your Federal payroll tax filings—941 Forms and your State payroll tax filings—and WR 30 Forms that correspond to the quarters that encompass most of your policy period. Don’t worry if your policy dates do not match the quarters perfectly as that is normally the case.
  • The insurance company will typically ask for evidence of your gross sales for the policy period. You can provide this with a balance sheet/profit-and-loss statement that matches the policy period (if you can generate this internally). If you cannot do a policy period statement, do the closest year end statement that you can. While your gross sales are not used in determining your premium for workers compensation, they will ask for this as a check on the overall size of your business.
  • Statement of sub-contractors used during the policy period. The best way to do this is to track these expenses during the year in your accounting system and to print a report that shows each sub-contractor and the checks written to them during the policy period. The entry should show a date of the check and the amount of the check. If you cannot show a report for the use of sub-contractors, the insurance company will ask to see your general ledger or your checkbook. They'll then search for all expenditures to sub-contractors during the policy term.
  • Copies of Certificate of Insurance for each sub-contractor shown on your sub-contractor report.
  • Copies of your 1099 report for the most current year end.

Sub-Contractors and Workers Comp

An insured sub-contractor does not add any premium to your workers compensation policy. However, an uninsured sub-contractor will generate a charge just as if it was payroll. This is a double penalty because your cost of sub-contractors includes labor and materials.

It is very important that you collect insurance certificates from all sub-contractors. We recommend that you have a written agreement with all sub-contractors to outline the coverage that is required, as well as including indemnification, hold harmless, and additional insured requirements.

G.S. Newborn & Associates, Inc. Adds Value To Your Insurance Program

We can help you institute a certificate management and a sub-contractor agreement program, and are happy to help you administer this program. You should never have to pay a premium for an uninsured sub-contractor! We include this service for our commercial clients at no charge to you.

Do Your Audit Promptly

The insurance company is not going to chase you to do your workers compensation audit. Under a new regulation in New Jersey, an unaccomplished audit results in an estimated audit with a much higher premium level than your projection. So, if you do not complete your audit in a timely manner, you will receive a large additional premium audit invoice based on an arbitrary payroll level increase.

We urge you to respond right away to an audit request. If you cannot reach the auditor, please contact our office and we can intercede for you.

After The Audit

Once the audit is complete, you will receive an audit endorsement to the expired policy. There are three possible results: no change, additional premium, or return premium.

If you owe additional premium, the insurance company will send you an invoice for that premium. Keep in mind that this premium will be billed in one installment. Most of our carriers will agree to spread out this premium over two or three months depending on the size of the audit premium. You just need to contact us to arrange this for you.

If they owe you a return premium, you will receive a credit or check for this amount from the carrier.

When your audited payroll levels were much higher than your projected payroll, you will obviously have an audit premium due. Most insurance companies will also adjust the payroll levels on your current policy, which has already been issued, which will generate an additional premium invoice as well. This is a bit of a double hit so we suggest you try to make your payroll projection for your policy as accurate as possible since understating your payroll can do a number on your cash flow.

G.S. Newborn Is Here To Help

We are available to help you with all phases of this process. Please contact us if you have any questions about your workers compensation audit or any aspect of your insurance program.

first person closeup view of handshake

How, And From Whom, You Buy Your Insurance Matters

We are inundated each day with branding, messaging, and advertising. With the advances in technology and social media, it seems to be everywhere all at the same time. And it works.

We cannot help but be influenced by a catchy jingle, a compelling story, or the assault of repetition of a message that we hear dozens and dozens of times each day. But with insurance, the story that you are hearing, the messages that you are receiving, and the brands that come to mind may not be telling you the entire story.

You should note that I am not objective in this matter. I am an independent insurance agent with almost forty years of experience–so I have a definite point of view. I ask that you read further to hear me out–my budget for social media, branding, and advertising is virtually non-existent, so this is my only way to tell our side of the story.

What Is An Insurance Agent?

In basic terms, an insurance agent is any person who is licensed to review, discuss, and effect insurance coverage in each State (yes, insurance is regulated by the States). In practice, even though all agents are licensed with the State in the same manner, there are a variety of types of insurance agents.

Captive Agent

A captive agent is a licensed insurance agent who represents a single insurance carrier. These agents are typically the sales arm of the insurance company. Mostly, these agents may only sell you products from their “captive” insurance carrier.

Direct Agent

A direct agent is a licensed insurance agent who is an employee of an insurance carrier. These agents, much like the captive agents mentioned above, are generally the sales arm of the insurance company for whom they work and limited to offering you products from only their employer insurance company.

Online Representative

An online representative is someone working for an insurance provider, typically an insurance company, but perhaps a technology or other company involved in the distribution of insurance products who walks you through an automated process to purchase insurance coverage. They may license these representatives in your State, or they may work “under” a licensed insurance agent. They typically offer products and services from a single insurance company.

Independent Agent

An independent agent is a licensed insurance agent who represents multiple insurance carriers because of appointments (contracts) that are entered with each carrier that outline the specific duties and responsibilities of the agent and the insurance company.

These agents may offer you a range of products from all the insurance companies with whom they are contracted. The Agency often consists of many licensed insurance agents who work together to provide ongoing service to their clients.

Over my career in insurance, I have met competent and professional practitioners of insurance from each category and type of insurance agent. Each consumer will make their selection of how they wish to purchase insurance based on their own needs and goals from the process.

A Real Life Case Of How Purchasing Insurance Matters

We recently worked with a homeowner who was being cancelled by their insurance company because of too many claims during a five-year period.

In NJ, each insurance company files guidelines for eligibility (with the State) that they must follow. All of them include a specific number of claims over a period that allows them to terminate insurance coverage. It is typical for carriers to have a guideline of three claims over either three or five years as the tipping point.

In this case, the homeowner had three claims over a five-year period. One claim was from wind damage and the insurance company paid out $1,200. The second claim was reported by the homeowner for water that seeped into their basement during a period of heavy rainfall. This claim was declined by the insurance carrier because this type of loss is typically not covered by a homeowner policy. The third claim was for storm damage and the insurance company paid out over $40,000 for the damage. The third claim during the period for that insurance company generated a non-renewal notice, and this homeowner needed to find new insurance coverage.

There are many points we can gather from this real-life situation.

  1. The second claim perhaps should not have been reported. A competent agent would know that this is not covered. Many carriers will count every claim inquiry, including declined claims, as a reported claim. By the way, the homeowner told us that there was no damage to either the building or to their personal property. They were just wondering if their policy would pay for waterproofing to repair this condition to their home so that there would not be damage in the future.
  2. This homeowner reported the claim directly to the insurance company because their agent (in this case a captive agent) directed them to the insurance carrier’s website for claims. Sometimes direct reporting may not be optimal for the best results. As an independent agent, we believe that helping our clients at claim time is a primary duty and responsibility. It gives us an opportunity to explain how the claims process works to our client. It gives the client an opportunity to explain exactly what happened to an advocate rather than a report taker. It also gives us the chance to explain the consequences of the claim and what that claim may do to their ability to purchase insurance in the future or to their cost of insurance.
  3. Here, the homeowner had a policy with a very low deductible. We generally recommend a range of deductible limits to our clients with the express purpose to help them avoid tiny claims which may cause them to be cancelled in the future if they have larger, more substantial claims. Here, if the homeowner had a deductible of $1,000, they may not have wanted to report a claim that would only pay them $200.

By the end of our conversation, the homeowner appreciated our point of view and asked if we were able to obtain a policy for them. We knew that all our insurance carriers would decline this account because they had been non-renewed for claims activity, but we contacted one of our insurance company underwriters, explained the second claim that should never have been a claim, and that carrier agreed to offer a policy for the homeowner.

This new client has expressed to us that they wish they had worked with an agent on a “consultative” basis before they had to learn the hard way that it matters how (and from whom) you purchase your insurance.

Key Insurance Buying Takeaways

  • Work with an agent who is going to ask you a lot of questions and work with you to design an insurance policy that works for you.
  • Expect ongoing service from the person who understands your account and knows your needs for claims, payment issues, new and improved coverage, and alternative competitive quotes for your coverage.
  • The convenience of websites and toll-free telephone numbers for service is lovely but may not always get you the best advice.
  • Work with an agent that you trust and who will tell you what you need to hear, which may not always be what you want to hear.

We think that being an independent insurance agent puts us in the best position to help you get the most from your insurance program.

Hand holding iPhone with Lyft Logo on screen

Are You Covered By Your Personal Auto Policy for Business Use of Your Vehicle?

Ride Sharing, Pizza Delivery, and More Examples of Using Personal Automobile for Business

Jane uses her Honda Accord a few evenings a week while she drives for Uber.

Jim, Jr. uses his mother’s Ford Escape during the weekends for his pizza delivery job at the local pizzeria.

Sarah uses her Dodge Minivan to deliver packages for an internet-based retail delivery service five days each week until she finds a new management position.

Nick drives his Chevrolet Blazer a few days each week while he does delivers for Door Dash until his music gigs begin again as bars and restaurants reopen.

Each of these are examples of people using their personally owned automobile in a business centered around transportation of people or objects.

While some of these could be called a part of the “new economy”, there are also hosts of old school situations that are still current like driving a carpool, using your vehicle to drive people to nearby airports for pay, home delivery of newspapers, magazines, and other products, or using your own vehicle to run errands for your boss, make sales calls, or for other work-related uses.

Your automobile insurance policy may handle each of these situations differently–and that there is significant variation by specific insurance company and by state in what they may cover and how it may be covered.

Let us break down some of these business exposures and discuss how they are covered by your personal automobile policy.

Using Your Personal Vehicle on Behalf of Your Employer

Many of us will use our own car from time to time to run errands for our employer, visit a client, or attend an out of the office seminar. If you get into an accident while using your personal automobile on behalf of your employer, it is likely that your Personal Automobile Policy will protect you for both injuries you cause to others (third party claims) and damages to your vehicle (first party).

In addition, your Personal Automobile Policy will provide primary coverage to your employer if someone named them in a negligence suit as a responsible party for the damages to others. Your employer may also have coverage under their business insurance to protect them for these claims in excess of your coverage. It is unlikely that you will be a covered party under your employer’s policies for your use of your own automobile.

Since your policy may dilute your limits providing coverage to your employer (you will share your limits), you should consider having an automobile policy with high limits of liability and extending those limits by purchasing a Personal Umbrella Policy.

This conversation would be much different if the business of your employer relates to delivery of goods or services or the transportation of people.

Transportation Network Platform Use or Ride Sharing

If you really want to freak out your children (or in my case grandchildren), ask them if they know where there is a pay phone so you can call a taxi to get a ride home from a restaurant!

Companies like Uber and Lyft have become ingrained in our public consciousness. These are now massive transportation companies who do not own any vehicles–unfathomable to comprehend just a few years ago.

Driving for one of these services can be a substantial income augmenting part-time job with very little up-front costs and total flexibility in your work schedule. However, it is important to understand that using your own automobile for one of these companies is not without risk.

Most Personal Automobile Policies will exclude coverage for all sections of your policy while you are driving on behalf of a ridesharing service. Many carriers have adopted special “Transportation Network Platform” exclusions to restrict your coverage under your policy from the time you log on to the network to the time you log off the network.

It is likely that the service provides you with some level of coverage while you are on the platform, but perhaps not nearly as much coverage as you have under your own policy.

A typical scenario is that while you are logged into the system but do not have a client, you receive a low level of liability coverage from the service. We have seen coverage as low as $50,000 for Bodily Injury per person/$100,000 Bodily injury per accident/$50,000 Property Damage for this phase of operations.

Once you pick up a client, the coverage may increase to a larger limit–we have seen this as high as $1,000,000 per occurrence. Once you drop off the client and are again in between rides, you would revert to the lower limit of liability.

The insurance typically provided by the ride sharing service is only for Liability to others. This does not include coverage for damages to your car or injuries sustained by you while in the car, while your Personal Automobile Policy likely excludes all these coverages.

While Uber and Lyft may be the best known of the ride share companies, there are many others and they may include the transportation of food or other items instead of people. The exclusions in your Personal Automobile Policy include all such transportation network platform services, regardless of what you are transporting.

To fill in the gaps created by driving for a ride sharing operation, it is necessary for you to purchase a special Ride Share Coverage Endorsement from your Personal Automobile insurance company. Not all carriers offer this coverage, and it is not available in all States.

If your carrier does not offer it, it may be possible to purchase standalone Ride Share coverage. If neither of these options are available, you may need to purchase a Business Automobile Policy for the vehicle that is being used in a ride sharing business.

Newspapers, Pizza, and Other Deliveries

There are jobs that may include delivery services that do not use a transportation network platform. Delivering newspapers, pizza, or other take away food, products or services are the most common jobs that we see where folks routinely use their personally owned vehicle for delivery services for an employer.

The coverage for these situations is much less well defined. Most policies contain an exclusion that states, we do not cover the insured’s liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. The policy gives no further definition of the meaning of public or livery conveyance.

Livery generally refers to the transportation of goods or people. Clearly using your vehicle for a taxi service, limousine, or school bus would not be covered by your Personal Automobile Policy.

Occasional deliveries or things like take out food are less clearly contained in the generally accepted definition of these terms and would be open to interpretation by your insurance carrier and ultimately the courts.

We are not big fans of depending on court rulings and lawsuits to get coverage from your insurance carrier. Most insurance underwriters and claims adjusters will tell you that none of these situations are covered by your policy and all are considered public or livery conveyance.

A glance at the results of court cases on this issue are not as clear, with courts in many jurisdictions granting coverage for newspaper delivery or pizza delivery under the Personal Automobile Policy (keep in mind that this would only apply if the driver were not engaged by a transportation network platform).

Our recommendation is that you treat any delivery use of your vehicle as being excluded from your policy and purchase Ride Share coverage as mentioned above.

What Should You Do About Your Auto Policy?

  • Call your insurance agent if you have questions on specific situations that you may have with using your personally owned vehicle for business use.
  • If deliver services are a part of a job, ask your employer what insurance coverage the company provides to you for injuries to others, damage to your vehicle, and injuries that you incur while operating the vehicle.
  • Be very careful with any job where you are paid as an Independent Contractor.

Please contact us if you have questions regarding your personal automobile insurance.

three hackers around a computer wearing anonymous / guy fawkes masks

Why Businesses Should Consider Cyber Liability Insurance

Our lives are increasingly digital. A year ago, who even knew what a “Zoom” was and now it may be the single largest gathering location. More and more of us are working from home, or at least, not in a traditional setting with a greater reliance on computers and devices than ever before. We do not know what long-range effects any of this will have on society, but one thing that we know is that we must deal with a whole new range of security and safety issues.

What is Cyber Liability?

In the insurance field we call this new area of concern, Cyber Liability. A Cyber Liability insurance policy can provide a wide range of coverage (and often services) to help you avoid some of the more common cyber security issues. This is an issue for businesses and individuals. These policies have not yet been standardized, so each insurance carrier develops their own policy with different coverage, terms, and conditions–there can be tremendous differences in these policies. This is one reason you may want to work with an independent insurance agent who has many options to help you develop a coverage plan that meets your specific needs and concerns.

First-Party Cyber Liability Benefits

Most Cyber Liability insurance policies include what we call first-party benefits and third-party benefits. A first party benefit is insurance that you purchase that provides coverage for your own property. Some first party features you may need in a Cyber policy include:

  • Data Restoration–this is an insurance benefit that you use to recreate lost data because of a breach or extortion threat.
  • Loss of Income and Extra Expense provides funds to help you recover your lost income or extra expenses due to a targeted or accidental cyber attack.
  • Cyber Extortion is a common cyber security concern, especially for small businesses.
  • Notification Costs–provides funding for your responsibilities under various State and Federal laws to notify those affected by a breach.
  • Crisis Management provides funds and/or services to help you navigate these waters and mitigate the long-term damage to your business.

Third-Party Cyber Liability Claims

When someone else sues you because of a cyber attack or data breach, that is considered a third-party claim and these policies provide coverage for these suits and allegations as they are not covered under your General Liability policy (which is typically limited to bodily injury and property damage). Examples of third-party situations may include:

  • Network Security and Privacy liability suits.
  • Electronic Media Liability–may be a situation where you inadvertently cause libel or slander of another party.
  • Regulatory Proceedings–you may be held responsible for damages under State or Federal statutes and regulations.

Just about every business today maintains or collects some level of personal information in a digital format, leaving them vulnerable to cyber attack, data breach, and regulation. With more of our employees possibly connecting to our important data through less secured networks and connections, we are perhaps less secure than we were before the pandemic.

Get Cyber Liability Insurance for Your Business Today

If you have questions about your cyber security and would like a quote on cyber liability insurance, contact us today.

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Health Insurance Open Enrollment: Group Medical Plans

Did you know that open enrollment for group medical insurance plans may help you improve your health insurance coverage?

There is a lot of discussion nationally about health insurance open enrollment these days.  The one thing that we can all agree on is that it seems to get more expensive each year to provide quality health insurance to our families and employees.

Factors that Impact Group Medical Plans

The best benefits/pricing combination for health insurance is often found in group policies.  These are employer-sponsored plans that provide benefits to eligible employees.

In New Jersey, there are several important provisions in qualifying for a small group plan (under 50 full-time equivalent employees).

  • The employer must contribute to the cost of the plan for each employee. The minimum contribution is 10%.
  • 75% of eligible employees must participate in the plan or be covered by another plan (such as one from their spouse’s employer, or under a parent’s policy).  So, if you have 10 employees (and the owner does not count), you must have at least 8 of those employees enroll in the plan or provide a waiver that shows that they have coverage through a spouse or parent group policy.
  • To qualify as a “group” you must have at least one eligible employee and the business owner does not count in that calculation nor does the business owner’s spouse.

However, and this is an important exception, January 1st is open enrollment for small group plans.  This may be the only time of year small employers are not subject to the participation/contribution requirements.

Client Example

For example, we have a client who has over 20 full-time employees.

Most of those employees are laborers who make close to minimum wage, and many of them are covered by low cost or subsidized health insurance or not covered at all.

It is difficult for these employees to afford any premium contribution.  The employer certainly cannot afford to pay most or all the premium, so for years, they had no group plan.

We were able to set them up on a group plan with an effective date of January 1st, with only one employee enrolled in the plan.  This employee happened to be a relative of the owner who works in the company in a management capacity.

Since the participation requirement is waived, this group is eligible, and the owner can participate as well.

This open enrollment exception allowed the company to provide excellent health insurance to the owner and his family and a trusted, high-level employee, while all the other employees chose to opt-out of the coverage.

This could not be done at any other time of the year.

We're Here to Help

If you are a business owner without an employer-sponsored group benefits plan, contact us to see if a January 1st date opens opportunities for you to access better, and less expensive health insurance.

Please note, these plans must be submitted to the carrier between November 15 and December 15.

We can help you with a full range of retirement and employee benefit plans including qualified and non-qualified retirement plans, group medical, group dental, group life, group disability, voluntary benefits, payroll, human resource consulting and outsourcing and more.