Accidents happen, and personal liability and/or business liability insurance is critical to ensure that victims are compensated for injuries or damages, and that a business or property owner isn’t forced to pay out-of-pocket or face a lawsuit when an incident occurs. The policy is meant to encourage business and property owners to be proactive instead of reactive. Additionally, the law puts pressure on local governments to hold business and property owners accountable with the auditing of their annual collection(s) of certificate of liability insurance certificates.
Who is required for (and exempt from) having liability insurance?
A recent, but largely unknown New Jersey law S1368 requires all business owners and owners of rental unit(s) to have liability insurance with $500,000 as the minimum coverage requirement and to provide their local governments with certificates of liability insurance. The only exception is for, “the owner of a multifamily home which is four or fewer units, one of which is owner-occupied…” which only has to have $300,000 worth of coverage. Despite these minimums being oddly low, a lot of the public doesn’t even know if they have coverage for losses stemming from rentals, let-alone whether or not hey even have these minimum limits!
What if I do not live in New Jersey? There are similar laws in other States, with others getting ready to be Live. So, be prepared:
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Educate yourself as a business owner and property owner of your coverage(s) and how to produce proof of, quickly.
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Collect certificates of liability insurance from your tenants; just as you have to show insurance for a bank or loan on a property, so should the tenants of your property(ies).
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Enforcement of law S1368: a local government can issue fines between $500 and $5,000 dollars to businesses and property owners that don’t acquire the required insurance and/or fail to submit their certificate of liability insurance. If your locality chooses not to pursue the enforcement of this policy, then the state Division of Local Government Services will do so to businesses within your jurisdiction.
Can your government collect fees for certificate of liability insurance form submissions?
Since the form collection requirement adds an additional workload to your clerk’s department officials, the state law allows local governments to, “establish a reasonable administrative fee for the certificate of [liability insurance] registration.”