Yes, and a clean track record is often the reason many business owners get caught off guard. Insurance exists for the year that’s different from every other year, not the years that went fine. In New York, some coverage is also required by law the moment you hire your first employee, whether or not you’ve ever had a claim.
Common Questions About Insuring a Business With No Claims History
Does having no claims mean my business doesn’t need insurance? No. A long claim-free stretch tells you what’s already happened, not what’s coming. Most businesses go years without an incident right up until the one event, a lawsuit, a fire, an employee injury, that a policy was built to cover.
Is business insurance required by law in New York? It depends which coverage you mean. Workers’ compensation insurance is legally required for nearly every employer with even one employee, with almost no exceptions. General liability insurance isn’t required by state law, but it’s frequently required by landlords, lenders, and clients as a condition of doing business with you.
What happens if I don’t carry workers’ compensation insurance in New York? The Workers’ Compensation Board can fine an employer for every 10-day period without coverage, and the law also allows for criminal charges, a misdemeanor for smaller employers and a felony for larger ones. These penalties apply whether or not anyone was ever hurt.
What’s the most common way an uninsured small business gets hurt? Not a dramatic catastrophe. Usually it’s something ordinary, a customer injury on the premises, a subcontractor’s mistake, an employee hurt lifting something, that turns into a bill the business owner never budgeted for.
Does a good year mean next year is safer? No. Risk doesn’t decay just because it hasn’t shown up yet. The exposure that existed on day one of your business is still there on day one thousand.
The Trap in “Nothing’s Happened”
A clean claims history feels like proof you’re doing something right. Most of the time it just means you haven’t hit the one event yet that changes everything.
Think about it from the other direction. Every business owner who ends up with an uninsured loss also had a stretch of years with no claims, right up until they didn’t. The absence of a past claim isn’t evidence of low risk. It’s just the normal experience of running a business, most years, nothing goes wrong.
What New York Requires
New York State law requires nearly every employer with at least one employee, including part-time and family employees, to carry workers’ compensation insurance. There’s no exception for a business that’s never had an injury, and no grace period for a new business that just hired its first person.
The penalties for skipping it aren’t small:
- The Workers’ Compensation Board can impose a fine for every 10-day period a business operates without required coverage.
- Failing to secure coverage for five or fewer employees is a misdemeanor.
- Failing to secure coverage for more than five employees is a felony.
These penalties apply under New York Workers’ Compensation Law Section 52, and they’re enforced whether or not an employee was ever injured. The law doesn’t wait for something to go wrong.
General liability insurance works differently. New York doesn’t mandate it by statute, but in practice, most business owners end up needing it anyway. Commercial leases usually require it before you can sign. Banks often require it before they’ll finance equipment or a buildout. Clients increasingly require proof of it before they’ll sign a contract with you at all. It becomes a practical requirement even without being a legal one.
The Kind of Loss That Ends a Business
These aren’t hypothetical scare stories. They’re real files, from real Curabba clients, and they show what these claims look like once they’re underway.
A general liability claim for one of our contractor clients involved a bodily injury that resulted in a death. The claim settled at $4,000,000.
Two auto claims for the same commercial client have paid out $1,500,000 combined so far, and the total is still climbing. One of those two claims is still open eight years after the accident that caused it.
None of these started as the kind of loss anyone plans for. A job site accident. A vehicle on the road doing what vehicles on the road do. What connects them is how long they stayed open, years, generating cost the whole time. A business with no coverage doesn’t get to negotiate any of that down. It just has to pay it, out of whatever cash and credit the business has on hand, for as long as the claim stays open.
Where an Independent Agent Helps
The honest answer to “do I need this” isn’t the same for every business, and it shouldn’t come from a generic online quote form that doesn’t know your specific risk. A contractor’s exposure looks nothing like a bookkeeper’s. A business with one employee looks nothing like one with fifteen.
Our job is to look at what your business does, day to day, and match coverage to that, not to sell you the biggest policy available or the cheapest one. Sometimes that means telling a business owner they’re already carrying more coverage than they need. Sometimes it means pointing out a gap they didn’t know existed, like a lease requirement they haven’t met yet, or a subcontractor whose own coverage wouldn’t protect your business if something went wrong.
What This Means If You’ve Never Filed a Claim
A clean history is a good thing. It’s just not a reason to skip coverage, especially when part of what you need is required by law the moment you have a single employee, and the rest protects you from a single bad afternoon undoing years of steady work.
If it’s been a while since anyone looked at what your business carries, that’s worth an hour of your time before it becomes something you wish you’d checked sooner.
More Straight Talk
This article is part of our ongoing series on the honest questions people have about insurance. Start with Is Insurance Really Worth It?, or check back soon for more.
We’ve been doing business this way in the Hudson Valley for more than 80 years. If you want to talk to a real person about your business coverage, call us. No phone tree, no pressure, just a straight answer.