New Jersey Establishes Liability Insurance Requirements for Business Owners and Landlords

On August 5, Governor Murphy signed into law a new regulation requiring all New Jersey business owners to maintain no less than $500,000 in liability coverage.

Landlords will be required to maintain minimum liability coverage of $300,000 for properties with four or fewer units, while properties with five or more units will be required to carry $500,000 in liability protection.

Compliance begins November 5, 2022 for new policies, and February 5, 2023 for renewals. Within three months of these dates, businesses and landlords must register their compliance with the law on the local community or municipal government website where the business or property is located, with annual re-registration thereafter. The local government is charged with enforcing compliance and may impose penalties for non-compliance from $500 to $5,000.

While the new law will increase costs for those who may have had lower limits, the incremental increase will usually be small, and the additional coverage provided will better protect the business or property owner from lawsuits and potential loss of personal assets.

For questions about insurance registration and compliance, please contact your local municipality. As this law was recently passed, compliance and registration details may not yet have been decided within each municipality.

By Colleen Woods-Esposito