Do I need insurance to start a business in New York?

Yes. At minimum, you should consider general liability and professional liability coverage. Workers’ comp and disability are required once you hire your first W-2 employee.

When is workers' compensation required in New York?

Workers’ compensation is required the moment you hire your first employee. The state tracks this through payroll records and imposes penalties for missing coverage.

Can I include myself as the owner in workers’ comp coverage?

Yes, but you are not required to. In New York, business owners are automatically excluded unless they choose to opt in.

How much does cyber liability insurance cost for a small business?

Cyber insurance for startups typically ranges from $70 to $200 per year. It's an affordable way to protect against data loss and digital threats.

What is pay-as-you-go workers’ comp?

Pay-as-you-go workers’ comp ties directly to your payroll provider. It allows you to pay premiums each pay cycle and reduces the risk of audit adjustments.

What Insurance Do You Need to Launch a Business in New York?

Insurance Requirements for New York Startups: What You Need to Launch

Starting a business in New York comes with opportunity and oversight. From legal requirements to client contracts, the right insurance coverage protects your launch from preventable risk.

Foundational Insurance Coverages to Consider

General Liability Insurance

General liability protects against claims of bodily injury, property damage, or personal injury. Most commercial landlords and client contracts require this policy.

Average cost: $400–$800/year
Essential for: Office space, in-person services, vendor relationships

Professional Liability Insurance

Also called errors and omissions insurance, this protects against negligence claims tied to your services. High-trust industries like consulting, recruiting, or creative work should prioritize this.

Average cost: $500–$1,000/year
Essential for: Service providers, agencies, solo consultants

Cyber Liability Insurance

Protects your business from data breaches, phishing attacks, and digital loss. This policy is especially relevant if you handle client data or operate online.

Average cost: $70–$200/year
Essential for: Digital services, client data access, remote teams

Workers’ Comp and Disability: When Do You Need It?

In New York, you’re not required to carry workers’ compensation or disability insurance until you hire your first W-2 employee. As the owner, you’re automatically excluded but can choose to include yourself.

Workers’ Compensation: Required once your first employee starts. Penalties for noncompliance can be steep.
Disability Insurance: Also required with your first W-2 employee. Must be secured before their first day.

If you’re planning to hire, speak to your advisor before sending an offer letter. The state verifies coverage based on payroll records, not intent.

Managing Cost and Compliance

Many carriers offer pay-as-you-go workers’ comp policies tied directly to your payroll provider. This eliminates the need for large down payments and simplifies year-end audits.

Option 1: Report estimated payroll manually
Option 2: Automate via payroll integration

Both keep you compliant but offer different flexibility depending on your growth plans.

Final Thoughts

Insurance doesn’t need to slow your momentum, but missing key policies can. Build a coverage plan aligned to your launch timeline, hiring roadmap, and industry exposures.

At Refine Risk, we guide early-stage founders through each step, from quotes to compliance. If you’re preparing to hire or ready to launch, we can help.

Contact us to get started with tailored coverage.

Want to compare your options?

Click the button below to head to our quotes page where you can enter some basic information to have our team help with your insurance!

Start A Conversation With Us