You formed an LLC. Now what about insurance?
The LLC paperwork is done, the bank account is open, and someone has already asked for a certificate of insurance. Here's what the LLC actually protects, what New York requires and when, what your first lease or contract will demand, and a first-year program that doesn't overbuy.
An LLC separates your personal assets from the business's debts; it does not stop the business itself from being sued, and courts can reach through a thinly run LLC. New York requires nothing of a one-member LLC with no employees, but the day you hire anyone, workers' compensation is mandatory and disability plus Paid Family Leave follow after 30 days. General liability isn't required by statute, but almost every lease, client contract and general contractor requires it, along with a certificate of insurance. A sensible first-year program for most solo LLCs is a business owners policy (liability plus property), the employment coverages the moment you hire, and professional liability if your advice or work can cost a client money.
What the LLC does and doesn't do
Forming an LLC draws a line between the business's obligations and your personal assets. It's a good line, and worth keeping bright: a separate bank account, contracts signed in the LLC's name, no personal spending from the business account. What it doesn't do is make the business itself hard to sue, and it doesn't pay for anything. A customer who slips in your shop sues the LLC; the LLC's assets, the ones you just put in, are what a judgment reaches; and the legal defense comes out of them too. Insurance pays the defense and the judgment. The LLC keeps what's left from touching your house.
What New York requires, and when
| Stage | Required by New York | Notes |
|---|---|---|
| One-member LLC, no employees | Nothing | Members aren't employees for workers' comp; you may elect to cover yourself. GCs and some licences want a CE-200 exemption certificate. |
| First employee, day one | Workers' compensation | Part-time, seasonal, family and day labor count. Penalties up to $2,000 per 10 days without it, plus the claim. |
| Employee on 30 days in a year | DBL + Paid Family Leave | Obligation starts four weeks after the 30th day; one small policy, separate from workers' comp. |
| Business-owned vehicle | Auto liability at NY minimums | 25/50/10 and $50,000 no-fault; far too low for a business, and personal policies exclude most business use. |
| Licensed trade or premises | Sometimes liability | Salons/spas, day-care centers and some contractor licences carry insurance requirements of their own. |
What your lease, clients and GC will require
This is where "do I need insurance" gets answered for you. A commercial lease will require general liability, usually $1 million/$2 million, with the landlord as additional insured, and property coverage for your buildout. A client agreement or general contractor will require the same plus workers' comp and disability certificates (C-105.2 and DB-120.1 in New York, or the CE-200 exemption), often a waiver of subrogation, and for contractors an additional-insured endorsement that covers completed work. A certificate of insurance can only report what the policy actually contains; New York Insurance Law §502 bars certificates that say otherwise. Read the insurance clause before you sign, and send it to me.
A first-year program that doesn't overbuy
- A business owners policy (BOP): general liability and business property in one package, with business income usually included. For most storefront, office and service businesses it's the efficient way to buy the two coverages everyone asks for.
- Workers' comp and DBL/PFL the day you hire, not the day the Board writes.
- Professional liability if a mistake in your advice, design, treatment or records could cost a client money without anything being physically damaged. General liability doesn't cover that.
- Hired and non-owned auto on the liability policy if you or anyone runs errands, deliveries or client visits in a personal car; a commercial auto policy for a vehicle the LLC owns.
- Add as you grow: liquor liability the day you serve alcohol, cyber when you take card payments or hold customer data, an equipment floater when tools travel, an umbrella when contracts start asking for $2 million or more.
The business gap check walks these twelve questions in three minutes and ranks what's missing; bring the result and the lease clause and the first-year quote is a twenty-minute conversation.
This guide describes New York requirements and common contract terms as of 2026 in general terms; it isn't legal advice about your LLC or your contracts. Coverage is determined by the policies actually issued.
- Is workers' compensation coverage required? Partnerships, LLCs and LLPs (NY Workers' Compensation Board) — members are not employees; coverage required once there are employees
- Violations of the Workers' Compensation Law, penalties (NY WCB)
- Disability and Paid Family Leave coverage requirements (NY WCB)
- Workers' compensation requirements for permits, licenses and contracts, CE-200 (NY WCB)
- Insurance Law §502, certificates of insurance (NY Senate)
- Appearance-enhancement business insurance requirements (NY Department of State)
Common questions
Short answers to what people ask before they call.
Doesn't the LLC protect me from lawsuits?
It protects your personal assets from the business's debts and judgments, as long as the LLC is run as a separate entity (its own account, its own contracts, no mixing of money). It doesn't stop a customer from suing the business, and a judgment against the business takes the business's assets, including the equipment and the account you just funded. Insurance is what pays the judgment and the lawyers; the LLC is what keeps it from reaching your house.
I'm the only person in the LLC. Do I need workers' comp?
No. Members of an LLC with no employees are not employees for workers' compensation purposes in New York and the coverage isn't required, though you can elect to cover yourself. The moment you hire anyone, part-time, seasonal, a family member or day labor, it's mandatory from their first day, with penalties from the Workers' Compensation Board that run up to $2,000 per 10 days without it. Some general contractors and licences will still want a CE-200 exemption certificate from a solo LLC.
When do DBL and Paid Family Leave apply?
Once you've had one or more employees on at least 30 days in a calendar year, with the obligation starting four weeks after that 30th day. It's a separate, inexpensive policy from workers' comp; buy it when you hire so the date never matters.
Is general liability required by law?
Not by statute for most businesses. It's required by almost every commercial lease, client agreement and general contractor, usually at $1 million per occurrence and $2 million aggregate with the other party named as additional insured. Some licences do require liability coverage, notably salons and spas ($25,000 per person / $75,000 aggregate from the Department of State) and day-care centers.
What about my personal car and my home office?
A personal auto policy excludes many business uses, and a homeowners policy caps business property at around $2,500 and excludes business liability. If clients come to your home, you drive for the business, or you keep inventory or equipment at home, the first-year program needs to address it: an in-home business endorsement or a BOP, and hired and non-owned auto on the liability policy.
New LLC? Twenty minutes
Tell me what the business does, whether anyone else works in it, and whether a lease or a client contract is in the picture. I'll tell you what New York requires, what the contract requires, and what's optional this year.