New Jersey small business insurance requirements: workers' compensation, auto minimums and contractor registration

New Jersey: what the state requires of a small business

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In New Jersey, every employer not covered by a federal program must carry workers' compensation or be approved to self-insure, from the first employee; vehicles must carry at least 25/50/25 liability since January 1, 2023, with personal injury protection on standard personal policies; and home improvement contractors must register with the Division of Consumer Affairs and carry commercial general liability of at least $500,000 per occurrence.

Reviewed by CoverMatch licensed agents, Licensed property & casualty agents · Reviewed Oct 11, 2026 Updated Oct 30, 2026

New Jersey rules with sources
Topic	The rule in New Jersey	Source
Workers' compensation	Every employer, other than those covered by federal programs, must insure its workers' compensation obligations with a licensed carrier or qualify as a self-insurer. The requirement applies from the first employee; sole proprietors and partners without employees are not required to cover themselves.	N.J.S.A. 34:15-71 and -72; NJ Department of Labor — Employer coverage
Penalty for being uninsured	Failure to carry coverage is a disorderly persons offence, with penalties assessed per day of non-compliance, and the uninsured employer is personally liable for benefits.	N.J.S.A. 34:15-79
Auto liability minimums	Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000 for policies issued or renewed on or after January 1, 2023, rising to $35,000 / $70,000 / $25,000 on January 1, 2026.	N.J.S.A. 39:6B-1 as amended by P.L. 2022, c. 90
Home improvement contractors	Home improvement contractors must register annually with the Division of Consumer Affairs and maintain commercial general liability insurance of at least $500,000 per occurrence, with proof filed at registration.	N.J.A.C. 13:45A-17.12; Contractors' Registration Act, N.J.S.A. 56:8-136 et seq.
Temporary disability insurance	New Jersey employers also participate in the state's Temporary Disability and Family Leave Insurance programs through payroll contributions, which are separate from workers' compensation.	NJ Department of Labor — Temporary Disability Insurance

Topic

The rule in New Jersey

Source

Workers' compensation

Every employer, other than those covered by federal programs, must insure its workers' compensation obligations with a licensed carrier or qualify as a self-insurer. The requirement applies from the first employee; sole proprietors and partners without employees are not required to cover themselves.

N.J.S.A. 34:15-71 and -72; NJ Department of Labor — Employer coverage

Penalty for being uninsured

Failure to carry coverage is a disorderly persons offence, with penalties assessed per day of non-compliance, and the uninsured employer is personally liable for benefits.

N.J.S.A. 34:15-79

Auto liability minimums

Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000 for policies issued or renewed on or after January 1, 2023, rising to $35,000 / $70,000 / $25,000 on January 1, 2026.

N.J.S.A. 39:6B-1 as amended by P.L. 2022, c. 90

Home improvement contractors

Home improvement contractors must register annually with the Division of Consumer Affairs and maintain commercial general liability insurance of at least $500,000 per occurrence, with proof filed at registration.

N.J.A.C. 13:45A-17.12; Contractors' Registration Act, N.J.S.A. 56:8-136 et seq.

Temporary disability insurance

New Jersey employers also participate in the state's Temporary Disability and Family Leave Insurance programs through payroll contributions, which are separate from workers' compensation.

NJ Department of Labor — Temporary Disability Insurance

Workers' compensation in New Jersey

New Jersey requires coverage from the first employee and enforces it through the Division of Workers' Compensation and the courts. Corporate officers are counted as employees and covered unless the corporation has no other employees and elects otherwise. Sole proprietors and partners may cover themselves voluntarily. Uninsured employers face per-day penalties and personal liability for benefits.

Auto liability in New Jersey

The 2022 law raised the minimum liability limits in two steps: 25/50/25 from January 1, 2023 and 35/70/25 from January 1, 2026. Business vehicles in New Jersey carry higher limits in practice because leases, platforms and clients require a combined single limit, often $1M.

Contractors in New Jersey

Home improvement contractors register with the Division of Consumer Affairs and must show commercial general liability of at least $500,000 per occurrence. The registration number goes on contracts, vehicles and advertising. Electrical, plumbing and HVACR work is licensed separately with its own requirements.

How CoverMatch uses these rules

A New Jersey business in the wallet is checked against these rules: workers' compensation once employees are reported, auto limits on scheduled vehicles, and the $500,000 general liability floor for home improvement classes. Each rule links to its source, and a licensed agent reviews this page before it publishes and whenever the rules change.

Sources

Questions people actually ask

Does a New Jersey LLC with only its members need workers' compensation?

An LLC with no employees other than its members is generally not required to carry it, but members can elect coverage, and general contractors and clients often require a policy regardless.

Do New Jersey auto minimums apply to commercial vehicles?

The financial responsibility minimums apply to registered vehicles generally; commercial vehicles for hire and heavier vehicles carry higher federal or state requirements, and most business policies are written well above the minimum.

Is my home improvement registration the same as a license?

New Jersey registers home improvement contractors rather than licensing them, except for trades such as electrical and plumbing that have their own licensing boards with their own insurance rules.

By business type in New Jersey