Business Insurance in Texas
The old cliche that everything's bigger in Texas is correct in the case of small businesses — over 99.8% of the over 3 million businesses in the state are small ones employing 4.9 million people. If you're one of those small business owners, you likely chose the state due to its friendliness toward commerce, low taxes, a top-notch workforce, and common-sense regulations that go just far enough. What may be confusing, however, is knowing how much business insurance you need and what kind. Let's explore what types of insurance requirements Texas has for business owners and how you can best protect your company when things go wrong.
What Insurance Is Required in Texas?
The relaxed regulatory environment in Texas extends to its insurance requirements for businesses as well. And though companies that contract with government entities require workers' compensation insurance, most small businesses do not. This means that the only true insurance policies required of small business owners in Texas is commercial auto insurance for commercial vehicles they or their workers drive on the job.
Commercial Auto Insurance
Commercial auto insurance in Texas has the same requirements as consumer auto insurance in the state. This means you must have the minimum amount of coverage, whether you're driving a personal or company vehicle. The state's insurance requirements for your coverage of commercial vehicles must include:
- $30,000 in bodily injury or death liability per person
- $60,000 in bodily injury or death liability to more than one person
- $25,000 of insurance coverage for property damage liability per accident
Types of Texas Business Insurance Offered
Though commercial auto insurance is the only required business insurance coverage in Texas, some other business insurance policies are often beneficial, depending on what your company does.
Texas General Liability Insurance Coverage
Lawsuits have the potential to cost your business lots of money, which may even lead to business interruption or closure. For that reason alone, Texas business owners should consider general liability insurance policies to protect their business operations. This type of liability coverage pays out when customers sue for personal injuries incurred on your premises, damage done to customers’ property while on your property, and advertising injury. Aside from preventing business operations from faltering due to monetary loss, these types of business insurances may also make it easier to qualify for leases and contracts due to the protection they provide.
Business Property Insurance
Whether your company's business operations are open to the public or not, business property insurance makes sense because it protects you when fires, water damage, and flooding occur. Many mortgage companies and landlords renting commercial spaces also require this coverage to protect themselves in case something goes awry. Owners with a business location open to the public benefit from business property insurance since it covers theft of business property, including inventory, tools, and equipment, for added peace of mind when you lock up your doors and go home.
Workers' Compensation Insurance
Though you're not required to carry workers' compensation insurance in the state of Texas, it can protect company assets against business interruption when employees get hurt on the job and file injury claims. Some of the things typically covered by workers' compensation insurance include on-the-job injuries, slip-and-fall accidents, and occupation-related illnesses.
Business Owner's Policy
Put simply, a business owner's policy combines general liability insurance with commercial property insurance. These types of insurance often reduce costs from what each policy would cost on its own, making them a popular choice for frugal small business owners. Aside from protecting business property and assets during lawsuits, this business coverage option typically also covers legal costs should you get sued by a customer or client.
Cyber Liability Insurance
Also known as cyber security insurance, cyber liability insurance comes into play when you require protection against costs related to data breaches and malicious software attacks. Businesses that rely on internet commerce are typically more vulnerable to hacks and attacks, with business interruption being inevitable when company computers get infected with ransomware and don't have proper backups. In these instances, cyber liability insurance covers the costs related to shutdown business operations and costs associated with data breaches and ransomware payments. Additionally, this business insurance coverage protects against legal costs, settlements, and court-ordered judgment.
Commercial Flood Insurance
Some areas are more prone to flooding than others, and that's especially true in flatter parts of Texas that see heavy rain during certain times. For that reason, your company may need commercial flood insurance that covers your business location when inventory and property damage occur. Some things covered by these business insurance policies include:
- Permanently installed carpet and fixtures
- Electric and plumbing systems
- Heating and cooling system components
- Appliances and solar equipment
- Structural elements such as windows and walls
Employment Practices Liability Insurance
Discrimination lawsuits are always a risk when you hire people to work for you, and employment practices liability insurance helps you mitigate those risks. These policies provide coverage when you get sued by existing employees, job applicants, and people you previously employed. Other worker allegations these types of business insurance policies handle include:
- Wrongful termination
- Workplace harassment
Errors and Omissions Insurance
Usually purchased from an insurance company by those who provide a professional service, errors and omissions insurance covers instances where clients file lawsuits due to late, inaccurate, or undelivered work. This type of business coverage is also called professional liability insurance, and it helps prevent business interruption when you're accused of negligence by paying legal costs for your defense up to your policy limit.
How Much Does Business Liability Insurance in Texas Cost?
The cost of business liability insurance in Texas varies due to numerous factors. For instance, if you’ve filed numerous claims on previous policies, your insurance company may quote you a higher premium due to the perceived risks entailed with covering your business. Having a business location in a high-crime area may also mean higher premiums, as might the length of your business history. Other factors that go into determining your insurance carriers’ business liability insurance quote include:
- Deductibles: The lower the deductible, the higher your insurance policy premium.
- Annual sales: Smaller businesses usually pay smaller premiums than larger ones.
- Employees: More employees mean higher costs for your Texas business insurance.
- Industry: Some industries have higher risks, and higher risks mean higher premiums.
- Bundling: Combining different types of business insurance may lower your premiums.
Another major factor in determining your business insurance policy costs is the insurance company you choose. Quotes from different insurance carriers may vary considerably, so be sure to shop around and speak to an insurance agent rather than relying solely on online quotes.
Get a Free Quote for Texas Small Business Insurance
Take the guesswork out of choosing your Texas small business insurance by using Tivly to help you get the right business insurance coverages at an affordable price. The process is fast and easy! Complete the form at the top of the page and someone will reach out to you. Or, give us a call at 877-907-5267.