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Business Insurance in Texas

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Looking for Texas business insurance info that won’t make you feel like you need a second job as an insurance agent to understand it all?

Fortunately, we’re not just a popular small business blog; we’re also an online business insurance brokerage platform, meaning we’re in the position to give you an answer to most of your questions regarding business insurance in Texas.

So whether you’re wondering if you need a Texas workers compensation insurance policy or you’re just curious about your state’s insurance requirements, you’ll likely find what you’re looking for right here.

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Business Insurance in Texas: The Basics

Texas General Liability Insurance

Before we dive into Texas general liability insurance requirements, let’s talk about what this specific coverage is and why it matters.

General liability insurance is a type of business policy that typically protects against common risks such as:

  • Third-party accidents
  • Property damage caused by you or your work
  • Bodily injury
  • Reputational harm
  • And more

General liability insurance is an important policy for many Texas small business owners, as it protects against some of the most common — and sometimes costliest — claims filed against small businesses.

For example, reputational harm (which simply means that someone’s reputation was harmed by something you said or did) is the most expensive small business claim, costing an average of $50,000.

The good news is that general liability insurance can help protect you financially against reputational harm claims, so you’d typically only have to pay the cost of your policy deductible - depending on the specifics of the particular claim.

That’s a lot better than potentially $50K!

Let’s take a look at a few other examples of general liability insurance in action:

  • You accidentally knock over and break a client’s laptop while cleaning their home office. Your general liability insurance policy could potentially cover some or all the costs of replacing the computer.

  • A client trips over a hose while you’re busy power-washing their home exterior. If your client is injured, your general liability policy could pay for the medical bills, as well as any resulting legal fees.

  • A client accuses you of slander, even though you’ve never said anything bad about them. Even though you’re 100% innocent, you still have to pay the cost of hiring a lawyer to defend you. Fortunately, your general liability insurance can cover those legal costs.

While Texas general liability insurance isn’t a requirement for most businesses, many contractors in Texas are likely required to carry a general liability policy and a construction bond.

If you’re a contractor and you have more questions about your Texas general liability insurance requirement, read our article on how to get a Texas contractor license.

Texas Professional Liability Insurance

If you’re in the business of providing advisory services to your clients, you may want to consider getting a professional liability insurance policy.

A professional liability insurance policy typically provides financial protection against claims of negligence while performing your work.

For example, if you make an error on a client’s tax return or you provide marketing advice that causes a client to lose a lot of money, your policy could cover some or all the costs of a resulting legal action.

Professional liability insurance comes highly recommended for Texas businesses such as:

  • Accountants
  • Photographers
  • Real estate agencies
  • Marketing services
  • Business consultants
  • Tax preparation specialists
  • And more

Professional liability insurance is usually not required by Texas state laws (except for medical professional liability; more on that here). However, it’s still a good idea to have coverage if you’re in the business of giving advice or providing a service to your clients.

After all, we’re human; mistakes can happen. Professional liability insurance can help ensure that an unintentional error on your part doesn’t cause catastrophic financial losses for your business.

Texas Workers Compensation Insurance

Texas is different from the majority of other states in that most small business owners aren’t usually required to carry a workers compensation policy if they have employees.

However, there are exceptions to this rule, which we’ll explore in the Texas workers compensation section towards the end of this article. Plus, it’s always a good idea to have this coverage if you have employees, since it can help protect you from having to pay out of pocket if an employee gets hurt or sick on the job.

Commercial Auto

If you drive a truck or car for your business (even if it’s just getting to and from work sites), you may be required to have a Texas commercial auto insurance policy. This type of policy is separate from your personal car insurance policy, as it covers your commercial vehicles exclusively.

In other words, typically, if you’re using your car for business and you have an accident, your personal auto insurance won’t cover you.

The rules are likely different depending on the type of vehicle you drive for work. Here’s a quick overview of how Texas approaches commercial auto insurance:

  • If your commercial vehicle carries fewer than 16 people and weighs less than 26,000 pounds (and is driven only in Texas), you are required to have a minimum of $30,000 in bodily injury liability coverage and $25,000 in property damage liability coverage.

  • If you drive a vehicle that hauls more than 26,000 pounds, you may need a special motor carrier insurance policy, as well as owner-operator insurance.

Vehicle accidents are the second-most costly business insurance claims, with the average claim costing $45,000. For that reason, it’s worth looking into Texas commercial auto insurance for your business vehicles.

Other Types of Texas Business Insurance

  • Tools & equipment coverage: Also known as inland marine insurance, this type of Texas business insurance can help cover some or all of the costs associated with replacing lost or stolen tools.

  • Business owner’s policy (“BOP”): This comprehensive coverage combines general liability insurance and business property insurance into a single policy. BOP coverage is typically a good idea if you have a physical storefront, like a retail store or office.

  • Business income insurance: This insurance can cover a business owner’s income if they have to shut down as a result of storm damage or theft.

  • Home-based business insurance: If you have a home office, you may want to purchase this insurance policy, as it covers damages that aren’t otherwise covered by traditional homeowners insurance.

Want to learn more about your Texas business insurance options?

Use our quote comparison tool to get free business insurance quote options from top insurance companies. Compare policies and instantly buy the one that works best for your business, or give our licensed insurance agents a call at 844-654-7272 for one-on-one assistance.

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Texas Workers Compensation: What You Need to Know

Remember that we mentioned Texas is one of the few states that doesn’t usually require you to carry a workers compensation insurance policy?

Well, there’s a notable exception to that rule: You’re required to have Texas workers compensation insurance if you’re working with or have a contract with a government entity.

But that’s not because it’s state law; it’s a federal government requirement.

Even if you’re not working with a government entity, it’s important to get Texas workers compensation insurance if you have employees, as it may offer you significant protection against lawsuits and claims from employees who may get injured or sick while working for you.

Workers compensation insurance may even be able to pay some of that employee’s lost income, as well as potentially provide some financial benefits for the family if the employee dies as a result of their injury or illness.

Without workers compensation insurance, you may be financially on the hook for those expenses. That’s why it’s a good idea to look into getting Texas workers compensation insurance, as well as requiring any subcontractors to carry their own policies.

You can read more about Texas workers compensation insurance requirements here.

How Much Does Business Insurance in Texas Cost?

Unfortunately, it’s tough to give a single concise answer to how much Texas business insurance costs.

Business insurance can encompass many different types of coverages, all of which may influence the final (and total) cost of a Texas business insurance policy.

But we can help you get a better idea of what to expect if you’re shopping for an essential policy like general liability insurance. For example, at Simply Business, you could see general liability insurance quotes for as low as $25.95/month.*

If your budget is tight, we recommend comparing quote options with our online tool. It’s a great way to get several different quotes from business insurance companies, plus you have clear visibility into how much a policy may cost.

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How Do I Get Texas Business Insurance?

Feeling intimidated by the process of shopping for Texas business insurance?

Don’t be! Insurance has become much more accessible in recent years, meaning you’re empowered to find the policy that works best for your type of business.

Take a look at a few quick tips on how to find the right business insurance policy — including Texas workers compensation insurance — for you:

  • Identify your business’s biggest risks, as this info can be essential for knowing what type of insurance policy you may need.

  • Try talking to other business owners in your area. Bonus points if they have a similar business to your own.

  • Know what you’re legally obligated to have. This article can give you a good head start, but it’s up to you to research your industry’s specific insurance obligations.

  • Shop around, as it’s the best way to get a good deal on a great business insurance policy.

  • Ask for help if you need it. For example, if you’re shopping for insurance through our online platform, our helpful insurance agents are just a phone call away.

  • Decide if an annual or monthly premium works better for your business’s budget.

  • Download your Certificate of Insurance (COI) as soon as you buy your business insurance policy, as it’s one way to show your business is insured.

For more helpful advice, check out our easy guide on how to get business insurance.

Check Texas Business Insurance Off Your List!

Whether you’re just starting your business or you’re curious about the Lone Star State’s insurance requirements, we hope this article helped point you in the right direction for which insurance policies you may be required to have.

Come back to Simply U for more tips on starting a business or growing a successful business.

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*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.

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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business, Inc. is a licensed insurance producer in all U.S. States and the District of Columbia. Simply Business has its registered office at Simply Business, 1 Beacon Street, 15th Floor, Boston, MA, 02108. In the state of California, we operate under the name Simply Business Insurance Agency, Inc., License #0M20593. In the state of New York we operate under the name Simply Business Insurance Agency. In the state of Texas we operate under the name, U.S. Simply Business, Inc. For more information, please refer to our Privacy Policy and Terms & Conditions.