When purchasing small business insurance in Texas, you need to determine your coverage based on your industry and business size. Common types of small business insurance include general liability insurance, professional liability insurance, and workers' compensation insurance.
Texas General Liability Insurance
General liability insurance covers property damage to your business and bodily injury to others. This also applies to claims such as libel, defamation, and copyright infringement. General liability insurance pays for litigation costs, including attorney fees, judgments, and settlements.
texas professional liability insurance
Professional liability insurance protects a company from claims for mistakes made in professional services, even if the claim has no merit. Pay court costs, settlements, and judgment costs. For example, if a client claims that advice from your consulting business caused financial harm, professional liability insurance will cover the legal costs.
Professional liability insurance is also known as errors and omissions insurance.
Texas Workers' Compensation Insurance
Texas workers' compensation insurance pays for lost wages, medical bills, and other expenses for an employee if he or she suffers a job-related injury or fall. Many states require businesses to carry workers' compensation insurance, but Texas does not.
Other types of Texas business insurance
You may need to add other types of small business insurance to cover the risks your industry faces. For example, let's say you want to cover business assets such as buildings, inventory, and office equipment.
A good place to start is with your business owner policy (BOP). BOP combines general liability insurance with commercial property and business interruption insurance. Purchasing BOP is generally cheaper than purchasing each coverage separately. The contents are as follows.
- Commercial real estate insurance: This covers your small business's physical assets against issues such as theft, severe weather, and fire damage. Commercial property insurance covers office furniture, business records, inventory, supplies, and more.
- business interruption insurance: If your business is unable to operate due to a covered problem (such as a fire), business interruption insurance will cover the loss of income.
Additional coverage types can be added to the BOP as needed. Here are some more types of coverage to consider.
- Builder's Risk Insurance. This provides property coverage for structures and buildings under construction. Builder's risk insurance is also known as “construction course insurance.”
- Commercial auto insurance: If you use a car for work, you must have commercial auto insurance. Personal auto insurance does not cover work-related accidents.
- Commercial Umbrella Insurance: This begins when the general liability limitations are exhausted. For example, if your general liability limit is $500,000 and you are sued for $750,000, his $250,000 shortfall will be covered by your commercial umbrella policy.
- Cyber liability insurance: This includes cyberattacks and data breaches. Cyber liability insurance pays for things like data recovery, investigative services, and litigation costs.
- Directors and Officers (D&O) Insurance: This liability insurance covers decisions made by a company's directors, officers, or board members. If someone files a lawsuit against your business, directors and officers insurance will cover the legal costs.
- Inland Marine Insurance. This applies to materials and products transported over land by train or truck. Inland marine insurance covers stolen, lost, or damaged property.
- Medical malpractice insurance: This covers insurance claims that result in patient injury or death, including medication errors. Professionals who may need malpractice insurance include acupuncturists, counselors, dentists, nurses, optometrists, physicians, and therapists.
- Product liability insurance. If one of your products causes damage to someone or someone else's property, product liability insurance covers the costs associated with lawsuits and claims.
- Technical errors and omissions insurance: This includes claims made by customers against technology companies. Small businesses that need technology error and omission insurance include computer consultants, IT contractors, software developers, and website developers.
Cost of Business Insurance in Texas
The average cost of general liability insurance in Texas is $42 per monthAccording to Insureon. Workers' compensation in Texas costs an average of $31 per month, and professional liability insurance costs an average of $59 per month.
The cost of small business insurance depends on several factors, including:
- Number of employees.
- The type of coverage you selected.
- Insurance policy limits and deductibles.
- your industry.