How Much Is Business Insurance in Texas and What You Need to Know

Business insurance in Texas can be a complex and expensive endeavor, but it's a crucial investment for any entrepreneur. The cost of business insurance in Texas varies widely depending on the type of business and industry.

In Texas, the average cost of business insurance is around $1,000 to $2,000 per year. However, this can range from a few hundred dollars to several thousand dollars annually.

As a business owner in Texas, you'll want to consider the various types of insurance that are required by law, such as liability insurance and workers' compensation insurance. These can add up quickly, but they're essential for protecting your business and employees.

Business insurance costs in Texas can vary significantly depending on the type of business you have.

For example, a retail store in Texas may pay around $1,000 to $2,000 per year for general liability insurance, while a construction company may pay upwards of $5,000 to $10,000 per year for workers' compensation insurance.

The size of your business also plays a role in determining your insurance costs. A small business with fewer employees will generally pay less for insurance than a large business with many employees.

Texas has a relatively high rate of workplace injuries, which can drive up workers' compensation insurance costs. According to the Bureau of Labor Statistics, Texas had a higher rate of workplace injuries than the national average in 2020.

The type of business you have also affects your insurance costs. For instance, a business that handles hazardous materials will likely pay more for insurance than a business that doesn't.

Business insurance in Texas comes in various forms to protect your business from different types of risks. Commercial property insurance, for example, helps businesses pay to repair or replace buildings, structures, and contents damaged or destroyed due to fires, storms, or other events outlined in the policy.

There are three main categories of commercial property policies in Texas: Basic form, Broad form, and Special Form. Basic form policies cover common risks such as damage from fire, lightning, windstorm, vehicles, aircraft, or civil commotion. Broad form policies provide basic form coverage plus coverage for additional perils like water damage, structural collapse, and losses caused by ice, sleet, or weight of snow.

Businesses can also purchase Commercial General Liability Insurance, which protects business owners against claims of liability for bodily injury, property damage, and personal and advertising injury. This type of insurance can be broken down into several categories, including premises/operations coverage, products/completed operations coverage, excess liability insurance, and umbrella liability insurance.

Here are some common types of business insurance:

Commercial property insurance is a must-have for businesses, including farms and ranches. It helps pay to repair or replace buildings, structures, and contents damaged or destroyed due to fires, storms, or other events outlined in the policy.

Business owners can buy commercial property insurance if they own, rent, or lease a building. If you rent or lease a building, the building owner's policy probably won't cover the contents of your building. You'll need to buy your policy to insure your on-premises property, including machinery, furniture, and merchandise.

Tenant coverage is usually significantly less than building owner coverage because the policy will only need to cover contents, not the building itself. Businesses operating at multiple locations can be covered under a single policy unless they have different functions and different risk profiles.

There are three main categories of commercial property policies in Texas:

Commercial property policies in Texas generally cover damage from windstorms, except for counties on the Texas coast. If your business is in one of Texas' coastal counties, you'll need a separate windstorm policy.

Some commercial property policies cover damage from floods, but this is usually not included in a standard policy. You may need to buy additional coverage or a separate policy to protect against floods.

Commercial Auto is a must-have for business owners who use vehicles for work. It's essential to be covered for liability, collision, and comprehensive medical payments.

Business owners often use the same vehicle for both business and pleasure, so it's crucial to have the business's name on the policy as the 'principal named insured'. This avoids conflict and potential problems if you need to file a claim.

A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them, and if employees drive their own cars for your business. They'll help you understand the differences between a personal auto policy and a commercial auto policy.

Make sure you have sufficient auto liability coverage, as there's often an exclusion for business-related liability in personal umbrella liability policies.

CGL policies are a type of business insurance that protects owners against claims of liability for bodily injury, property damage, and personal and advertising injury.

CGL policies have various coverages, including premises/operations coverage, products/completed operations coverage, and excess liability insurance. Premises/operations coverage pays for bodily injury or property damage that occurs on your premises or as a result of your business operations, while products/completed operations coverage pays for bodily injury and property damage that occurs away from your business premises and is caused by your products or completed work.

Excess liability insurance pays for covered losses that exceed your CGL policy's dollar limit. Umbrella liability insurance is excess liability insurance coverage above the limits of automobile liability and CGL policies.

Most CGL policies have exclusions, which can vary by insurer, and you should carefully review your policy and any endorsements to know precisely what your policy does and doesn’t cover.

Here's a breakdown of common exclusions in CGL policies:

It's essential to review your CGL policy and any endorsements with your agent if you have any questions about your policy, coverages, or policy limits.

When choosing a business insurance policy, you'll often come across two main types: occurrence policies and claims-made policies.

Occurrence policies cover claims arising from injury or damage occurring while the policy is in force, regardless of when the claim is first made. This means you're protected for incidents that happen during the policy period, even if the claim is made years later.

Claims-made policies, on the other hand, cover claims that arise from injury or damage occurring during the policy period and reported to the insurer during the policy period. If you switch insurers, you'll need to purchase special coverage to prevent coverage gaps.

One key difference between the two is that occurrence policies may be more expensive in later years as the potential for claims increases. Claims-made policies, however, may be less expensive in their early years but can leave you vulnerable to coverage gaps if you switch insurers.

Here's a quick comparison of the two:

General liability insurance has two limits: a per-occurrence limit and an aggregate limit. The per-occurrence limit pays up to a certain amount for claims related to a single incident, while the aggregate limit pays up to a certain amount for all claims during the policy period.

The limits can run from $250,000 to $2 million and more, with most Insureon customers choosing $1 million / $2 million general liability insurance limits. If you can't pay for the deductible in a crisis, your insurance won't activate to cover your liability claim.

A business owner's policy, which includes general liability coverage and commercial property insurance, can cost as little as $57 per month for small business customers. This is often less expensive than buying these policies separately.

Policy limits and deductibles are crucial aspects of your insurance policy. The amount you pay for your policy directly affects the level of coverage you receive.

If you want car insurance that pays for a wide range of damage, you have to pay more for it. The same rule applies to business insurance. If you want a policy that covers more expensive accidents and lawsuits, expect to pay more than you would for basic coverage.

General liability insurance is an occurrence-based policy. It pays for losses that occur during the policy period and has two limits. Per-occurrence limit is the amount the insurer will pay to cover claims related to a single incident, and aggregate limit is the amount the insurer will pay to cover claims during the lifetime of the policy, usually one year.

The limits can run from $250,000 to $2 million and more. Most Insureon customers choose $1 million / $2 million general liability insurance limits.

The deductible is the amount you have to pay out of pocket before your insurance kicks in. This amount can vary, but it's a good idea to make sure it's something you can easily afford. The average deductible that Insureon customers select for general liability insurance is $500.

The right amount of insurance coverage depends on your business needs. You want coverage that'll cover a potential lawsuit, without buying more than you need.

As a freelancer, you'll need to consider getting business liability insurance, no matter what work you do or what sector you're in, because accidents can happen and you could be sued.

Accidents are unpredictable, and even a small mistake can lead to a lawsuit from a client or customer.

You should also be prepared to handle taxes and benefits for yourself, as you won't have an employer to rely on.

This includes setting aside money for taxes and making sure you're taking care of your own benefits, like health insurance.

A Policy is a crucial aspect of business insurance, and understanding its details can help you make informed decisions. General liability insurance, for instance, is an occurrence-based policy that pays for losses that occur during the policy period.

The policy has two limits: the per-occurrence limit and the aggregate limit. The per-occurrence limit is the amount the insurer will pay to cover claims related to a single incident, while the aggregate limit is the total amount the insurer will pay to cover claims during the lifetime of the policy.

These limits can run from $250,000 to $2 million and more, with most Insureon customers choosing $1 million / $2 million general liability insurance limits. It's essential to choose limits that align with your business needs.

The deductible is another critical aspect of a policy. If you can't afford the deductible, your insurance won't activate to cover your liability claim. The average deductible that Insureon customers select for general liability insurance is $500.

Bundling policies can also save you money. A business owner's policy, which includes general liability coverage and commercial property insurance, is a common bundle. The average cost of a BOP is only $57 per month for Insureon's small business customers.

The cost of a policy is influenced by several factors, including your claims history, industry, number of employees, payroll, and coverage needs.