What Insurance Do You Actually Need to Run a Business in Texas?
Confused about what insurance is legally required to operate a business in Texas? You’re not alone. This straightforward guide cuts through the noise and gives you a clear breakdown of the essential policies your business needs to stay compliant with state laws and protected from common risks. From workers’ compensation to general liability, we’ll show you exactly what you need—and what you don’t—so you can focus on growing your business with confidence.
Why Business Insurance in Texas Isn't Optional (Even If You're Just Starting Out)
Let’s clear something up: just because Texas doesn’t require certain insurance policies doesn’t mean you can afford to go without them.
You might be a brand-new business owner, a one-person operation, or working out of your garage—but the risks are real. One accident, one lawsuit, or even one unhappy client can be enough to derail everything you’ve worked for.
In fact, we’ve seen it firsthand: one of our clients, an HVAC contractor in Fort Worth, lost out on a $30,000 commercial job because he didn’t have the right certificate of insurance. The job went to his competitor, who was covered.
Here’s the bottom line:
You may not legally have to carry every type of insurance, but if you don’t, the cost could be everything you’ve built.
Not sure if your current coverage is enough?
Request a Free Policy Review from a Texas-based ExpertThe 3 Types of Insurance Every Texas Business Owner Should Consider First
Whether you’re a startup or a growing operation, there are three foundational policies you should look into right away.
General Liability Insurance
This is the bread and butter of business coverage. It protects you if someone sues for:
- Third-party bodily injury (like a customer slipping in your office)
- Property damage (you accidentally damage a client’s property)
- Legal defense costs
Many commercial leases and client contracts require you to carry general liability. It’s not just protection—it’s often a ticket to doing business.
Commercial Property Insurance
Fire, theft, flood, or storm—your business assets are vulnerable.
This policy protects your:
- Buildings
- Tools and equipment
- Inventory and supplies
Important note: If you run your business from home, your homeowners policy likely won’t cover your business assets. You need a separate policy.
Business Owner’s Policy (BOP)
Think of this as a bundle deal — general liability + property insurance in one, often at a lower cost.
A BOP is ideal for:
- Retail stores
- Office-based businesses
- Small service providers
If you qualify, this policy can save you hundreds while giving you solid foundational protection.
The “You’ll Regret Skipping These” Insurance Policies
Some policies aren’t legally required in Texas—but they are legally important. Here’s what we mean:
Commercial Auto Insurance
Got a company truck? Making deliveries? Driving to job sites?
Texas law requires you to have commercial auto coverage if the vehicle is used for business purposes.
And no—your personal auto policy doesn’t cover you if you get into an accident while working.
Workers’ Compensation
Texas is one of the few states that doesn’t require workers’ comp—but skipping it can backfire badly.
Even if you only have one employee, if they get injured on the job, you could be:
- Sued for damages
- Stuck with medical bills and lost wages
- Forced into bankruptcy if you don’t have the coverage
Professional Liability (E&O Insurance)
This is for anyone who gives advice, provides services, or creates plans or designs. If a client says you caused them financial harm—even unintentionally—this covers you.
Think:
- Consultants
- Contractors
- Tech service providers
- Accountants and marketers
Don’t wait for a claim to find out what you’re missing.
Industry-Specific Coverage You Might Need (That No One Tells You About)
Every industry has unique risks. The worst time to discover your gaps is after a claim.
| Industry | Must-Have Coverage | Why It Matters |
|---|---|---|
| Construction & Trades | Contractor Liability, Tools & Equipment | High-risk sites, tool theft is common |
| Restaurants & Food | Spoilage, Liquor Liability | One blackout = thousands lost in product |
| Childcare & Daycares | Abuse & Molestation, Accident Policy | Essential for legal protection and parent trust |
| Retail & E-Commerce | Cyber Insurance | Data breaches and card theft = huge liability |
| Freelancers & Creatives | E&O, Cyber | Clients may sue over advice, designs, or delays |
If you’re not sure what your industry demands, don’t guess—we’ll walk you through it.
How to Know If You’re Properly Protected (Without Wasting Money)
Run through this quick checklist:
- Do you serve customers in person?
- Do you use a vehicle for work?
- Do you store or manage client data?
- Do you have employees or subcontractors?
- Do your contracts require specific coverage?
- Could one lawsuit or accident wipe you out?
If you answered yes to any of the above, it’s time to talk to someone who can help you build a custom-fit policy—not just a one-size-fits-all package.
Want to find out exactly what you need—and what you don’t?
Schedule a 10-minute call with a Quote Texas Insurance advisor today.
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