Most Important Insurance Requirements for Texas Business Owners

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Running a business in Texas brings both opportunity and responsibility. One overlooked responsibility is carrying the right insurance. Without protection, even small setbacks can create major financial challenges. From state mandates to industry-specific risks, owners should know which commercial insurance policies are required and which are simply smart. 

Workers’ Compensation

Unlike many states, Texas does not require most private employers to carry workers’ comp. But opting out removes important lawsuit protections and can expose owners to direct injury claims. The Texas Department of Insurance explains non-subscriber obligations and risks. In higher-hazard roles, the long-term risk often outweighs short-term premium savings.

Commercial Auto Insurance

Texas requires financial responsibility for vehicles used in business. If your company uses delivery vans, service trucks, or regular driving to job sites, commercial auto liability insurance is essential. Even when staff use personal cars for errands, a hired and non-owned auto liability policy can help protect the business after a crash. Review who drives, how often, and for what tasks, then set limits accordingly.

General Liability Insurance

Not mandated by statute, but commonly required by landlords, lenders, and contracts. General liability covers third-party injuries, property damage, and legal defense—think a customer trip on a storefront step or accidental damage at a client site. In practice, it’s a baseline requirement to secure leases, vendor approvals, partnerships, and larger projects, while also reassuring clients that your business operates responsibly, carries adequate protection, and can respond effectively when unexpected issues arise.

Property Insurance + Business Interruption

From Gulf Coast hurricanes to West Texas hail, natural disasters can halt operations. Property insurance helps repair buildings, replace equipment, and restock inventory. Pair it with business interruption coverage to replace lost income during closures.

Typical property coverage includes:

  • Wind, hail, fire, and storm protection

  • Coverage for equipment and stock

  • Safeguards for offices and warehouses

  • Options for temporary or mobile structures

Common Optional Coverages

Beyond the core policies, many Texas businesses benefit from additional protections. These optional coverages are not legally required but often address modern risks, contract expectations, or industry-specific exposures. Adding the right mix can help close coverage gaps and strengthen resilience.

  • Cyber liability for data breaches

  • Professional liability (E&O) for advice-driven work

  • Employment practices liability (EPLI) for HR claims

  • Umbrella liability to extend policy limits

Missing or Insufficient Coverage FAQ

Q: What happens if I skip workers’ comp in Texas?
A: You may save premiums, but you lose legal defenses and face direct liability for injuries—one claim can exceed years of premiums.

Q: Is basic general liability enough?
A: Often not. Contracts may require higher limits, and verdicts can exceed base caps. An umbrella can close the gap.

Q: Does property insurance cover downtime?
A: No. Property insurance repairs damage; business interruption replaces lost income during covered closures. Every Texas business has unique risks, but certain coverages rise above the rest. From workers’ comp and commercial auto to liability and property, thoughtful coverage supports resilience and long-term stability.