Commercial Insurance Coverage in Texas

Property Protection Scope

Commercial property insurance in Texas provides broad protection for business physical assets against specified perils. Buildings and structures receive coverage for fire, windstorm, hail, and vandalism damages, with coverage applying to both owned and leased locations. Business personal property protection extends to equipment, inventory, furniture, and fixtures essential to operations. Most policies include business interruption coverage, replacing lost income and continuing expenses when covered property damage forces temporary closure. Texas commercial policies typically exclude flood damage (requiring separate National Flood Insurance Program coverage) and may implement specialized exclusions or deductibles for named storms affecting coastal properties. Coverage limits should reflect full replacement cost rather than market value to ensure adequate protection following significant losses.

Liability Coverage Components

Commercial general liability insurance protects Texas businesses against third-party bodily injury and property damage claims. This coverage addresses customer slip-and-fall incidents, product liability when business products cause harm, and damage to others' property during business operations. Most Texas policies provide $1 million per occurrence coverage with $2 million aggregate limits as standard baseline protection. Texas law requires commercial automobile liability coverage for all business vehicles with minimum limits of $30,000 per person/$60,000 per accident for bodily injury and $25,000 for property damage, though most businesses maintain higher limits reflecting actual exposure. Professional liability (errors and omissions) coverage, while not legally required, protects service providers against negligence claims resulting from professional advice or services.

Worker Protection Requirements

Texas stands out among states by making workers' compensation insurance optional rather than mandatory for most private employers. However, businesses without workers' compensation lose common law defenses in workplace injury lawsuits, creating significant liability exposure. Subscribing businesses gain liability protection for workplace injuries while providing employees with medical benefits and partial wage replacement regardless of fault. Non-subscribing employers often implement occupational accident policies providing limited injury benefits without the statutory protections of workers' compensation. Construction contracts with governmental entities and many large commercial projects typically require workers' compensation regardless of the state's optional approach.

Specialized Texas Coverages

Several specialized insurance components address Texas-specific business risks. Equipment breakdown coverage protects against mechanical and electrical system failures, which is particularly valuable given Texas's extreme temperature fluctuations. Employment practices liability insurance addresses wrongful termination, discrimination, and harassment claims—important protection in Texas's employment-at-will environment. Cyber liability insurance covers data breaches and system compromises, with Texas's strict notification laws making this coverage increasingly essential. Crime insurance protects against employee theft, forgery, and fraud, addressing internal threat exposures beyond standard property coverage. These specialized protections complement core coverages to address Texas businesses' complete risk profiles.