Small Business Insurance Checklist for Texas

Running a small business in Texas means wearing a lot of hats. Insurance shouldn't be the one that keeps you up at night. Use this checklist to see what you have, what you might be missing, and what to ask your agent.

1. General liability

What it covers: Injuries to customers or visitors, damage you cause to someone else's property, and certain advertising injuries, plus legal defense costs.

Who needs it: Nearly every business. Landlords, clients and general contractors often require proof of it before you sign a lease or start a job.

☐ Do your limits meet your lease and contract requirements? ☐ Do you need to add clients as "additional insureds"?

2. Commercial property

What it covers: Your building (if you own it), equipment, inventory, furniture and tools.

Texas angle: Hail, wind and flood are the big ones. Check your wind/hail deductible and remember that flood is usually excluded and needs a separate policy. TDI's business insurance information and the SBA's guide to business insurance are good starting points.

☐ Is your property insured at replacement cost? ☐ Do you have flood coverage if you're in a flood-prone area?

3. Business Owner's Policy (BOP)

A BOP bundles general liability and commercial property, often with business interruption coverage, at a lower price than buying each separately. Many small offices, shops and restaurants qualify.

☐ Would a BOP cost less than your current separate policies?

4. Business interruption (business income)

If a covered loss, like a fire or storm damage, forces you to close, business income coverage can replace lost income and help pay ongoing expenses like rent and payroll.

☐ How long could your business survive if you had to close for 60 days?

5. Commercial auto

Key point: Your personal auto policy may not cover vehicles used mainly for business, and it may exclude business use of personal vehicles in some situations. Vehicles titled to the business need a commercial auto policy.

☐ Are all business vehicles on a commercial policy? ☐ Do employees drive their own cars for work? Ask about hired and non-owned auto coverage.

6. Workers' compensation: Texas is different

Texas is the only state where most private employers can choose whether to carry workers' comp. Employers who opt out are called nonsubscribers. But opting out has real consequences:

• Nonsubscribers can lose certain legal defenses if an injured employee sues.
• They must file a notice with the Texas Department of Insurance Division of Workers' Compensation each year and notify employees. See TDI's nonsubscriber reporting page.
• Some contracts, especially government and construction work, require workers' comp.

Workers' comp pays medical bills and lost wages for employees hurt on the job and generally protects the employer from lawsuits over those injuries.

☐ Have you compared the cost of coverage with the risk of going without? ☐ If you're a nonsubscriber, are your filings and notices current?

7. Professional liability (errors and omissions)

If you give advice or provide a professional service, such as consulting, real estate, accounting or design, professional liability covers claims that your work caused a client financial loss.

☐ Does your industry or client base expect E&O coverage?

8. Cyber liability

If you store customer information, take card payments or rely on email and online systems, a data breach or ransomware attack can be expensive. Cyber insurance can help with notification costs, recovery and liability.

☐ Do you store names, addresses, Social Security or card numbers?

9. Commercial umbrella

An umbrella policy adds extra liability limits over your general liability, auto and employer's liability policies. It's an affordable way to protect against one large claim.

☐ Would a single lawsuit exceed your current limits?

10. Employee benefits

Group health, dental, vision and life insurance help you attract and keep good people. Even small employers have options.

☐ Are you losing candidates to employers with better benefits?

11. Key person and buy-sell life insurance

If one owner or key employee is essential to the business, life insurance can fund a buy-sell agreement or help the business survive the loss.

☐ Is there a plan if a partner dies or becomes disabled?

12. Surety bonds and licenses

Some Texas trades and contracts require bonds. These aren't insurance for you, but they're often part of the same conversation.

☐ Do any licenses, permits or contracts require a bond?

Review once a year

Your business changes: new hires, new vehicles, new locations, new services. Review your coverage at every renewal or whenever something big changes. Keep certificates of insurance organized for clients and landlords.

Let us run the checklist with you

We're one local agent with access to many carriers, and we've helped Texas businesses for 25+ years. We'll go through this checklist with you, find gaps and overlaps, and compare quotes from several carriers.

Get a business quote, or call or text (281) 379-5400. Need a certificate or policy change? Email service@taltonagency.com.

This article is general information, not legal or coverage advice. Your policy wording, carrier and situation decide what's covered. Updated October 2026.

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