Are you considering starting a business in Texas? Or perhaps you already have one. Nicknamed the “Lone Star State,” the big state of Texas is home to over 50 Fortune 500 companies including J.C. Penney, At&T, and Dell. Texas is ranked first in Infrastructure and Transportation, fourth in technology and innovation and access to capital, and fifth in cost of living, according to the 2011 CNBC Top States for Business. It’s no wonder business owners are in hog-heaven, with these impressive stats. The state of Texas is the leader in a variety of areas of business, including oil, beef products, and cotton. Combined with its agriculture, oil, and tourism industries, it is no surprise a small business in Texas is bound to be highly successful. Before you solicit Texas insurance quotes, take a look at some basic information on the most common types of business insurance in Texas.
Standard Business Insurance Coverages in Texas
An insurance policy held by a Texas entity, also known as a BOP, is a comprehensive insurance package for small organizations that include multiple liability coverages in a single policy. A BOP includes two leading coverages in a single policy: property insurance and general liability. Business owners insurance in Texas, whether for a BBQ restaurant or a consulting firm, transfers potential risk away from the business owner to the insurance company by giving them protection for a variety of types of liability, such as buildings, gear, and liabilities for legal reasons. Ordinarily, the insurance claims that business owners insurance coverage aims to protect the business from include: income loss, professional liability claims, important papers, legal liability claims, tools breakdown, fire, employee dishonesty, money and securities, and assets claims. The Texas-based firm may possibly have additional components added to the original BOP coverage depending on the potential risks of that business.
General liability insurance in Texas is typically designed to protect leaders of small companies from monetary burdens that may be associated with neglectful acts, omissions, or both, caused by the employer or their employees that may cause physical injury or property damage. Contractual liabilities, liabilities from sold goods, and accidents on the premises of the insured are some examples of exposures that might be covered under general liability coverage. The damage or harm may be a direct result of negligence and not intended. Typical liability insurance for Texans may be a single policy or included in a package policy.
As insurance policy for a small organization that combines more than one type of insurance into one policy is called a package policy, or bundle policy. In general, a package policy in the Lone star State will combine general liability insurance and commercial property (described above and below, respectively); though a package policy may be designed to cover nearly any type of coverage, which depends largely on the needs of the business. A package policy in Texas is recommended for a small business proprietor since since it allows for great flexibility to adjust to a policy for the individual needs and risk exposures of his organization.
Commercial Property Insurance in Texas exists offers protection coverage for any kind of commercial property, including restaurants, retail stores, and office buildings. It covers valuable documents, building, equipment, furniture, supplies, as well as personal property. Commercial property insurance offers protection against numerous disasters, including twisters, hail, explosion, fire, burglary, destruction, natural disasters, and lightning strikes. A variety of companies will benefit from this type of insurance, such as retailers, not-for-profit entities, manufacturers, and companies in the service industry.
Workers’ compensation insurance in Texas provides coverage to enterprises for employee work-related injuries or job-related illnesses for any type of business with employees working for them. Employees of a company with workers’ compensation insurance will receive medical care and lost salary coverage in exchange for the understanding that they will not sue the organization.
Texas is the only state in the country where participation in the Workers’ Compensation system is voluntary. Employers may opt out of the system or provide limited benefits with an approved health and medical insurance plan. If an employer opts of the system an employee can sue them in common law and the employer loses their defense. Most Texas employers, especially smaller ones, chose to be included in the state system and buy Workers’ Compensation coverage privately or in the state run mutual company.
Enterprises that own one or more vehicles used for business operations are advised to be protected with commercial auto insurance. Commercial auto insurance in Texas will offer your business and your employee’s financial protection for use of trucks, vans, cans, or other vehicles used for job-related duties. Commercial auto insurance protects against damages and medical costs that may be caused by vehicle accidents, as well as vandalism and destruction from hail storms. Coverage for businesses in Dallas, Texas include vehicles that are owned, rented, leased, or hired by your enterprise, as well as vehicles owned by your employed and used for work-related duties. Because some employees use their own vehicles for business use, it is highly recommended that businesses obtain a commercial auto insurance policy, which is aptly called non-owned commercial auto insurance.
Commercial umbrella insurance is applicable from the point that your general liability insurance and commercial auto insurance stops. Your company will benefit from umbrella insurance because of the fact that your current liability policies may have coverage limits, and may not cover all expenses if a catastrophic or unexpected event happens. Commercial umbrella insurance in Texas is an important source of coverage that fills in the holes between insurance policies and help to cover a number of exclusions in your primary business liability coverage. Umbrella insurance is a great way to have extra security against property damage, bodily injury, or other types of liabilities.
Some Additional Business Insurance Coverages in Texas to Consider
Errors and Omissions insurance policies provide Austin, Texas employers and persons with protection against lawsuits and claims made by clients or customers for insufficient labor, careless acts, mistakes, and oversights made during business transactions that result in a loss of income or production on the part of the customer or client. Errors and Omissions insurance covers legal defense and court costs, as well as settlements detailed on the insurance contract. In the medical field, obstetricians require malpractice insurance, so proprietors of small firms who provide services or consulting advice, either straightforwardly or through subcontractors, need errors and omissions insurance in Texas.
Professional liability insurance in Texas offers further protection for professionals, such as financial analysts, CPA’s, and general contractors, from being accountable for paying the entire legal cost of defending against a claim of inattention, mistakes, failure to perform, or omission made by a client as well as damages allocated in that claim. The coverage’s key focus is on the financial loss on the part of the client from this type of alleged claim with respect service provided by the worker. Professional liability insurance may present claim coverage, even if the legal actions are unproven. Professional liability insurance in the populous state of Texas is required by law in a variety of professional practices, including legal and healthcare, but is also required by contract in other industries.
Employment Practices Liability Insurance (EPLI) offers Texas-based organizations with protection against accusations of favoritism, wrongful termination, sexual harassment, breach of contract, pay law violations, false imprisonment, emotional distress, libel, slander, mental grief, careless hiring and promotion decisions, and defamation claims. Employment practices liability insurance in Texas is based on the laws, acts, and protection from Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act, and Family and Medical Leave Act — all of which the Equal Opportunity Employment Commission (EEOC) enforces.
Fidelity Bonds in Texas
Fidelity bonds in Texas are a type of insurance purchased by leaders of small businesses in order to protect against losses, including fraud, embezzlement, or theft by one or more workers. Reimbursement for these acts are usually not available because the money has most likely already been spent, fidelity bonds benefit the company by protecting them from paying for the financial burdens. Many San Antonio, Texas businesses protect against these types of theft and fraudulent practices such as employee screening, internal controls, and careful supervision of their workers, but it is not always enough. Losses suffered from professional thefts of money, property, or securities are all covered under fidelity bonds insurance in Texas. The three main types of fidelity bonds include; business service bonds, standard employee dishonesty bonds, and ERISA bonds.
Surety Bonds in Texas
A surety bond is a necessary agreement or contract shared between three parties: the principal, obligee, and surety (insurance company). It represents the guarantee they will pay a specified sum should a party fail to complete a commitment, including fulfilling the terms of the contract. Surety bonds in Texas protect the beneficiary from loss if the contract is not fulfilled, while the surety company takes on the liability for nonperformance. A surety bond is normally required for reimbursement. Owners of Texas companies may need a surety bond to ensure payment of utility bills or state sales taxes, while a contractor may need to post a bond to secure work or be eligible for licenses. Surety bonds in Texas are more often used in the construction industry, but are also used in other industries such as notaries public, health and fitness clubs, medical supply organizations, automobile dealers, and others. Since there are a wide range of small organizations that use and need bonds, several types and features of surety bonds are available in Texas with a variety of guarantees.
Small businesses in the state of Texas have a high probability of success, which makes it ultra-important that these businesses have the proper business insurance policy. If you operate a steakhouse in Houston, a clothing store in San Antonio, or a food truck in Austin, it is crucial you obtain business insurance aside from your standard policy. By receiving additional business insurance, you can protect your business and assets from risks such as liabilities, litigations, theft, fraudulent activity, accidents, natural disasters and other causes of damage. Offer your company the best protection available by obtaining supplemental business insurance policies.