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What Kind of Insurances Do Texas Businesses Need?

Breaking Down the Facts About California Errors and Omissions Insurance

Texas is one of the largest states in the US and the second-most populous. With a population of 28.996 million, the State is home to 2.7 million small businesses that employ nearly 4.7 million people.

Below are some of the common business insurances people consider when starting up or running a business in Texas.

Worker’s Compensation Insurance

While worker’s compensation isn’t required by the State of Texas, you should consider getting it. It’s a good insurance policy that helps you pay for missed wages, or for illnesses, injuries, etc. that are contracted on-premises. Not only for the health of your workers but for their continued faith in your business, worker’s compensation insurance is essential.

There are other reasons why you should consider worker’s compensation as well. If your company is ever caught in a lawsuit for an injury sustained by a worker, it pays the bills and the court costs. You can even use worker’s compensation in Texas to cover settlements and judgments that you don’t have the money for.

General Liability Insurance

If you’re a small business in Texas, you should consider getting general liability insurance as well.

General liability insurance covers common lawsuits that come from third parties outside of your business. The insurance covers property damage and bodily injury claimed by third parties. Hence, legal costs that entail hiring lawyers, court order judgments, or even settlements can be covered.

If your business is open to the public or works closely with clients or customers, then general liability insurance is strongly recommended. If you handle client property or rent or own commercial property, then it’s recommended even more so.

Know that general liability insurance isn’t mandated by the government for all kinds of businesses. However, for businesses like construction or contracting businesses, contractor liability may be required. Hence, industries in these fields may be mandated by the state to have this insurance. For Texas, however, this isn’t the case.

Professional Liability Insurance (AKA errors and omissions insurance)

If you own a business that provides professional service that requires expertise, then professional liability insurance is a good option. Clients that come to you for professional advice or expert craftsmanship expect a lot from you. No matter how good you are, businesses do tend to drop the ball once in a while.

Since businesses that charge for their expertise tend to be expensive, unsatisfactory service may anger customers. If that results in lawsuits against the company, then you will need professional liability insurance. It specifically covers the inability of a company to deliver on its promises of quality work.

It specifically concerns expertise and its advertising to customers. Causes for the lawsuits can range from failing to meet a deadline or an omission in the work required. If your business provides ineffective business advice which results in money loss, that can be the most dangerous.

Hence, if you’re providing niche, expert-level services to your clients, it’s in your best interest to consider professional liability insurance.

Cyber Liability Insurance

Cyber liability insurance is fast becoming an important insurance to consider for all companies. Since many are either already online or are making the shift from brick-and-mortar, they require certain level of protection.

These are common digital attacks which can harm businesses and, in some cases, lead to bankruptcy. Employees that aren’t well versed in technology or simply not tech savvy can make some rookie mistakes. Moreover, half-baked security measures can also plague your business due to lack of funds. Hence, cyber liability insurance is no longer optional.

What’s more, small businesses tend to be easy targets for hackers and cyberterrorists. They often target healthcare organizations and financial services providers as well as retailers. Hence, if you even own a grocery store that has an online counterpart, you may need cyber liability insurance.

Business Owner’s Policy

Business Owner’s policy differs from the common insurance policy in that it’s a combination of policies. It combines general liability insurance and professional liability insurance.

This is a wise choice for small businesses that are just starting out in Texas. Most contracts with clients require general liability coverage for certain industries, and small businesses usually have an office premises. This helps cover them both.

If you’re looking to open your own business, or have one already, consider getting these insurance policies. You will be protecting your business against any sort of attacks or harm that may befall it in the future. It’s just common sense that you may want to protect your own asset against any financial risks.


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