Frequently Asked Questions
Get answers to common questions about Texas business insurance, coverage options, and requirements.
What types of insurance do Texas contractors need?
Texas contractors typically need general liability insurance, workers compensation (if they have employees), commercial auto insurance for company vehicles, contractors professional liability for design-build work, inland marine insurance for tools and equipment, and often bonds for certain projects. The specific requirements depend on your trade, project types, and whether you have employees.
Is general liability insurance required in Texas?
While Texas doesn't require general liability insurance by law, most clients, project owners, and general contractors require it before you can bid on or work on projects. It's also essential for protecting your business from lawsuits related to property damage or bodily injury.
How much does business insurance cost in Texas?
Insurance costs vary significantly based on your trade, annual revenue, number of employees, claims history, and coverage limits. General liability insurance for small contractors typically ranges from $500 to $3,000 annually, while workers compensation costs depend on your payroll and classification code. Business Owners Policies (BOP) can provide cost savings by bundling coverage.
What is a Business Owners Policy (BOP) and who needs it?
A Business Owners Policy combines property and liability coverage into a single, cost-effective package designed for small to medium-sized businesses. BOP policies are ideal for businesses with annual revenue under $5-10 million, fewer than 100 employees, and operations in low-to-moderate risk industries. They can be enhanced with optional coverages like equipment breakdown, cyber liability, and employment practices liability.
What is the difference between umbrella and excess insurance?
Umbrella insurance provides additional liability coverage beyond your primary policies and often includes broader coverage. Excess insurance simply extends your existing policy limits. Umbrella policies can fill gaps in coverage and provide protection for claims excluded by primary policies, while excess insurance only increases limits for already-covered risks.
What is workers compensation insurance and is it required in Texas?
Workers compensation insurance covers medical expenses and lost wages for employees injured on the job. Texas is unique in that it doesn't require most private employers to carry workers compensation, but if you opt out, you face unlimited personal liability for workplace injuries. Employers liability coverage, included with workers compensation, protects against lawsuits from employees claiming their injuries resulted from employer negligence.
What happens if I don't carry workers compensation in Texas?
Employers who opt out of workers compensation in Texas face unlimited personal liability for workplace injuries. This means business owners' personal assets, including homes, savings, and investments, can be at risk if an employee is injured and files a lawsuit. Many clients, contractors, and business partners also require proof of workers compensation coverage before entering into agreements.
What is contractors professional liability insurance?
Contractors professional liability protects contractors from claims of professional negligence, design errors, or failure to perform professional services. It covers professional exposures from roles as General Contractors, Design/Build firms, construction managers, and owner's representatives. Coverage includes in-house design, BIM, LEED, building commissioning, value engineering, and design-assist services. It can include optional pollution incident liability and mitigation expenses coverage.
What is Employment Practices Liability (EPL) insurance?
Employment Practices Liability Insurance protects businesses from claims related to employment practices including discrimination, harassment, wrongful termination, retaliation, and wage/hour violations. These claims can arise from current employees, former employees, or job applicants. EPL coverage is separate from general commercial liability and can often be added to Business Owners Policies or purchased as standalone coverage.
What types of professional liability coverage are available?
Professional liability coverage is available for many industries including architects and engineers, accountants, real estate professionals, insurance agents, surveyors, environmental consultants, and miscellaneous professional services. Each type addresses specific professional risks and errors and omissions exposures unique to that profession.
What is public liability insurance?
Public liability insurance protects businesses from claims by members of the public for bodily injury or property damage arising from business operations. It's essential for businesses with public access, including retail stores, restaurants, and service providers. This coverage is particularly important for businesses with frequent customer interaction.
What types of surety bonds are available in Texas?
Texas businesses can obtain various surety bonds including bid bonds, performance bonds, payment bonds, license and permit bonds, contract bonds, environmental bonds, regulatory bonds, advance payment bonds, retention monies bonds, warranty and maintenance bonds, and many other specialized bond types. Each serves a specific purpose for different industries and regulatory requirements.
When do I need a surety bond?
Surety bonds are typically required for construction projects (bid, performance, and payment bonds), licensing and permits, regulatory compliance, environmental obligations, and various business contracts. Many public works projects and private construction contracts require bonds before you can bid or begin work.
What is inland marine insurance and do contractors need it?
Inland marine insurance covers tools, equipment, and materials while they're being transported or stored at job sites. It's essential for contractors who have expensive tools and equipment that move between locations, as standard property insurance typically doesn't cover items away from your primary business location. Coverage includes contractors equipment, materials in transit, installation floaters, and equipment breakdown.
What is the difference between inland marine and ocean marine cargo insurance?
Inland marine insurance covers movable property, tools, and equipment used domestically or transported between locations within the country. Ocean marine cargo insurance provides specialized protection for cargo in transit across international waters via ocean freight. Texas businesses involved in international trade through ports like Houston, Galveston, and Corpus Christi may need ocean marine cargo coverage for goods shipped internationally.
What is maritime piracy insurance?
Maritime piracy insurance provides specialized coverage for piracy risks including extortion, detention, hijacking, and kidnap and ransom. It covers ransom payments, legal liability, surrendered belongings, medical expenses, and provides access to crisis response services. This coverage is essential for ship owners, vessel operators, and businesses operating vessels in piracy-prone regions.
What is GAP insurance for auto?
Guaranteed Asset Protection (GAP) insurance covers the difference between your vehicle's actual cash value and the amount you still owe on your auto loan or lease. If your vehicle is totaled, standard auto insurance only pays the depreciated value, leaving you responsible for the "gap" between that amount and your loan balance. GAP insurance is especially valuable for new vehicles, long-term loans, leased vehicles, or if you rolled negative equity into your loan.
What is title insurance and do I need it?
Title insurance protects your ownership rights to property by covering title defects, liens, encumbrances, and other ownership issues that existed before you purchased the property. It's typically required by mortgage lenders and provides protection for as long as you own the property. Owner's title insurance protects your equity, while lender's title insurance protects the mortgage lender's interest. Both are important for comprehensive property protection.
Does my landlord's insurance cover my belongings?
No, your landlord's insurance only covers the building structure, common areas, and the landlord's liability—not your personal belongings or your personal liability. Renters insurance protects your belongings, provides liability coverage, covers additional living expenses if your rental becomes uninhabitable, and includes medical payments for guests. Renters insurance is affordable, typically costing less than $20 per month.
What does homeowners insurance cover in Texas?
Homeowners insurance in Texas covers your dwelling structure, personal property, liability protection, and additional living expenses. It protects against covered perils including fire, wind, hail, theft, and vandalism. However, flood insurance requires a separate policy. Texas homeowners should be aware of wind/hail deductibles that may be percentage-based rather than fixed dollar amounts.
What are the minimum auto insurance requirements in Texas?
Texas requires minimum liability coverage of 30/60/25: $30,000 per person, $60,000 per accident for bodily injury, and $25,000 for property damage. However, these minimums may be insufficient to protect your assets in a serious accident. Many drivers benefit from higher limits, comprehensive coverage, collision coverage, and uninsured/underinsured motorist coverage, especially given Texas's high percentage of uninsured drivers.
How quickly can I get a quote?
We can typically provide quotes within 24 hours of receiving your information. For urgent needs, we can often provide same-day quotes. The speed depends on the complexity of your business and the types of coverage you need.
What information do I need to get a quote?
To get an accurate quote, we'll need basic business information (name, address, years in business), your trade or industry classification, annual revenue, number of employees, details about your projects, and your current insurance information if applicable. For personal insurance, we'll need information about your property, vehicles, and coverage needs.
Can I bundle multiple insurance policies?
Yes, many insurance carriers offer business owner's policies (BOP) that bundle general liability and property insurance, often at a discount. We can also help you combine multiple policies like general liability, workers compensation, and commercial auto for better rates. Personal insurance bundling (home and auto) can also provide discounts.
What is a certificate of insurance and why do I need it?
A certificate of insurance (COI) is a document that proves you have active insurance coverage. Clients, project owners, and general contractors often require COIs before allowing you to work on their projects. We can provide COIs quickly once your policy is active.
What happens if I have a claim?
If you have a claim, contact your insurance carrier immediately. They'll guide you through the claims process, which typically involves documenting the incident, providing evidence, and working with adjusters. Having proper documentation and maintaining good records helps expedite the process. For professional liability claims, early reporting and circumstance reporting can help protect your coverage.
Do you work with multiple insurance carriers?
Yes, as an independent insurance agency, we work with multiple A-rated carriers to find you the best coverage at competitive rates. This allows us to compare options and find policies that match your specific needs and budget.
How do I know if I have enough coverage?
Adequate coverage depends on your specific risks, project values, contract requirements, and assets. We'll assess your business operations, review your contracts, and recommend coverage limits that protect your business without over-insuring. Many clients require minimum coverage amounts that serve as a baseline. For personal insurance, consider your home value, personal property value, and potential liability exposure.
What is Contractors All Risks (CAR) coverage?
Contractors All Risks coverage combines property and liability protection for construction projects. It covers the construction works, materials, equipment, and third-party liability for contractors working on large-scale projects. CAR coverage is comprehensive protection designed specifically for construction projects and is different from standard general liability insurance.
What is management liability coverage?
Management liability coverage combines Directors & Officers (D&O), Employment Practices Liability (EPL), and Fiduciary Liability into a single policy. It protects company leadership and management from various liability exposures including claims of mismanagement, employment-related issues, and fiduciary breaches. This comprehensive coverage is valuable for businesses seeking complete management protection.
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