Best Small Business Insurance in Texas 2023: Outstanding Picks

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Best Small Business Insurance in Texas

Starting a small business in Texas can be a rewarding and fulfilling experience, but it’s essential to protect your investment with the right insurance coverage. As you start an LLC in Texas, it’s crucial to research and choose the best small business insurance that fits your needs. 

With many insurance providers offering a wide range of coverage options, selecting the best small business insurance can take time and effort. But fear not! LLCBase is here to help you navigate this critical aspect of running a successful business. In this guide, we’ll introduce you to the best small business insurance in Texas for 2023, highlighting their unique offerings, eligibility criteria, financial strength, and customer satisfaction. 

Best Small Business Insurance

What is a Business Insurance

Business insurance refers to a set of insurance policies designed to protect a business and its owners from potential financial losses and liability risks associated with operating a business. These policies cover various aspects of the business, safeguarding it from unforeseen events such as property damage, lawsuits, employee injuries or illnesses, and interruptions in business operations.

The diverse range of business insurance policies in Texas allows business owners to customize their coverage to suit their industry’s specific needs and potential risks. By investing in the appropriate business insurance policies, owners can focus on growing their business confidently, reassuring that they are protected against any unforeseen challenges that may arise during their entrepreneurial journey.

Small Business Insurance Coverage

If you want to start a business in Texas and apply for business insurance, remember that it only covers the following:

  • Third-party bodily injury and property damage resulting from your business operations
  • Professional errors and omissions
  • Damage to your business property
  • Employee injuries and illnesses
  • Auto accidents involving your business vehicles
  • Cyberattacks and data breaches
  • Loss of income due to a covered event
  • Claims related to wrongful termination, discrimination, and harassment

On the other hand, small business insurance generally does not cover the following:

  • Intentional acts of damage or harm
  • Damage caused by normal wear and tear
  • Floods and earthquakes (unless specifically added to your policy)
  • Employee dishonesty or criminal activity
  • Losses resulting from business activities not disclosed to the insurance provider

10 Best Small Business Insurance Providers in Texas

Choosing the right insurance provider is critical for any small business owner who wants to start a business; perhaps you want to start an insurance company in Texas. Texas is home to a thriving entrepreneurial environment, making it essential for businesses to have comprehensive insurance coverage. To help you make an informed decision, we have compiled a list of Texas’s best small business insurance providers.

1. Allianz

Allianz is a global insurance and financial services provider with a strong presence in over 70 countries. They offer various insurance coverages, including general liability, professional liability, commercial property, and workers’ compensation insurance. Allianz is recognized for its extensive coverage options, global expertise, and strong financial rating, making it a reliable choice for small businesses seeking comprehensive insurance solutions.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A+ (Superior)

Pros
  • Wide range of coverage options
  • Strong financial rating
  • Global presence and expertise
Cons
  • Limited online resources for policy management
  • Not specialized in small businesses
Apply to Allianz

2. Allstate

Allstate is a well-known national insurance provider that offers a variety of customizable insurance policies for small businesses with up to 500 employees. Their coverage options include general liability, commercial property, and workers’ compensation insurance. Allstate is known for its personalized service through local agents and online policy management tools, making it a convenient choice for small business owners.

Eligibility Criteria: Must be a small business with up to 500 employees

Complaint Level: Average

A.M. Best Financial Strength Rating: A+ (Superior)

Pros
  • Customizable coverage options
  • Local agents for personalized service
  • Online policy management tools
Cons
  • Limited industry-specific coverages
  • Mixed customer service reviews
Apply to Allstate

3. Clear Blue Insurance

Clear Blue Insurance is a specialty provider focusing on niche and hard-to-place risks. They offer tailored coverage options for small businesses, including general liability, professional liability, and commercial property insurance. With a strong financial rating and a commitment to underwriting unique risks, Clear Blue Insurance is an ideal option for businesses looking for customized insurance solutions.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A- (Excellent)

Pros
  • Specializes in niche and hard-to-place risks
  • Tailored coverage options
  • Strong financial rating
Cons
  • Limited online resources for policy management
  • Not well-known in the market
Apply to Clear Blue Insurance

4. Farmers Insurance

Farmers Insurance is a national insurance provider offering a wide range of coverage options for small businesses with up to 500 employees. Their policies include general liability, commercial property, workers’ compensation insurance, and industry-specific coverages. Farmers Insurance is known for its local agents who provide personalized service and its commitment to meeting the needs of various industries.

Eligibility Criteria: Must be a small business with up to 500 employees

Complaint Level: Average

A.M. Best Financial Strength Rating: A (Excellent)

Pros
  • Wide range of coverage options
  • Local agents for personalized service
  • Industry-specific coverages available
Cons
  • Limited online policy management tools
  • Mixed customer service reviews
Apply to Farmers Insurance

5. Acuity

Acuity is a regional insurance provider offering comprehensive coverage options for small businesses. Their policy offerings include general liability, professional liability, commercial property, and workers’ compensation insurance. Acuity is recognized for its excellent customer service reputation, online policy management tools, and strong financial rating, making it a reliable choice for small business owners.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A+ (Superior)

Pros
  • Comprehensive coverage options
  • Excellent customer service reputation
  • Online policy management tools
Cons
  • Not available in all states
  • Limited industry-specific coverages
Apply to Acuity

6. CNA

CNA is a leading insurance provider offering various coverage options for small businesses, including general liability, professional liability, commercial property, and workers’ compensation insurance. They are known for their strong financial rating and industry-specific coverages, making them a solid choice for businesses seeking comprehensive insurance solutions.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A (Excellent)

Pros
  • Wide range of coverage options
  • Strong financial rating
  • Industry-specific coverages available
Cons
  • Limited online policy management tools
  • Mixed customer service reviews
Apply to CNA

7. Frankenmuth Insurance

Frankenmuth Insurance is a regional provider offering comprehensive coverage options for small businesses, including general liability, professional liability, commercial property, and workers’ compensation insurance. They are known for their excellent customer service reputation and personalized service through local agents, making them a reliable choice for small businesses in the Midwest.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A (Excellent)

Pros
  • Comprehensive coverage options
  • Excellent customer service reputation
  • Local agents for personalized service
Cons
  • Limited availability outside the Midwest
  • Limited online resources for policy management
Apply to Frankenmuth Insurance

8. Travelers

Travelers is a national insurance provider offering various coverage options for small businesses, including general liability, professional liability, commercial property, and workers’ compensation insurance. They are recognized for their strong financial rating and online policy management tools, making them a convenient choice for small business owners seeking comprehensive insurance solutions.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Average

A.M. Best Financial Strength Rating: A++ (Superior)

Pros
  • Wide range of coverage options
  • Strong financial rating
  • Online policy management tools
Cons
  • Mixed customer service reviews
  • Limited industry-specific coverages
Apply to Travelers

9. Chubb

Chubb is a global insurance provider offering comprehensive coverage options for small businesses, including general liability, professional liability, commercial property, and workers’ compensation insurance. They are known for their strong financial rating and global expertise, making them a reliable choice for businesses seeking extensive insurance solutions.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A++ (Superior)

Pros
  • Comprehensive coverage options
  • Strong financial rating
  • Global presence and expertise
Cons
  • Limited online resources for policy management
  • Not specialized in small businesses
Apply to Chubb

10. Westfield Insurance

Westfield Insurance is a regional provider offering comprehensive coverage options for small businesses, including general liability, professional liability, commercial property, and workers’ compensation insurance. They are known for their strong financial rating and personalized service through local agents, making them a reliable choice for small businesses in the Midwest and Northeast.

Eligibility Criteria: Varies by policy type and industry

Complaint Level: Low

A.M. Best Financial Strength Rating: A (Excellent)

Pros
  • Comprehensive coverage options
  • Strong financial rating
  • Local agents for personalized service
Cons
  • Limited availability outside of the Midwest and Northeast
  • Limited online resources for policy management
Apply to Westfield Insurance

How to Apply for Business Insurance in Texas

Securing adequate insurance coverage is crucial to safeguarding your Texas small business against potential risks and liabilities. Whether you’re just starting or growing your enterprise, follow this step-by-step guide to applying for small business insurance in Texas confidently.

Step 1: Assess Your Insurance Needs

Analyze the specific risks your Texas business may face, including potential lawsuits, property damage, worker injuries, or cyber threats. Consider the following types of insurance to help you determine which coverage suits your needs:

  • General Liability Insurance
  • Property Insurance
  • Workers’ Compensation Insurance
  • Professional Liability Insurance
  • Cyber Liability Insurance
  • Business Interruption Insurance
  • Commercial Auto Insurance

Step 2: Research Texas Insurance Requirements

Each state has unique requirements for business insurance. Research Texas insurance regulations and mandatory coverages, such as workers’ compensation or commercial auto insurance, if applicable.

Step 3: Compare Insurance Providers

Create a list of reputable insurance providers licensed to operate in Texas. Compare their coverage options, limits, deductibles, and premiums to find the policy that best addresses your risks and fits your budget.

Step 4: Gather Necessary Documents

Before submitting your application, gather any necessary documents, including:

  • Business name and contact information
  • Federal Employer Identification Number (EIN)
  • Description of your business operations
  • Number of employees
  • Estimated annual revenue
  • Property details (if applicable)
  • Vehicle information (if applicable)

Step 5: Contact an Insurance Agent or Broker

Reach out to an insurance agent or broker to discuss your coverage needs and obtain insurance quotes. An agent can help you navigate the application process and provide guidance on obtaining the best protection for your Texas small business.

Step 6: Submit Your Application

Fill out the application form provided by your chosen insurance provider. Carefully input the required information and attach any requested documentation. Be accurate and thorough in your responses to ensure you receive the appropriate coverage.

Step 7: Review and Sign the Policy

Once approved, thoroughly review your insurance policy to ensure it accurately reflects the coverage you discussed with your agent or broker. Pay attention to any clauses, exclusions, or limits. If satisfied, sign the policy and make the initial premium payment.

FAQs

Does my small business in Texas need insurance?
Yes, all businesses in Texas are required to have certain types of insurance depending on your industry.
What types of small business insurance are available in Texas?
Some common types include general liability insurance, professional liability insurance, property insurance, and workers’ compensation insurance.
Do I need professional liability insurance as a small business owner in Texas?
It depends on your industry and the services you provide. For example, if you provide consulting or advice, professional liability insurance may be necessary to protect against claims of negligence or a failure to deliver a promised service.
Is workers’ compensation insurance required for small businesses in Texas?
In most cases, yes. Texas law requires almost all employers to provide workers’ compensation insurance.
What does general liability insurance cover?
General liability insurance typically covers property damage, bodily injury, and advertising injury claims.
What types of property are covered by business property insurance in Texas?
Any physical property related to your business may be covered, including your facility, equipment, or inventory.
What happens if I don’t have workers’ compensation insurance for my Texas business?
You may be fined by the state and/or may be personally responsible for paying for your employee’s medical expenses and lost wages in the event of an injury on the job.
Can I buy business insurance directly from the state of Texas?
No, you will need to purchase a policy from a licensed insurance company or agent.
How much does small business insurance cost in Texas?
The cost will depend on a variety of factors including the type of insurance, your industry, and the size of your business.
Do I need flood insurance for my Texas business?
If you are in a high-risk flood zone, yes. However, even if your business is not in a high-risk zone, flood insurance may still be a good idea to protect you from unexpected weather events.
Is windstorm damage covered by standard property insurance in Texas?
It depends on your policy. In some cases, wind damage may be excluded unless you specifically purchase additional coverage.
Can I get business insurance in Texas if I have a poor credit score?
Yes, some insurance companies may still offer coverage, but your premiums may be higher.
Can I cancel my Texas business insurance policy at any time?
It depends on the specific terms of your policy. Some policies may have cancellation fees or restrictions on when you can cancel.
Is liability insurance required for small businesses in Texas?
General liability insurance is not required by law, but it’s a good idea to protect your business from liability claims.
Are Uber and Lyft drivers in Texas required to have commercial insurance?
Yes, in Texas, Uber and Lyft drivers are required to have commercial insurance policies to cover any accidents that may occur while driving for those companies.
What does umbrella insurance cover for my Texas small business?
Umbrella insurance provides additional liability coverage beyond the limits of your primary insurance policy.
Can small businesses in Texas get health insurance for employees?
Yes, small businesses in Texas can offer health insurance coverage to their employees through private insurers or the federal Small Business Health Options Program (SHOP).
How can I select the best insurance policy for my small business in Texas?
Work with a licensed insurance agent who has experience with small business policies to assess your unique needs and choose a policy that best meets them.
Are freelancers in Texas required to have liability insurance?
It depends on the type of work you do as a freelancer. If you work in a high-risk industry, it may be necessary to protect yourself from liability claims.
Can work-from-home businesses in Texas get insurance?
Yes, there are policies available for businesses that are run from home in Texas.
What happens if illegal activity causes damage in my Texas business?
Your insurance company will not cover any damages or claims relating to illegal activity in your business.
Does your personal homeowners insurance cover your business in Texas?
No, in most cases, your personal homeowners insurance policy will not provide coverage for your business-related damages or claims.
What damages are included under crime insurance in Texas?
Crime insurance can cover a wide variety of damages, including theft, employee dishonesty, fraud, and forgery.
What is data breach insurance, and is it necessary for small businesses in Texas?
Data breach insurance is designed to cover financial losses and legal liabilities arising out of data breaches or cyberattacks. Depending on your industry and type of business, it may be necessary to have this kind of coverage in Texas.
Is disability insurance required for Texas small businesses?
Disability insurance is not required by law for small businesses in Texas, but it can be a valuable employee benefit.
How much Coverage is Required for City Contracts in Texas?
Depending on the city and the project, your business may be required to have a certain amount of liability coverage to be eligible for contracts.
Can Farm Owners also Get Business Insurance?
Yes, farm owners can get specialized business insurance coverage that includes equipment, livestock, and crop protection.
Can I avail of additional coverage in case of business interruption?
Yes, you can get business interruption coverage, which compensates you for the loss of income and extra expenses incurred during a disruption to normal business operations due to weather or fire damage and other similar circumstances.
What is cyber liability insurance and has it managed to gain some footing in the state?
Cyber liability insurance covers your liability because of data breaches and cyber threats. With Texas companies being some of the most commonly targeted businesses in US, it’s ganging a lot of grounds here.
What are the popular types of insurance required for Texas small businesses?
The most popular types of insurance required for Texas small businesses are liability insurance and worker’s compensation.
Is liability insurance mandated for Texas small businesses?
While liability insurance is not mandatory in Texas, it is recommended as it helps protect businesses from lawsuits filed by customers or employees.
Are there any minimum liability insurance coverage requirements for Texas small businesses?
No, there are no state-mandated minimum requirements for liability insurance coverage for Texas small businesses.
Is worker’s compensation mandatory for small businesses in Texas?
Yes, all Texas small businesses are required to carry worker’s compensation insurance.
Are there any exceptions to the Texas worker’s compensation insurance mandate for small businesses?
Small businesses with fewer than three employees are exempt from the worker’s compensation insurance mandate in Texas.
Is general liability insurance mandatory for Texas small businesses?
General liability insurance is not mandatory in Texas but is highly recommended to protect small businesses from risks of lawsuits and legal claims.
What are the benefits of having commercial property insurance for Texas small businesses?
Commercial property insurance helps protect businesses from loss or damage to their tangible & intangible properties, finances, and equipment in Texas.
Does Texas require small businesses to carry unemployment insurance?
Texas does not require small businesses to carry their own unemployment insurance but must contribute to the state-run unemployment insurance system.
Can small business owners in Texas get health insurance coverage for themselves & their family members?
Yes, small business owners in Texas can purchase health insurance coverage for themselves and their family members.
What is cyber liability insurance, and do small businesses in Texas need it?
Cyber liability insurance covers businesses in case of a data breach or another type of cyberattack. Small businesses in Texas should have this coverage to protect against cyber threats.
Is professional liability insurance required for Texas small businesses?
No, professional liability insurance is not mandatory for Texas small businesses. However, it is recommended if you provide professional services or advice to clients.
Can commercial auto insurance be purchased by Texas small businesses?
Yes, Texas small businesses can purchase commercial auto insurance to protect business vehicles and drivers.
How does Texas small business insurance differ from insurance in other states?
Texas insurance laws differ from other states, so it’s vital to have an insurance provider with expertise in Texas-specific insurance regulations.
Are there any federal tax credits available to Texas small businesses purchasing health insurance?
Yes, some Texas small businesses may qualify for federal tax credits when purchasing health insurance for their employees through the federal marketplace.
Can Texas small businesses get property insurance specifically for natural disasters?
Yes, Texas small businesses can get property insurance covering specific natural disasters like earthquakes, hurricanes, wildfires etc, based on the business’s vulnerability & risk.
Are there any state-specific incentive programs for Texas small businesses to purchase insurance?
Texas does not have any incentive programs to encourage small businesses to purchase insurance in the state.
Can small businesses in Texas collect insurance or file a claim against damages from hurricanes or other natural disasters?
Yes, small businesses with insurance in Texas can file a claim against damages from a natural disaster, although claims may take time, costing a business their bottom line.
How to find the best insurance provider for small businesses in Texas?
To find the best insurance provider for small businesses in Texas, you should request quotes from at least three insurers and compare coverages, limits, credibility and claim process-efficiency.
Are there any legal implications of not having Texas small business insurance?
Without small business insurance in Texas, Business owners who seek to save on insurance risk better compliance & legal-harm charged to the business account in the instance of accidents or legal dispute.
Is group insurance mandatory for Texas small businesses?
No, group insurance is not mandatory for small businesses in Texas, though many businesses choose to provide it to their staff as workplace benefits for retention & satisfaction purposes.
What is the difference between a deductible and a premium in terms of small business insurance in Texas?
A premium is an amount paid weekly/ monthly/ annually to acquire insurance coverage, while a deductible is the amount a policyholder must pay after filing a claim.
Can Texas small businesses file lawsuits when insurance claims are denied?
Yes, Texas insurance companies can be sued by small businesses if claims are unduly repudiated by insureds. Although courts of legal incompetence & arbitration have final say.
How can Texas small businesses save costs on insurance premiums without compromising coverage quality?
Texas small businesses can benchmark other insurance providers, negotiate group policies, avoids paying for too much coverage than needed for higher premiums.
Will a business owner’s personal assets be at risk in Texas without business insurance coverage?
Absolutely. As an inadequately insured business owner, their personal asset are at risk in Texas, especially if their corporate status is denied- in litigation.
When should a Texas small business review/update their insurance policy?
Texas small businesses should review & update their insurance policy annually or at major changes to business operations like switching service or product-line.
Are employee travel incidents covered by Texas small business insurance?
Yes, Texas small businesses must try to purchase travel insurance coverage that covers illness, accident, and theft-coverage.
Why is it critical for small business owners to advise and closely monitor their employees on insurance requirements in Texas?
As requirement operations evolve, small businesses intending for compliance must advise employee decisions a third-party broker or underwriter who might not possess complete knowledge to Texas legal framework & requirements.
Should contracting small businesses in Texas waive indemnification clauses if insurance is provided compared to if passed-up?
Small businesses who provide their company with insurance in Texas are expected to waive promises of indemnification, limiting the sue-ability of their incompetence or malfeasance towards partners or customers — transfers liability to underwriters involved.
Can Texas small businesses claim business interruption losses as part of their insurance policies?
Yes, if losses are due to a covered circumstance—flood, fire, storm-wear&tear, and earthquake among others – affecting business operations- Insurance and CRASP-proofdocumentation are critical here.

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Conclusion

Selecting the best small business insurance for your Texas LLC is a crucial step in protecting your investment and ensuring the long-term success of your business. Take the time to research each provider, evaluate their eligibility criteria, complaint level, and financial strength rating, and consider the pros and cons of each option. By doing so, you can make an informed decision and choose the insurance coverage that best meets your needs and protects your business in The Lone Star State. Visit LLCBase for more information about starting an LLC in Texas.

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