Business And Professional Liability Insurance In Texas: How To Protect Yourself & Your Business
Commercial business insurance in Texas protects you against all potential hazards that might arise and threaten your business. In an ideal world, business owners and professionals won’t have to worry about anything bad happening, but the reality is that we live in a world of uncertainties, dangers, and accidents. Unpredictable things can happen to any business and we need to be prepared for them. Commercial insurance in Texas carries numerous benefits for business owners who want to insure their business against potential lawsuits.
Business owners are legally obliged to prepare for the worst. Imagine a customer getting injured at your business premises, an employee hurting a client or causing damage to a business partner, a robbery that takes your cash away, etc. These are the risks you’ll face every day as a business owner. To keep your business safe from potential hazards, you need commercial liability insurance.
Business Insurance Texas: What Does It Cover?
Business insurance provides the highest insurance coverage of all liability insurance types. Commercial insurance policies tend to provide million-dollar coverage for businesses and professionals who are at risk of colossal lawsuits. These businesses can receive the coverage they need. There are also smaller forms of liability insurance such as automotive liability and homeowner’s liability.
Commercial businesses are frequently sued for large sums in Texas and this is why a special bracket of liability insurance exists for commercial purposes. The insurance covers all damages caused by your business or employees to another person or business. This coverage includes things such as:
- Property Damage. If your employee causes damage to another business’s property, your business will be held liable. In the event they decide to press charges, you need the insurance. Property damage includes all damage to infrastructure, personal belongings, and medical payments. It extends to your employees as well. Let’s say a delivery man for your company hits a lamp post while he’s driving. The insurance will pay for the lamp post replacement.
- Personal Disputes. Professional liability insurance Texas protects you against all lawsuits in relation to copyright infringement, intellectual property, slander, and libel. If your business develops a product and/or you are in direct competition with another business they press charges claiming it belongs to them, you need the insurance to protect yourself. If one of your employees causes a scandal by accident, you’ll need to have the legal backing to defend yourself in the court of law.
- Medical Expenses. Many commercial insurance plans cover medical expenses for damages caused to other people. Depending on the policy, you should inquire whether it includes medical coverage. Most professional liability insurance plans do include medical coverage. Example: If one of your employees injures a client by accident, the medical coverage will cover their hospital, drug and rehabilitation costs.
Business Insurance Texas: What Is The Cost?
If you want to purchase commercial liability insurance for your Texas-based business, you want to know how much you’ll pay in annual premiums. The insurance company can calculate how much coverage you need based on the risk factor it posed and the industry in question.
There are few things that might raise the premiums such as your claims history and your experience in the industry (novice business owners and professionals pay more). To calculate the cost, you’ll need to call them up and ask. If you’re unsatisfied with your current coverage, you could raise the coverage limits.
Professional liability insurance Texas can provide sums such as $1-2M for doctors, lawyers and other professionals who need coverage against lawsuits. Similar coverage can be purchased for businesses that are at risk of lawsuits.
Businesses don’t have to produce 7-figure revenue to purchase commercial liability insurance. One could insure a 2-person roofing start-up that produces $140,000 in annual gross revenue. Commercial business insurance is not as expensive as people assume. This is how much you’ll pay depending on the business:
- Low-Risk. Employed persons working and professionals working in medicine, law, and trades can get insured for as little as $1000 a year.
- Medium-Risk. Small start-ups and low-risk businesses pay on average $1000-5000 per year for liability insurance.
- High-Risk. High-risk businesses that produce hundreds of thousands of dollars or millions worth of revenue will pay in excess of $5000 a year, depending on the scope of the business and the risk involved.
NOTE: The rates vary significantly based on the business and the insurance company in question. This is a general guideline that applies to the state of Texas.
Business Liability Insurance Texas: Are You Protected?
Many business owners wrongly assume that they’re safe and won’t be held personally liable if one of their employees causes an accident. However, the truth is that you can be held liable even for things you had no direct influence over.
Business owners wrongly assume that if they register their business as a “Limited Liability Company” (LLC) that they’re safe from personal liability associated with their business. This is plain wrong and LLC’s can become the subject of a lawsuit in Texas.
Warning: Even if you train your employees to service clients with the utmost care and respect, the client can perceive that differently and end up filing a lawsuit. To prepare for unforeseen accidents, businesses must have liability insurance. Here are the top reasons you can be held liable:
- You fail to deliver on business contracts signed with business partners or distributors.
- You sign a guarantee for a loan for another person or business, and the business ends up defaulting.
- Your employees cause injury or a client gets injured on the premise of their business.Your business is not operated as a separate entity from your personal identity.
Business insurance Texas protects business owners from all lawsuits that might come up as a result of their own negligence or when one of their employees is at fault. It covers all the damages that arise from a potential lawsuit and even multiple lawsuits per year. Plans have maximum limits on lawsuits. For instance, you may have $1M limits for each lawsuit and $5M total coverage per year.
3 Types Of Business Insurance Texas
Liability insurance for professionals and commercial business owners can vary significantly, and the plans can be purchased with different coverage amounts (depending on your business needs). In Texas, there are two popular forms of liability insurance:
1) Commercial General Liability Insurance. As the name indicates, this is a general commercial liability plan that offers broad coverage for all business owners’ needs. CGL plans cover you for all property damage, bodily injury/medical expenses and personal disputes (slander, advertising, etc). This type of insurance plan is NOT essential for small businesses because it provides very high coverage and it’s usually recommended for mid-sized to large established businesses. Most GCL plans offer multi-million dollar coverage with multiple lawsuits per year, for businesses who expect lawsuits based on sheer size.
2) Business Owners Policy . BOP is liability insurance for small businesses and self-employed business owners. This policy covers the business owners for property damage, equipment/inventory, business disruptions, and bodily injury. Start-ups are recommended to sign up for BOP plans in the first years of operation.
3) Professional Liability Insurance. This form of liability insurance is necessary for high-risk professionals such as medical workers (doctors, nurses, surgeons, etc), legal workers, law enforcement, and other professionals that require interaction with the general public. Professionals can never predict if a client will end up pressing charges or if they cause damage by accident. This is why professional liability protects them against all possible hazards.
In order to protect yourself and your business, you need to purchase liability insurance. Liability insurance protects you against all possible hazards and lawsuits which may come up as a result of your own negligence or your employee’s negligence but affects your business specifically. This type of insurance provides effective safeguards against property damage, personal disputes, and medical charges.