Texas is one of the best states in the country to run a business. Low taxes, a growing population, a diversified economy, and a culture that genuinely celebrates entrepreneurship. But with opportunity comes risk — and the legal and operational risks facing Texas businesses have grown significantly over the past decade.
What concerns us most, after reviewing the insurance arrangements of hundreds of small businesses across the state, is how many are operating with coverage that looks adequate on paper but would leave them dangerously exposed when it actually matters.
"40% of small businesses never reopen after a major disaster. Of those that do, many close within two years. Inadequate insurance — not the disaster itself — is frequently the deciding factor."
The Most Common Gaps We Find
No Cyber Liability Cover
This is the gap we see most frequently. If your business holds any customer data — email addresses, payment information, medical records — you're a target. A single ransomware attack or data breach can result in legal liability, regulatory fines, and recovery costs that easily run into six figures. Standard business policies don't cover this. Cyber liability needs to be added separately, and it's more affordable than most owners expect.
Undervalued General Liability Limits
Many small businesses carry $1M general liability limits because that's what their lease requires. But a serious slip-and-fall, a product liability claim, or a client suing over professional negligence can easily exceed that. We regularly recommend $2M aggregate as a minimum for any business that deals with the public, and umbrella policies for those with significant foot traffic or complex operations.
Personal Vehicles Used for Business
If an employee has an accident while making a delivery or visiting a client in their own car, your business can be liable — even if they were using their personal vehicle. Personal auto policies typically exclude business use. A commercial auto or hired/non-owned auto endorsement closes this gap, and it's often inexpensive to add.
No Business Interruption Coverage
What happens to your revenue if a fire forces you to close for three months? Or a flood makes your premises inaccessible? Business interruption insurance covers your ongoing expenses and lost revenue during the period you can't trade. Without it, even a relatively minor physical damage claim can become a business-ending event because the money stops but the bills don't.
No Professional Liability (E&O) Cover
If your business provides advice, consultancy, design, or any professional service, you can be sued for errors or omissions — even if you did nothing wrong. Defending a professional negligence claim without E&O coverage can cost as much as losing one. This applies to consultants, designers, accountants, IT professionals, real estate agents, and many others.
A Quick Audit for Your Business
If you're a Texas business owner, here are the questions worth answering right now:
- Do you hold any customer personal data, even just email addresses?
- Do employees ever use personal vehicles for work purposes?
- Could your business survive three to six months without trading revenue?
- Have you reviewed your liability limits in the past two years?
- Does your policy include a business interruption clause, and how long does it cover?
- If you provide any professional service, do you have E&O coverage?
If any of those questions made you uncomfortable, that discomfort is worth acting on. The good news is that addressing these gaps is rarely as expensive as people expect — and far less expensive than the alternative.
"A comprehensive business insurance review takes about 45 minutes. It could save your business. We do them for free, with no obligation to change anything."