Ah, the Lone Star State. Where everything’s bigger, from the barbeque platters and frozen margaritas to the national parks and bustling cities. For nearly 200 years, Americans have been heading to Texas to do things their own way—including starting businesses.

Home to the world’s 9th largest economy by GDP and enduring self-sufficiency (Texas was an independent country for 10 years), it’s easy to see why so many entrepreneurs flock to Texas to start their businesses.1 The state does its part to keep the entrepreneurial culture alive by offering more tax incentives to businesses than any other state. And if you’re considering starting up your own venture, getting business insurance should be at the top of your to-do list.

What business insurance am I required to get in Texas?

Texas workers’ compensation insurance

Texas is one of those rare states where workers’ compensation insurance isn’t required by law. However, forgoing workers’ comp could put your business at risk. If an employee is injured on the job and you don’t have appropriate insurance coverage, they could open a personal injury lawsuit against you.

  • Workers’ compensation insurance exists to safeguard employees from financial impact related to injuries or illnesses sustained on the job. As a business owner, it also protects you from liability related to employee injuries.
  • Workers’ compensation covers expenses and lost wages caused by the following:

Work-related accidents and injuries, such as repetitive stress injury, and resulting disability Illnesses caused by or related to employment

Texas auto liability Insurance

If you drive a car, truck or van as part of your business operation, you’re required to have auto liability insurance or qualify as a self-insurer. Auto liability insurance can protect you and your business from the following types of third-party claims resulting from auto accidents involving your vehicle:

Bodily injury – If you get into an accident and the driver or a passenger of the other vehicle is injured, your auto liability insurance covers the costs arising out of bodily injury, including medical expenses and death benefits.

Property damage – In the above scenario, it’s extremely likely the other car sustained some damage as well. Your auto policy’s Property Damage Liability coverage insures the cost to repair or replace the other party’s vehicle.

Also, depending on the use of your vehicle, the kind of vehicle or if your vehicle is registered or titled under your business name, you may need a commercial auto insurance policy to secure the appropriate coverage and vehicle registration, and avoid penalties.

What other types of business insurance are recommended for Texas?

Texas general liability insurance

General liability insurance (also known as CGL—for commercial general liability) is one of the most essential and effective ways to safeguard your business. It protects your business from the financial consequences resulting from liability related to third-party non-employee bodily injury or third party property damage that arises from your business operations. It also provides coverage for personal and advertising injury. Without general liability insurance coverage, you could be in financial trouble in the event of an unfortunate accident involving a customer or other third party.

Texas professional liability insurance

If you provide professional services and your advice is alleged to have led to one of your clients suffering a financial loss, professional liability insurance can help. When a former customer or client claims—rightly or wrongly—that a mistake in your work led them to suffer a financial loss, professional liability insurance provides you with investigation and defense of the claim as well as making payments of any settlements or judgments.

Inland marine insurance

Inland marine insurance is designed to protect that vital equipment you use to make your business run smoothly. It protects your business by covering costs associated with accidentally damaged, lost or stolen equipment that is on the go with you. Whether you have an expensive tool collection, pricey construction materials, or other equipment you transport to a job site, having inland marine insurance is a no-brainer. At Thimble, we offer inland marine insurance, or Business Equipment Protection as we call it, with coverage for up to $5,000 worth of business property and equipment.

Commercial property insurance

Commercial property insurance protects your company’s building and the contents inside it from all kinds of risks of physical loss or damage, including theft, vandalism, fires and natural disasters such as floods, storms or earthquakes. Commercial property insurance is often included as part of a Business Owners’ Insurance Policy, or BOP.

Professions covered in Texas

No matter what your business is, if you’re in Texas, you’ll benefit from being insured. If a non-employee slips and falls due to a workplace hazard or you accidentally damage a client’s property while working in their home, the last thing you need is to pay out-of-pocket for damages. In Texas, Thimble’s business insurance covers:

Cost of business insurance in Texas

At Thimble, the cost of your business insurance depends on a variety of factors. The amount of risk involved in your business, the industry you’re in, and the amount of business you do all play a part in determining your policy premium.

Another important factor is your location. Large metro areas like Dallas, Houston and Austin might have higher premiums on average than more rural places in West Texas.

Finally, Thimble will look at factors such as your crew size, coverage amount and the number of years you’ve been in business before determining how much your premium will be.

Median Texas insurance costs

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Top cities for businesses in Texas

  • Arlington
  • Austin
  • Corpus Christi
  • Dallas
  • El Paso
  • Fort Worth
  • Frisco
  • Houston
  • Lubbock
  • Plano
  • San Antonio

Bottom line: Texas business insurance

It takes an adventurous spirit and more than a little grit to succeed in the Lone Star State. Bus entrepreneurs who are savvy and prepared will find that Texas is a very rewarding place to run a company. But the last thing you need as a business owner are surprise expenses cutting into your bottom line due to lack of insurance coverage.


  1. PR Newswire: Texas enters 2021 as world’s 9th largest economy by GDP