Tips for Buying Small Business General Liability Insurance


Every small business in Texas should have some form of small business general liability insurance to cover the unexpected. You run your business to make a profit and you do not want to have to pay those profits out for damages if you are sued for some reason or if disaster strikes and takes out a portion of your assets.

One of the biggest problem small business owners report having is choosing the right type of insurance to cover the type of business that they are running. Below you will find the answers to common questions business owners ask to help you choose the right type of small business general liability insurance to suit your business needs.

What is the Purpose of Small Business Insurance?

According to the U.S. Small Business Adminstration (SBA), the purpose of having small business general liability insurance is easy really. You simply transfer a risk that you can afford to avoid a bigger risk that you cannot afford a little further down the line. In simple terms, the money that you pay for a small business liability policy today, can save you from going bankrupt if you are sued or disaster strikes even years down the line.

Who Should I Consult When Choosing a Policy?

Of course, a lawyer should look over any policies before you sign on the dotted line and your accountant should let you know what you can and cannot afford to purchase. However, you will also need to find a quality Texas insurance agent, one that is well versed in general liability coverage and other types of coverage, as well.

This insurance policy is not only important to you, it is important to the other people you are in business with, as well.

For example, if you lease the place that you have set up shop in, the property owner may very well require that you have commercial liability insurance policies in place to cover you and him if a disaster should happen.

This type of insurance will cover you and the property owner from everything to civic uprisings to smoke and natural disasters. You should talk to your insurance agent to be sure of what all is covered in any insurance policies you decide to take out.

What Risks Should be Covered?

Your property insurance should cover a wide variety of scenarios. A few of them are listed for you below.

  • Your buildings should be insured if you own them yourself; however, if you lease the buildings, then the property owner should cover your building, not the contents of the building but the building itself.
  • Your personal business property includes things like computers, chairs, desks, and personal office supplies. This should be covered under a separate policy that you obtain yourself. The property owner is not required to have this for you if you lease your property for your business from him or her.
  • Earthquakes and other disasters
  • In addition, flood insurance if it is available in your area, you should check with your insurance agent on this one, because it may be covered under a separate policy instead.

This is an all-risk policy and can be structured to cover anything you want within the policy itself, your insurance agent can help you with the policy and get you what you need.

Texas Liability Insurance

This type of general liability policy is designed to cover a third party in the event that they are hurt while in your business. The following should be covered under a policy that you buy.

  • Personal injury
  • Advertising injury
  • Fire legal liability, oftentimes, this insurance is mandatory if you lease the property that you are using for your business.
  • Completed products and operations
  • Medical expenses
  • Medical payments
  • You should also get general liability for your premises. For example, someone tripping over the corner of the carpet in your shop would be covered under this type of insurance.

You will need to talk to your insurance agent, finding out exactly what will be included in any liability insurance policy you decide to take out. You should think carefully and choose the policy that best suits your business needs, do not let a pushy agent sell you something that you will never need. You do, however, want to be covered for anything when you own your own business.

Set Your Budget

Just like any other form of business on the market today, insurance has different prices and different policies. You should get together with your accountant and decide what type of insurance you need and then set a budget that determines how much you can afford as well. Once you and your accountant have come to an agreement, that is when you will want to find an insurance agent to help you choose the right policies for you, keeping your budget in mind.

Do Your Research

You will not necessarily want to go with the first insurance agent that you come across, as they all have different prices for a wide variety of policies. Take your time, do your research, and find the best possible price for you and your business needs.

These are just a few tips to help you get the right type of liability insurance for your small business. From doing your research to setting your budget with your accountant, you will need to take your time and let your agent help you choose the best Texas small business insurance that will work the best for you and your small business needs.

For more information or for a quote please visit our commercial business insurance page at or call Ronnie Davis 254-857-8800 for a free consult.

6 Questions You Need To Ask About Small Business Insurance Coverage

Commercial Umbrella liability Insurance

As a business owner, you do all you can to protect your employees, partners and customers. Since you likely come into contact with many different people during an average workday, there is a good chance one of these people could become injured in some way and place a claim against your business.

If you are covered through small business general liability insurance, your policy will cover your liability for the injured party. If you are operating without insurance coverage, you could end up paying for all of the damages out of your own pocket. In worst case scenarios, this could lead to major losses in your business.

Why Should You Purchase Business Liability Coverage?

Purchasing general liability coverage helps to reduce the risks involved in operating any type of business. When running your business, you or your employees could easily make a mistake that causes someone to become injured. Depending on your business type, you could cause damage to property. This type of coverage is not only for physical damages. It also covers you for privacy breaches and reputation damages. If your company accidentally exposes private information or causes damages in any way, you could be held liable. This could lead to court cases and long, drawn-out legal battles.

Without a general liability policy, your business could easily become bankrupt. While the price for commercial liability insurance policies can vary, this is a coverage you do not need to neglect purchasing.

Without coverage, you are taking unnecessary risks each time you open your doors for business.

What Types of Liability Coverage are Available?

  • While a small business general liability insurance policy will not cover every area of liability, it can cover you in many ways. It can protect you from being held liable for loss payments that occur because of negligence. This coverage will protect you from loss because of bodily injury, medical expenses, libel, slander, property damage, the cost of defending any lawsuits and settling bonds or judgments brought against your company.
  • Product liability coverage is also something your company should consider. If you are a manufacturer, retailer, distributor or wholesaler, you could be held liable for claims brought against you because of your products. This can protect your company from suffering from a loss due to one of your products causing bodily injury or damages. The amount of coverage you decide to purchase should depend on the products your company offers and the potential risk they may cause.
  • Professional liability insurance is also known as errors and omission insurance. This coverage protects your business from liability resulting from negligence in providing services to your customers and partners. In some states, certain professions are required to carry this insurance. Doctors, lawyers and other professionals must maintain this coverage to be able to offer their services.

Should Small Businesses Purchase Liability Coverage?

Small business owners need small business liability coverage. In fact, small business owners are even more vulnerable to devastating losses. Since your business is smaller than bigger corporations, there are less assets to work with. Should fire, theft, accidents, damages or lawsuits occur, you could end up losing all of your business assets. In some cases, this could even result in you losing your personal assets as well. If you have a small business, it is a good idea to work with an insurance carrier that caters to small business owners so you can be sure you are getting the full liability coverage you need.

What Is Covered Under Business Liability Coverage?

  • A liability policy will cover you for the costs of defending your business in a lawsuit. It also covers investigation, court costs, attorney’s fees, witness fees and any police report costs.
  • It covers any expenses you may incur when being asked to testify for the insurance company.
  • In the event you lose a liability lawsuit, the policy will cover you for any judgments or settlements you are charged with, including medical payments and interest.
  • Liability policies also provide you with coverage for premiums paid on any court-ordered bond that may be a part of your liability case.

Who Is Covered Under Your Liability Policy?

  • Your partners
  • Any officers, directors or shareholders working on behalf of your company
  • Subsidiaries that you own at least 50%
  • Employees
  • Vendors under written contract
  • Volunteers

What Is Not Covered Under Your Liability Policy?

  • Generally speaking, most employee injuries are not covered under this type of policy. You will need to make sure you have worker’s compensation coverage for these types of injuries.
  • Auto liability is excluded, since each vehicle is required to be covered under an insurance policy.
  • Damage to your property is not covered under a general liability policy. You are covered under your property insurance.
  • Depending on your policy, there may be other areas your policy does not cover.

Helpful Tips for Purchasing Coverage for Your Company

To ensure you get the small business general liability insurance you need, it is a good idea to work with an insurance agent who understands your type of business. A specialized agent with Davis Insurance & Associates, can assist you through every aspect of your purchase and will help you to get the very best rates.

Before purchasing any policy and signing your contract, make sure you are fully aware of all of the coverage areas and exclusions your policy states. If there are any areas you have questions about, make sure you ask for clarification. By fully understanding your policy, you will be able to protect your business at all times.

Why not take a few minutes and request your free small business insurance quote. Give us a call toll-free at (800) 328-4711 or apply online at