Whether you run a shop in Houston, a farm in West Texas, or a startup in Austin, general liability insurance in Texas can make or break your business. Though it’s not required by state law for most operations, it’s often necessary for licenses, leases, and contracts—and helps protect your business from lawsuits tied to injuries, property damage, or marketing disputes.
This guide explains who needs coverage, what it includes, what it costs, and how to file a claim under Texas law.
Who Needs Coverage in Texas?
Texas does not have a statewide general liability mandate. But in practice, many industries and city contracts demand proof of insurance.
Examples include:
Contractors: Many cities require proof of liability insurance before permits are issued.
Air Conditioning and Refrigeration Contractors: Different industries face varying types of claims, with costs that can range from thousands to hundreds of thousands of dollars depending on the severity.
Electrical Contractors: Must maintain commercial general liability insurance with minimum coverage of $300,000 per occurrence, $600,000 aggregate, and $300,000 aggregate for products and completed operations to obtain and maintain licensing through TDLR.
Even without a law forcing you to buy it, the risk is real: slip-and-fall claims, property damage, and defamation suits can bankrupt small operations. You’ll often need a Certificate of Insurance (COI) to rent space, get contracts, or work on public projects.
What Business Insurance in Texas Covers
A typical Texas general liability insurance policy includes:
Bodily Injury: Covers medical bills and legal fees if someone gets hurt on your property. Example: a customer trips at your Houston storefront.
Property Damage: Pays for damage to others’ property caused by your work—like breaking a window during a repair job in Fort Worth.
Products & Completed Operations: Covers damage from completed work or sold goods—critical for construction and manufacturing.
Advertising Injury: Covers lawsuits from slander, libel, or copyright misuse tied to ads—key for Austin tech firms.
Medical Payments: Covers small medical bills without lawsuits.
Court Costs & Defense: Attorney fees and settlements are covered, even if you’re not found at fault.
If you run a construction business, a tech firm, or even a food truck, this kind of business insurance in Texas protects you from common lawsuits that can arise without warning.
Businesses often confuse general liability and workers’ comp. This guide on general liability vs. workers’ compensation explains the key differences and how both coverages work together to protect your company.
Real-World Risks and Claims in Texas
The most frequent claims vary by industry and region. Here’s how Texas commercial insurance protects you in real life:
Different industries face varying types of claims, with costs that can range from thousands to hundreds of thousands of dollars depending on the severity and type of incident.
Texas weather plays an important role too:
- Tornadoes (DFW): Wind debris can lead to costly property claims
- Flooding (Houston): Storm runoff causes structural damage and lawsuits
- Heatwaves: Outdoor work raises heat stroke risks for guests, vendors, or clients
These examples show why having strong general liability coverage is key—even if the law doesn’t require it.
General Liability Cost in Texas
The cost of general liability insurance in Texas depends on several key factors rather than fixed amounts:
Factors Affecting Cost:
- Industry risk level: Higher-risk businesses like construction typically pay more than lower-risk operations like consulting
- Business size: Measured by annual revenue and number of employees
- Location: Urban areas with higher foot traffic and claim frequency typically cost more
- Coverage limits: Higher coverage limits increase premiums
- Claims history: Businesses with clean safety records may qualify for lower rates
- Experience: Established businesses may pay less than newer operations
How to File a Claim in Texas
The process for filing a general liability claim is straightforward but time-sensitive.
Here’s what to do:
- Report the incident to your carrier within the timeframe specified in your policy
- Document everything: photos, witness statements, police reports
- Keep communication open: respond quickly to requests from your insurer
- Know your rights under the Texas Insurance Code—settlements must be fair
- Mediation or litigation is available if the carrier acts in bad faith
Important Legal Note: Texas has a 2-year statute of limitations for personal injury lawsuits (not insurance claims, which must be filed much sooner according to policy terms). Be proactive.
Final Takeaway
Texas general liability insurance is not optional if you want to protect your business from serious legal and financial risks. From restaurant injuries in San Antonio to ad disputes in Austin to pollution claims in Midland—one uninsured incident could wipe out years of work.
Act now. Call 855‑718‑7552.
