In Texas, business is booming. Between December 2022 and December 2023, the Lone Star added 369,600 jobs. According to Texas Economic Development, that’s the highest number of new jobs in the country.
If you’re one of the millions of business owners in the state, you likely need some form of business insurance to protect your buildings, equipment and workers. Whether you’re an independent contractor who works from home or you own a warehouse with 100 employees, the right small business insurance company in Texas will be able to give you the appropriate coverage your company needs: (view our full methodology)
The 5 best small business insurers in Texas for 2024
- Best Overall: Nationwide
- Best for Hazard Insurance: The Hartford
- Best for Commercial Auto: Farmers
- Best for Contractor Coverage: State Farm
- Best for Cyber Insurance: Travelers
Over 3 million small businesses are based in Texas, employing approximately 44.5% of the state’s workforce. Top industries within the state include construction, technology, transportation and warehousing — all industries with significant insurance needs.
We researched leading insurance companies and picked the top five in the state based on their product options, financial stability ratings and customer support. (We also identified the best insurers for small businesses across the whole country):
Best Overall: Nationwide
About: Nationwide was launched in 1925, so it’s been selling insurance for nearly 100 years. Well-known for its personal insurance products, including personal auto and homeowners coverage, it also sells a variety of business insurance products. Through Nationwide, you can purchase business owners’ policies (BOPs), general liability protection, business interruption coverage and workers’ compensation insurance.
Nationwide is a top-rated company for customer service. In fact, it was J.D. Power’s pick as the best overall insurer for customer satisfaction in the 2023 U.S. Small Commercial Insurance Study.
- AM Best Rating: A (Excellent)
- J.D. Power Customer Satisfaction Ranking: 1st out of 13 insurers
- Number of Small Business Insurance Products: 14
- Customer support: You can get quotes for most business insurance policies online, or you can connect with an agent in person or over the phone.
Our verdict
Nationwide is a good choice for a variety of businesses, from farms or ranches to food service operations. It offers multiple BOPs — packages of several common types of business insurance coverage — tailored to specific industries, such as retail BOPs, food service BOPs or auto industry BOPs.
Nationwide also offers other tools and resources, including a loss control platform. It gives business owners safety and risk management advice from industry experts, including tips for reducing the risk of cyber data breaches and employee injuries.
Best for Hazard Insurance: The Hartford
About: The Hartford is one of the oldest insurance companies in the country; it was founded in 1810, and it has approximately 19,000 employees nationwide. It sells a range of personal and business insurance products, and it serves over one million small businesses. It offers comprehensive business solutions, including workers’ compensation, property, general liability, professional liability and commercial auto insurance.
- AM Best Rating: A+ (Superior)
- J.D. Power Customer Satisfaction Ranking: 10th out of 13 issuers
- Number of Small Business Insurance Products: 17
- Customer support You can reach The Hartford via phone or local agent, and you can get quotes for some business insurance products online.
Our verdict
The Hartford is best for businesses in areas that are prone to natural disasters, such as hurricanes, storms or floods. According to the National Aeronautics and Space Administration (NASA), Texas has the unfortunate honor of ranking first in the nation for the variety and frequency of natural disasters affecting the state.
Basic business insurance policies often exclude coverage for common disasters like floods, so some businesses may need to purchase separate hazard policies. The Hartford offers robust property coverage options, including basic hazard insurance as well as specialized flood insurance provided through the National Flood Insurance Program (NFIP). It also sells business income insurance, a form of coverage that can help you replace lost income if your business is unable to operate due to property damage.
Best for Commercial Auto Insurance: Farmers
About: Farmers is one of the largest property and casualty insurers in the country based on direct premiums written. It was founded in 1928, and it has a variety of business insurance products, including property, liability, workers’ compensation, commercial auto and commercial umbrella coverage. Its commercial auto policies stand out because it has specialized options for multiple vehicle types, including passenger vehicles, cargo vans and contractor vehicles.
- AM Best Rating: A (Excellent)
- J.D. Power Customer Satisfaction Ranking: 4th out of 13 issuers
- Number of Small Business Insurance Products: 7
- Customer support Farmers’ customer support is available via chat or phone. You can also get quotes or get questions answered by contacting a local agent.
Our verdict
Farmers is a useful option for businesses that own vehicles or fleets and need commercial auto coverage. Transportation and warehousing is the fifth-largest industry in Texas based on the number of businesses in operation; according to the Small Business Administration, there were over 302,000 transportation and warehousing businesses in the state as of 2022, the last available data in operation.
With Farmers, business owners can get liability coverage and property insurance to protect their vehicles and any equipment in the vehicles, and the company has a range of discount programs that can make commercial auto coverage more affordable, including a discount for vehicles with safety technology features.
Best for Contractor Coverage: State Farm
About: State Farm has been in operation since 1922, and it’s a major insurance company that sells both personal and commercial insurance products. It has the best-possible rating from AM Best, reflecting its financial stability and ability to honor its policies and payout claims, and a high rating for customer satisfaction from J.D. Power.
- AM Best Rating: A++ (Superior)
- J.D. Power Customer Satisfaction Ranking: 2nd out of 13 issuers
- Number of Small Business Insurance Products: 14
- Customer support: You can reach State Farm’s customer support team via phone or live chat, or you can reach out to one of the company’s 19,000 agents.
Our verdict
Construction is the biggest industry in Texas, so we selected State Farm as the best insurer for contractors because of its BOP packages specifically designed for HVAC, fence installation, roofing and painting contractors. These packages combine business personal property, building property, business liability, and mobile equipment coverage. It also has coverage options for when the project is complete; if someone is injured after the project’s finished and holds you responsible, your insurance policy would cover your legal fees and settlements.
The company also has floaters, also known as insurance riders, you can add to your policy for additional protection for valuable equipment and materials awaiting installation — such as pricey wallpaper or lighting fixtures.
Best for Cyber Insurance: Travelers
About: Travelers is the second-largest commercial insurance company based on direct premiums written. It has over 30,000 employees, and it sells insurance products in the U.S., Canada, the United Kingdom and Ireland. Besides basic business insurance policies like general and professional liability, Travelers also sells more specialized products, including cyber insurance policies.
- AM Best Rating: A++ (Superior)
- J.D. Power Customer Satisfaction Ranking: 12th out of 13 issuers
- Number of Small Business Insurance Products: 14
- Customer support: Travelers doesn’t allow business owners to get quotes online, but you can get personalized help through an independent agent.
Our verdict
Travelers is our pick for the best cyber insurance provider in Texas based on its coverage options and cyber security coaching programs.
Technology is a growing industry in Texas, with companies like Tesla and Dell operating within the state. And as more companies use online platforms and digital data, there is an increased risk of data breaches.
Travelers has cyber insurance packages tailored to different business types, such as public entities or technology companies. These policies combine several forms of coverage to provide the necessary protection you may need if sensitive information is compromised. And Travelers’ cyber security coaches can help you navigate the data breach recovery process and even provide advice to prevent a data breach from occurring.
What to know about Small Business Insurance in Texas
As a business owner in Texas, you may need one or more of the following coverage options:
- Business owners’ policies (BOP): A BOP is made up of several business insurance products packaged into one simple policy. While BOPs can vary by insurer, they typically include property, general liability and business interruption insurance.
- Commercial automobile insurance: Commercial auto insurance is necessary if you own vehicles to ship items or transport clients or customers. It protects you against liabilities that may occur after an accident, and can help you repair or replace the vehicle if it’s damaged or totaled in an accident.
- Cyber insurance: Increasingly necessary, cyber insurance provides protection against hackers or data breaches. It covers the cost of notifying customers, providing identity theft monitoring, and any damages resulting from a lawsuit.
- General liability: General liability coverage is one of the most common forms of business insurance, and it provides protection if someone is injured while on your business’ property. For example, general liability insurance would cover your legal fees and settlement costs if a customer trips and breaks an arm while in your store.
- Professional liability: Also known as errors and omissions coverage, professional liability insurance is for professionals that provide advice or professional services. If you’re sued for negligence, failing to provide the agreed upon services or slander or libel, professional liability insurance would help you with the cost.
- Property: Property insurance covers damages or losses related to storms, fires or theft. It can protect your business building, inventory and equipment.
- Workers’ compensation: If you have any employees, you may need workers’ compensation coverage. Workers’ compensation pays your employees or their families if they are injured or killed while working.
Unlike most states, which require all employers with workers to have workers’ compensation insurance, Texas doesn’t have that requirement. Private employers aren’t required to have workers’ compensation coverage unless they contract with government entities. However, going without workers’ compensation coverage is risky, so purchasing insurance may be a more cost-effective approach.
How to choose a Small Business Insurance in Texas
When deciding what coverage to buy and what insurer to work with, consider the following factors that may affect your insurance needs:
- Business size: How much coverage you need depends on your business’ size. Larger companies with employees may need additional workers’ compensation or liability coverage.
- Business property: Think about any property your business owns. If you work out of a home office or rent a space, you may need less insurance than a business that owns its own retail store, warehouse and vehicle fleet.
- Employee safety: If you have employees, workers’ compensation can be a smart investment. Although Texas doesn’t require it, injured employees can sue you, and the legal fees and damages could be significantly more expensive than an insurance policy would be.
- Data handling: If you store customer information, such as their mailing addresses or order information, and process payments online, you’ll likely need cyber insurance to protect against data breaches.
- Hazards: If your business operates in an area prone to natural disasters like floods or storms, you may need additional coverage like flood insurance.
Frequently asked questions
How much does business insurance cost in Texas?
Your business insurance premiums are based on your location, company size, policy type and coverage amount. In Texas, a basic general liability policy ranges from $42 to $450 per month, while workers’ compensation ranges from $30 to $115 per month.
Is business insurance mandatory in Texas?
Most forms of business insurance are optional in Texas. One exception is commercial auto insurance, which is required for any vehicles used for businesses. Your commercial auto policy must meet minimum liability requirements. Depending on the vehicle size and purpose, the coverage minimum ranges from $300,000 for vehicles transporting household goods to $5 million for commercial vehicles with a gross vehicle weight rating under 10,0001 pounds transporting hazardous materials.
What are the commercial auto requirements in Texas?
In Texas, the state minimum coverage for passenger vehicles is as follows:
- $30,000 in bodily injury protection for one person
- $60,000 in bodily injury protection per accident
- $25,000 in property damage insurance
Other vehicles, such as large transport vehicles, may require additional coverage based on their size and load type.
Our methodology
We chose the five best small business insurers in Texas by evaluating companies on several factors, including:
- Company financial stability: To ensure companies will be in operation for years to come and afford any claims, we looked for companies with ratings of A (Excellent) or better from AM Best, a credit rating agency that evaluates insurers.
- Customer service: Companies that were ranked well in the J.D. Power Small Commercial Insurance Study were given additional consideration, and we also took into account the number of complaints the National Association of Insurance Commissioners (NAIC) received about each company.
- Availability: We narrowed the list based on coverage options and add-ons available in Texas.
- Discounts: Additional preference was given to companies that had discount programs for small business owners.
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