Insurance and Finance

FAQs: Commercial Insurance

By Staci Parks 7.10.23

Texas is one of the most business-friendly states in the country, thanks to a skilled workforce, diverse economy, and highly competitive tax climate and incentives. Over the past few years, Silicon Valley companies like Hewlett Packard and Oracle have moved their headquarters to Texas, making it the state with the most Fortune 500 companies.

Small businesses thrive here, too, with more than 3 million in operation, according to the Texas Economic Development Corporation. These small businesses employ nearly half of the state’s private workforce, according to the U.S. Small Business Association.

No matter the size, commercial insurance is an important investment for business owners and leaders. Grant Dietiker, a Texas Farm Bureau Insurance Agent in Waco, answers common questions about commercial insurance in Texas.

Q: What is the main benefit of having a commercial insurance policy?

A: Protection all around. Protection from people suing you for various reasons or if you made a mistake on the job. We’re humans; we’re going to make mistakes, so that keeps you from having a loss out of your pocketbook. Commercial insurance can also help protect business owners against storm damage and theft. That’s the purpose of insurance. It gets you back to where you are. That way, you’re not feeling a loss.

Q: What types of commercial insurance do you offer?

A: Generally, Agents recommend three types of commercial insurance to policyholders: commercial property, commercial general liability, and commercial package. Each of these policies offers different types and levels of coverage.

Commercial property insurance: protects your business structures against fire, lightning, vandalism, wind, and hail, among other perils. This policy type also covers personal items inside the structure, such as computers, printers, and tools.

Commercial general liability coverage: helps shield your business from the impact of a lawsuit. For example, your business would be protected if a customer stumbles over a curb on your property, falls, breaks a bone, and sues you for liability.

Commercial package policy: combines commercial property, commercial general liability, and commercial inland marine into a single policy. This type of policy offers broad coverage that you can tweak to your business’ specific needs.

Q: What other insurance coverage should I consider for my business?

A: Three more things come to mind:

Commercial inland marine policies, which offer a wide range of coverage, are often added to existing policies to cover items that can be physically moved from a property, such as tools and building materials. Keep in mind: This coverage is part of the commercial package policy. That might be the best way to go when looking for additional coverage for your business.

Disability insurance is ideal for small-business owners. A disability policy can help you support your family should you become sick or injured and can’t work for a period of time.

Life insurance is a wise investment for business owners. A personal life insurance policy can help replace a portion of your income and shield your family from debt should the unthinkable happen. A key person insurance policy helps keep a business running should the owner, co-owner, or another critical employee die. Upon the death of that key person, the company, or policyholder, would be paid out their death benefit to help the income loss, the sales loss, and the entry and retraining of a new person to fill those shoes. Because if you lose that key employee, you’re gonna feel it.

Q: I use my truck to run errands for my business. What type of auto insurance do I need?

A: If your vehicle is used for business purposes, you need to look into a commercial auto insurance policy. This coverage can help protect business-owned vehicles, including pickup trucks, SUVs, and even food trucks. However, liability coverage often does not extend to trailers. If you use trailers with your business vehicles, make sure your Agent knows so that you can get the right coverage. Keep your Agent in the loop, so they can add any newly purchased vehicles or new employee drivers to your policy.

Q. How often do I need to get in touch with my Agent?

A: It’s a good rule of thumb to get in touch with your Agent anytime there’s a significant change to your business that might impact your coverage. You’d want to contact your Agent if you have purchased a work vehicle or machinery or added square footage to your business. For example, if you double the size of your building in renovations but forget to call your Agent, you’d still have coverage for the original square footage only. So, should a fire or a similar disaster occur, now you’ve got half the amount of money needed to rebuild that building. No matter what the change may be, your Agent can’t help you protect the investment if they don’t know about it.

Your Texas Farm Bureau Insurance Agent can help answer your insurance questions, whether you’re a seasoned CEO or you’re looking to start a small business.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation. © 2023 Texas Farm Bureau Insurance