What types of businesses must legally carry insurance?

The state of Texas differentiates itself in numerous ways, including how it handles business insurance requirements. While most states require commercial insurance for many types of businesses, Texas loosens those rules. Paragon Independent Insurance Agency wants Plano, TX business owners to understand the few policy types that TX law requires.

Complex Commercial Auto Requirements

Every business must carry commercial auto insurance on each of its vehicles. Whether your business owns one vehicle or a fleet of 100, each vehicle must carry insurance before you can use it. Just as with personal auto insurance, the state sets minimum amounts. Unlike most states, Texas varies the amount required, not by business type, but by vehicle weight.

If you drive a vehicle of less the 26,000 pounds, you must purchase commercial auto insurance in the following amounts:

• Bodily injury per person in the amount of $30,000,
• Bodily injury per accident in the amount of $60,000,
• Property damage per accident in the amount of $25,000.

If your vehicle weighs 26,000 pounds or more, you must purchase at least $500,000 in liability insurance. For foreign businesses operating in the US, that increases to at least $750,000 in liability insurance.

Farming vehicles weighing 48,000 pounds or more require an insurance policy of at least $500,000 of continuous liability coverage.

Buses also carry varied minimum requirements. Rather than going by weight, buses use a capacity measure. Buses with a passenger capacity between 15 and 26 persons, not counting the driver, must carry liability coverage of $500,000, while buses with a passenger capacity of 26 or more persons, not counting the driver, must carry liability coverage of $5 million. Foreign businesses operating buses traveling to or operating inside the US have higher minimum requirements. Those buses capable of carrying a passenger capacity of 15 or fewer must carry insurance of $1.5 million, while those capable of a passenger capacity of 16 or more persons must carry liability coverage of at least $5 million.

Workers’ Compensation Requirements

Construction firms and motor carrier business owners must carry workers’ compensation insurance. No other type of business in the state of Texas must legally carry workers’ compensation policies, although it certainly makes a good idea to buy one anyway.

Malpractice Insurance

In Texas, doctors aren’t legally required to carry malpractice insurance, nor are attorneys. Hospitals, however, can mandate that a doctor or other medical practitioner purchase malpractice insurance before being allowed to practice medicine at its facility.

Contact Paragon Independent Insurance Agency serving Plano, TX to learn more about the commercial coverage your business must carry to comply with Texas law. Call us today!