You're opening a business, signing a lease or bidding a job, and someone asks for proof of insurance. Texas law requires insurance in a few specific situations, such as driving a vehicle, running a motor carrier or holding certain trade licenses. Most of what you actually need comes from your lease, your lender and your client contracts. This guide separates what the law requires from what contracts require, so you can bind the right coverage on time.
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What Texas Law Requires
These are the main legal requirements, and each depends on what your business does:
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Vehicle liability insurance. The Texas Department of Insurance says Texas law requires at least $30,000 of coverage for injuries per person, up to $60,000 per accident, and $25,000 for property damage. These are minimums, and business contracts often ask for more.
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Motor carrier insurance. The Texas Department of Motor Vehicles says carriers that operate a vehicle weighing more than 26,000 pounds, haul placarded hazardous materials or carry more than 15 passengers must register and keep an active insurance filing. The minimum for most private or for-hire carriers over 26,000 pounds is $500,000. Federal rules set separate limits for interstate carriers. See our guide to Texas commercial truck insurance.
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Trade license insurance. Some state licenses set liability minimums for the license holder, so check your licensing board's page for your trade. Our contractors insurance page covers common trade rules.
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Workers' compensation. Most private employers can choose whether to carry it, as explained below.
Texas doesn't require every business to carry the same policies. That's why contracts matter so much.
Workers' Compensation: How the Texas Choice Works
Workers' compensation insurance provides lost wages and medical benefits to employees injured on the job. In Texas, most private employers can choose whether to carry it. Employers who carry it are subscribers. Employers who don't are non-subscribers. Here's how the law works:
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Non-subscribers lose liability protections. The Texas Department of Insurance, Division of Workers' Compensation, says they lose the protection of statutory limits on liability and may be sued by injured employees.
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Non-subscribers must give notice. They must post a notice of no coverage where employees can see it, in English, Spanish and any other language as needed. They must also give written notice to new employees.
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Non-subscribers must file with the state. A notice of no coverage is filed with the division between February 1 and April 30 of each year, after hiring the first employee, and after ending a Texas workers' compensation policy. Employers with five or more employees must also report work-related injuries, illnesses and deaths with more than one day of lost time.
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Most employers still carry it. In 2024, 24 percent of Texas employers were non-subscribers, the lowest share since 2016, and 13 percent of employees worked for one.
This is how the law works, not a recommendation to opt out. Talk to an attorney before deciding. A business owner's policy isn't a substitute for workers' compensation. See our workers' compensation page.
What Landlords, Clients and Lenders Often Require
Most of your insurance obligations come from agreements you sign:
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Your lease. Many leases require liability coverage with a minimum limit, property coverage for your contents and proof of insurance before you move in. See who pays for commercial building insurance.
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Your lender. If you finance a building or equipment, the lender may require specific coverage while the loan is open.
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Client and vendor contracts. General contractors, corporate clients and event venues often set minimum limits and may ask to be added to your policy.
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Your license. Check your licensing board for your trade or profession.
What a Texas Certificate of Insurance Can Say
A certificate of insurance shows that coverage exists. It isn't the policy. The Texas Department of Insurance explains what Texas law allows:
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A certificate can't refer to insurance requirements in another contract, such as a construction contract.
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If a policy has only a blanket additional insured endorsement, the certificate can say so, but it can't name the holder as an additional insured.
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A person may have a legal right to notice of cancellation only if the policy or an endorsement names them and the policy or Texas law requires the notice. A certificate can't change that.
That's why we send the endorsement when a contract needs more than a certificate. Our guide on what a certificate of insurance is covers the basics, and existing clients can get same-day certificates.
Core Coverages Dallas Businesses Consider
These are separate coverages, and none replaces another:
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General liability. Helps with bodily injury, property damage and advertising claims. See general liability insurance.
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Commercial property. Helps pay to repair or replace your building and business property after a covered loss, and business income coverage can help with lost income. See commercial property insurance.
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Commercial auto. Covers vehicles used for business. It's not the same as personal auto. See commercial auto insurance.
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Workers' compensation. Covers injured employees' medical bills and lost wages.
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Professional liability. Helps when a client claims your advice or work caused a financial loss. See professional liability insurance.
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Cyber liability. Helps with certain data and network incidents. See cyber liability insurance.
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Umbrella. Adds liability limits above your primary policies. See commercial umbrella insurance.
A business owner's policy bundles general liability, property and business income for many smaller businesses.
Requirements by Type of Business
These are common pressure points, not a full legal checklist:
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Contractors and trades. Licenses, general contractor requirements and job contracts. See contractors insurance.
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Restaurants. Leases, property, liability and workers' compensation decisions. Alcohol sales usually add liquor liability, which is separate. See restaurant insurance.
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Offices and professional services. Client contracts that ask for professional liability and sometimes cyber limits.
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Retail. Leases that require liability limits, plus inventory and equipment coverage.
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Trucking and delivery. State and federal motor carrier rules, plus shipper and broker requirements.
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Property owners. Lender requirements, building coverage and liability.
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Home-based businesses. A homeowner's policy may limit or exclude business activity, so ask about separate coverage.
Dallas-Fort Worth: Local Risks That Shape Coverage
Spanish-language service matters in Dallas-Fort Worth. State rules require non-subscriber notices to be posted in Spanish as well as English, and we offer Spanish-language service. See our Spanish business insurance page.
Weather is a local pressure point. The National Oceanic and Atmospheric Administration's Storm Events Database lists 16 hail events in Dallas County in 2025, 28 in 2024 and 51 in 2023, when 11 had hail two inches or larger. It also lists 44 flash flood events in Dallas County in 2025. Ask your advisor how your property policy treats wind and hail, including any separate deductible, and whether flood needs its own policy. Our guide, do I need flood insurance in Texas, explains the options.
How to Find Out What Your Business Needs
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List your obligations. Collect your lease, loan documents, client contracts and license rules.
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Highlight the insurance clauses. Note the coverage types, limits, additional insured wording and when proof is due.
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Add your own risks. Think about employees, vehicles, customer visits, data and equipment.
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Send it all to an advisor. We'll match your policies to the documents before the deadline.
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Review it every year. Contracts, revenue and operations change.
For what a cost looks like, see general liability insurance cost in Texas. For ways to shape coverage, read how to customize your business insurance plan.
How Thumann Agency Helps
We've placed business insurance in Dallas since 1996. You work with a dedicated advisor, not a call center, and as an independent broker with access to more than 80 carriers, we compare options instead of selling one company's product. We also hold an annual renewal review with clients. Our business insurance hub lists the coverage we place.
Denise was awesome! She took care of our requests and needs. She also explained, in detail, our policy, and she acted as a well prepared liaison between us and the additional insurance recipient. Thank you Denise!
Ms. Andrea King | Google | ★★★★★
Talk to Us about your lease or contract, or Get a Quote.
Frequently Asked Questions About Texas Business Insurance
Do I need workers' compensation if I only hire independent contractors?
It depends on whether those workers are truly independent contractors, and that's a legal question about the facts of each relationship. The label in a contract doesn't settle it. Talk to an attorney, and tell your advisor how you use outside workers. Some clients and contracts also ask for proof of coverage from the people you hire.
What happens if my coverage lapses while a contract requires it?
The result depends on the contract. Many agreements let the other party treat a lapse as a breach, ask for proof by a date or end the work. Read the clause, tell your advisor right away and ask an attorney about your contract. If you receive a cancellation or nonrenewal notice, send it to us immediately.
How much coverage is enough?
There's no single answer. Start with the highest limit your contracts require. Then consider what you own, how many people visit or work for you and how large a single loss could be. An umbrella policy can add limits above your primary policies. Your advisor can compare limits and show what each adds.
Do sole proprietors need business insurance?
Texas doesn't require every sole proprietor to carry the same coverage, but a sole proprietor's personal assets can be exposed to business claims. Leases, clients and licenses often set requirements. Describe your work, and we'll show you what fits, from a business owner's policy to liability or professional liability coverage.
Does my personal auto policy cover business driving?
Often not fully. Personal auto policies may exclude or limit business use, and employees driving their own vehicles on company errands can create gaps. Commercial auto is a separate coverage designed for business use. Tell your advisor how your vehicles and drivers are used so we can match the policy.
Ready to Match Your Coverage to Your Contracts?
Tell us what your lease, lender and clients require. We'll show you where your coverage lines up and where it doesn't. Get a Quote or Call Us at (972) 991-9100.
Last Reviewed: October 2026
Author: Lauren Thumann Director of Marketing.
Sources: Texas Department of Insurance: Auto Insurance Guide, Texas Department of Motor Vehicles: Motor Carrier Registration, Texas Department of Insurance, Division of Workers' Compensation: Employer E-File, Texas Department of Insurance, Division of Workers' Compensation: 2024 Biennial Report Snapshot, Texas Department of Insurance: Certificates of Insurance Frequently Asked Questions, National Oceanic and Atmospheric Administration: Storm Events Database
Disclaimer: This information is provided for general educational purposes only and is not legal, tax, or insurance advice, or a full description of any policy. Coverage terms, conditions, limits, and exclusions vary by carrier and by state, including Texas. Not all coverages or discounts are available in all states. Reviews and ratings are from verified customers and reflect their own opinions and experiences. For details about your specific needs, please contact Thumann Agency directly. Thumann Agency is licensed and operates under Texas Department of Insurance regulations. Workers' compensation participation and non-subscriber rules are set by the Texas Department of Insurance, Division of Workers' Compensation, and can change. Texas minimum limits are set by law and may change, and limits required by a contract may be higher.