Texas Small Business Insurance Checklist

Four contracts carry a small Texas program

A Texas small business insurance checklist runs down six lists: the property the business owns or leases, the services it sells, the people on payroll, the vehicles it drives, the contracts that name a limit, and the documents an underwriter asks for. Work the six in that order and the submission is ready before the first call.

Four contracts carry most of a small Texas program: general liability, commercial property, workers compensation and commercial auto. A business owners policy packages the first two into one form.

Aulona Insurance Group places those lines for Texas businesses statewide: Texas Business Insurance.

Property: what the business owns or leases

Commercial property coverage answers the building, the stock, the equipment and the fit-out, and an underwriter rates what the owner lists rather than what the owner happens to own.

List the property before the call:

• The address of every location, and whether the business owns the building or leases the suite
• The tenant improvements the business paid for, because a landlord’s policy answers the shell and not the build-out
• Equipment by category and by replacement value: production, kitchen, computers, tools
• Stock and inventory at each location, plus whatever sits in a storage unit or in a vehicle overnight
• Property the business does not own but is responsible for, such as leased equipment or customer goods held on site

A business owners policy packages that property with the liability: Business Owners Policy Insurance.

Services: what the business sells and promises

General liability answers bodily injury to someone outside the business and damage to property belonging to someone else, and the service list decides whether a second liability policy belongs on the account.

Write the service list out plainly:

• Every service performed, named as a service rather than as a job title
• Whether any service is advice, a design, a plan or a professional opinion a client relies on, which is the professional liability question
• Whether anything is manufactured, assembled, private labeled or resold, which brings products liability into the form
• Whether work is performed away from the premises, and in whose building it happens
• Whether any part of the work is subcontracted, and whether each subcontractor carries coverage of its own

General liability is the base contract under all of it: General Liability Insurance.

Employees: payroll and the workers compensation election

Texas Labor Code §406.002 makes workers compensation elective for most private Texas employers, so an owner decides whether to carry it instead of filling in a form that was already compulsory.

Have the payroll picture ready:

• Head count, split into W-2 employees, owners on payroll, and 1099 contractors
• Total annual W-2 payroll, and the payroll inside each job class, since a counter job and an installer job rate apart
• Whether the business has elected coverage or is a non-subscriber, which Texas Labor Code §406.004 requires an employer to report in writing to the Texas Department of Insurance, Division of Workers’ Compensation
• Which employees drive for the business, and whose vehicle each one drives
• The injury history: dates, descriptions, and what each claim cost

Aulona Insurance Group places the coverage for employers who elect it: Workers Compensation Insurance.

Vehicles: what is titled to the business

Commercial auto answers a vehicle titled to the business, and a personal auto form excludes the business use it was never rated for.

List the fleet, even a fleet of one:

• Year, make, model and VIN for every vehicle titled to the business
• Who drives each vehicle, with license numbers and dates of birth
• Whether any vehicle carries goods or people for pay, which is the question a hire-and-reward exposure turns on
• Whether employees run errands in their own vehicles, which is the hired and non-owned exposure
• Trailers, and anything towed behind a listed vehicle

Commercial auto goes to market on the same submission as the package: Commercial Auto Insurance.

Contracts: the limits somebody else sets

A lease, a client contract or a vendor packet usually sets the limit a small Texas business has to carry, and that limit outranks whatever the owner would have bought unprompted.

Pull the paperwork and read the insurance clause:

• The limit each contract names, per occurrence and in the aggregate
• Whether the contract demands additional insured status, a waiver of subrogation, or primary and non-contributory wording, each of which is an endorsement on the policy rather than a line typed on a certificate
• Who has to appear as the certificate holder, and at which address
• The renewal dates the contract ties each certificate to

Texas Insurance Code ch. 1811 regulates certificates of insurance in Texas and does not let a certificate amend the coverage the policy provides.

Documents: what to have on the recorded call

Aulona Insurance Group opens every commercial account on a recorded call with Luka Cenaj, the agency’s licensed principal, and that call runs short when the paperwork is already on the table.

The paperwork an underwriter asks for:

• The legal entity name, the assumed name the business trades under, and the federal tax ID
• The years in business, and the prior policies with their expiration dates
• The current declarations pages, so limits and deductibles carry forward correctly
• A loss run, or a written description of every claim in the past three years
• The lease, and any contract that names an insurance limit
• The payroll figures, the vehicle list and the property values from the lists above

No commercial policy is quoted or bound without that call. An owner who prefers Albanian can have the whole conversation in Albanian.

Where Aulona Insurance Group is not the right fit

Aulona Insurance Group cannot place every Texas business, and an owner is better served hearing that before working the checklist than after.

On the agency’s package lines, which are the business owners policy, general liability, commercial property and professional liability, these classes have no market:

• Roofing and siding, which sits outside the package lines as a no-market problem rather than a pricing one
• Night clubs, gas stations, towing operators and auto dealerships
• Hospitals and physician practices
• Marijuana and cannabis businesses
• Used-goods dealers and non-durable goods wholesalers
• Livestock operations and pet breeders

Commercial auto and liquor liability are questions for the recorded call rather than anything this page offers. Life, health, Medicare and disability coverage are not written at all.