Coverage Guide

Commercial insurance, in plain English.

What each coverage does, who needs it, and the fine print that matters most for Texas property owners. Not sure which you need? We'll tell you.

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Property

Commercial Property

Covers your buildings, improvements and business property against fire, wind, hail, theft and other covered causes of loss.

Watch for

Replacement cost or actual cash value — the difference can be huge on an older roof.
Coinsurance: insure below the percentage of value the policy requires and your claim is reduced proportionally.
Agreed value or blanket limits can remove that penalty.

Commercial Property Insurance, defined · RC vs. ACV

Property

Business Income & Loss of Rents

Replaces the income or rent you lose while a covered loss is repaired, plus the extra expense of keeping things running.

Watch for

Choose a time limit that reflects how long a real Texas rebuild takes — often 12 months or more.
Check the waiting period (often 72 hours) before coverage starts.

Business Income, defined · Business income

Property

Wind & Hail

Part of most Texas property policies, but frequently with its own, higher deductible.

Watch for

Percentage deductibles (1%, 2%, 5%) are based on each building's insured value, not the claim.
Cosmetic-damage exclusions and roof payment schedules reduce what you're paid on roofs.

Wind and Hail Deductible, defined · Property deductibles

Property

Named Storm & TWIA

Hurricane and named-storm coverage for coastal properties. In the 14 first-tier coastal counties and parts of Harris County east of Highway 146, private carriers may exclude wind, and the Texas Windstorm Insurance Association (TWIA) can provide it.

Watch for

TWIA generally requires a windstorm inspection certificate for new construction and repairs.
Named-storm deductibles are usually a percentage of insured value.

Named Storm Deductible, defined · TWIA for commercial

Property

Flood

Standard commercial property policies exclude flood. Flood is bought separately through the National Flood Insurance Program (NFIP) or private and excess flood markets.

Watch for

NFIP limits stop at $500,000 for a non-residential building and $500,000 for its contents (apartment buildings: $500,000 building, $100,000 contents) — larger properties often need excess flood.
NFIP policies usually have a 30-day waiting period, so don't wait for the forecast.

Flood Insurance, defined · Commercial flood

Property

Ordinance or Law

Pays for code-required upgrades after a loss, demolition of the undamaged part of a building, and the value of that undamaged part.

Watch for

Especially important for older buildings and anything built before current codes.
Lenders frequently require it.

Ordinance or Law Coverage, defined · Ordinance or law

Property

Equipment Breakdown

Covers sudden mechanical or electrical breakdown of HVAC, boilers, chillers, elevators, refrigeration and electrical systems — which standard property forms exclude.

Watch for

Includes spoilage of refrigerated stock on many forms.
Compare its premium with the cost of replacing one rooftop unit.

Equipment Breakdown, defined

Property

Builders Risk

Covers a building while it's under construction or renovation, through completion.

Watch for

Add soft costs and delay in completion for financed projects.
Have permanent coverage ready on the day the building is put into use.

Builders Risk Insurance, defined · Builders risk insurance

Liability

General Liability

Covers injuries and property damage to others that happen at your property or because of your operations, including legal defense.

Watch for

Read the exclusions: assault and battery, firearms and habitational limits are common.
Additional insured wording must match your leases and contracts.

Commercial General Liability, defined · Additional insured & COIs

Liability

Umbrella & Excess Liability

Adds higher liability limits above your general liability, auto and employer's liability policies.

Watch for

Lenders, brands and investors often require $5M–$10M or more.
Confirm it follows the underlying policies without new exclusions.

Umbrella Insurance, defined

Liability

Liquor Liability

Covers claims arising from alcohol you sell or serve. General liability excludes this for businesses that sell alcohol.

Watch for

Needed by convenience stores, restaurants, bars and hotels with alcohol service.
Landlords frequently require tenants to carry it.

Liquor Liability, defined

Liability

Storage Tank & Pollution Liability

Covers cleanup and third-party claims from fuel tank leaks and other pollution events.

Watch for

Used to meet federal and TCEQ financial-responsibility rules for underground storage tanks.
Ask whether the policy covers known or pre-existing contamination — usually it doesn't.

Storage Tank Liability Insurance, defined · Gas station insurance

Liability

Commercial Crime

Covers money, securities and property lost to robbery, burglary, employee theft and fraudulent payment instructions.

Watch for

Social-engineering fraud (fake wire instructions) usually needs its own coverage line.

Commercial Crime Insurance, defined

Liability

Employment Practices Liability

Covers claims from employees alleging discrimination, harassment, retaliation or wrongful termination.

Watch for

Hotels, restaurants and any business with staff turnover should consider it.

Employment Practices Liability, defined

Liability

Cyber Liability

Covers data breaches, ransomware, funds-transfer fraud and the costs to recover.

Watch for

Property managers hold resident and tenant data, so a breach can bring notification costs and claims.

Cyber Liability Insurance, defined

People & vehicles

Workers' Compensation

Covers employee injuries on the job. Texas is the only state where most private employers can choose not to carry it ("non-subscribers").

Watch for

Non-subscribers lose important legal defenses in injury lawsuits.
Many contracts and leases require it.

Workers' Compensation Insurance, defined

People & vehicles

Commercial Auto

Covers vehicles your business owns, plus hired and non-owned autos used for business.

Watch for

Employees running errands in their own cars create hired and non-owned auto exposure.

Commercial Auto Insurance, defined

At a Glance

Which coverage does my property usually need?

A starting point — every property is different, and your leases and lender may require more.

Coverage	Shopping Centers	Gas Stations & C-Stores	Hotels & Motels	Apartments & Multifamily	Warehouses & Industrial	Office & Medical	Builders Risk	Multi-Property Portfolios
Commercial Property							Not usually
Business Income & Loss of Rents							Not usually
Wind & Hail
Ordinance or Law		Not usually					Not usually
Equipment Breakdown							Not usually
General Liability
Umbrella & Excess Liability		Not usually					Not usually
Liquor Liability	Not usually			Not usually	Not usually	Not usually	Not usually	Not usually
Storage Tank & Pollution Liability	Not usually		Not usually	Not usually	Not usually	Not usually	Not usually	Not usually
Commercial Crime	Not usually				Not usually		Not usually	Not usually
Builders Risk	Not usually	Not usually	Not usually	Not usually	Not usually	Not usually		Not usually

Questions

Straight answers.

What does commercial property insurance cover?

Covers your buildings, improvements and business property against fire, wind, hail, theft and other covered causes of loss.

What does business income & loss of rents insurance cover?

Replaces the income or rent you lose while a covered loss is repaired, plus the extra expense of keeping things running.

What does wind & hail insurance cover?

Part of most Texas property policies, but frequently with its own, higher deductible.

What does named storm & TWIA insurance cover?

What does flood insurance cover?

Standard commercial property policies exclude flood. Flood is bought separately through the National Flood Insurance Program (NFIP) or private and excess flood markets.

What does ordinance or law insurance cover?

Pays for code-required upgrades after a loss, demolition of the undamaged part of a building, and the value of that undamaged part.

What does equipment breakdown insurance cover?

Covers sudden mechanical or electrical breakdown of HVAC, boilers, chillers, elevators, refrigeration and electrical systems — which standard property forms exclude.

What does builders risk insurance cover?

Covers a building while it's under construction or renovation, through completion.