Although some types of commercial insurance are required for businesses in specific industries operating in Texas (like workers’ comp or commercial auto insurance for fleet vehicles), Texas does not require every company to carry business liability insurance. Liability coverage is a policy within most business insurance plans that covers injuries and property damage caused by the business or its employees, including those caused by services rendered or defective products.
With a few exceptions, most businesses in Texas aren’t legally required to carry liability insurance. A business’s lack of liability coverage can negatively affect personal injury claims, as a business without liability coverage might not have the funds to properly compensate people they injure.
Despite Texas not enforcing liability coverage on a state level, some industries are still obligated to carry it due to the risks inherent in their operations.
Does Texas Require Businesses to Carry Liability Insurance?
- Texas does not require doctors or healthcare providers to carry malpractice coverage, but some healthcare employers may require that physicians carry malpractice coverage as a prerequisite for employment.
- Not all construction companies are required to carry workers’ comp in Texas. However, any business that wants to take on government contracts is required to carry adequate workers’ compensation coverage. This coverage is separate from liability insurance and is intended to pay for injuries caused by falls from great heights, heavy machinery accidents or any other type of injury sustained on job sites. Unlike traditional liability injury claims, injured workers don’t need to prove fault to pursue a workers’ comp claim.
- Texas does require transportation and trucking companies to carry adequate commercial liability coverage. The specific requirements can be found in 43 TAC §218.16 and vary depending on vehicle size, travel distance, whether the vehicles cross state lines with or without passengers and the nature of the cargo.
- Food Services. Food poisoning and other food-related illnesses can sometimes lead to severe and even life-long damage. Alternatively, customers and employees can sustain serious injuries from slip and fall accidents due to sudden spills, slippery floors and other common hazardous scenarios that can occur in restaurants and other food-serving establishments. Texas is one of the rare states that does not mandate workers’ comp coverage or even liability coverage for food service businesses unless they have government contracts. Although it’s not required, it’s typically strongly recommended.
How Liability Coverage (or Lack Thereof) Can Affect Your Personal Injury Claim
Liability insurance provides financial protection for both the injured party and the business, so both parties have sufficient reimbursement for personal damages or legal expenses respectively.
Although you can pursue a claim regardless of whether the business has liability coverage, it can be more challenging to recover necessary compensation without it. Without coverage, the injured party might have to rely solely on the business’s assets, which might not be enough to adequately cover medical expenses, lost wages and other damages. This lack of financial protection can also cause businesses to be more reluctant to pay victims, leading to protracted legal battles and frustrating delays in compensation.
What’s worse, if the business doesn’t have the assets to fully compensate you, or if they declare bankruptcy during your claim’s proceedings, you may only receive a fraction of the compensation you need to recover, putting you in a stressful situation financially. Because the stakes are so high, the absence of liability coverage can understandably make plaintiffs more anxious about the outcome of their case.
Conversely, a business that does have liability coverage can ensure they have the funds to properly compensate personal injury plaintiffs for their injuries, medical bills, lost wages and pain and suffering, which can potentially expedite the claims process and safeguard the business’s continued solvency.
Being injured by a business with liability coverage doesn’t automatically mean your claim will be successful. Businesses can still fight to negate your claim, challenging its validity and undervaluing your injuries. Their insurance policy may also have strict limits that could prevent some plaintiffs – particularly those who have suffered severe or catastrophic injuries — from full and fair recovery.
Even with liability coverage, you’ll still have to fight for your claim’s success. At the Weycer Law Firm, we’ll take the protracted legal battle off your hands, aggressively defending your rights and pursuing maximum compensation on your behalf.
Our Houston Attorneys Are Ready to Fight for You
If you or a loved one has been injured by a defective product or the negligent actions of a business or their employees, we’re here for you. The skilled attorneys at the Weycer Law Firm won’t back down from a fight with negligent businesses.
Discuss your case one-on-one with an attorney by calling (713) 668-4545.