When you run a business in Texas—especially in fast-growing areas like Plano, Collin County, and the surrounding DFW Metroplex—choosing the right amount of insurance coverage is one of the most important decisions you can make. Too little coverage can leave you exposed to lawsuits, disasters, or financial hardship. Too much coverage, on the other hand, can mean you’re spending money on protection you don’t actually need.
So how do you find the right balance?
At Sterling Insurance Group, we help business owners across Texas assess their risks and build insurance plans that make sense for their operations. Here’s a practical, step-by-step guide to help you evaluate your business and determine the right amount of insurance coverage.
Why Insurance Coverage Matters
Insurance protects your business from the unexpected—property damage, legal claims, employee injuries, and more. It’s not just a legal or contractual necessity—it’s a core part of a healthy business strategy.
With the right insurance coverage in place, you get:
- Continuity: You can keep your business running after a disaster or major incident.
- Financial Security: You’re not left paying out-of-pocket for lawsuits, repairs, or medical bills.
- Confidence: You can focus on growth, not worst-case scenarios.
Step 1: Understand Your Business Risks
Every business faces risks. The first step is identifying yours.
- Industry-specific risks: For example, contractors face jobsite hazards and liability issues, while retailers deal more with property theft or customer slip-and-fall claims.
- Past claims or incidents: What types of claims have been common in your industry or even within your own business?
- Environmental and regional risks: In North Texas, you need to consider hail, flooding, and severe storms. Construction businesses also need to think about shifting soils or regional permitting regulations.
A strong insurance plan starts with a clear understanding of your exposure.
Step 2: Talk to a Local Insurance Professional
You don’t have to figure this out alone. Partnering with a knowledgeable, local insurance agent—like the team at Sterling Insurance Group—makes a big difference.
- We’ll help you break down your operations: What services you provide, how many employees you have, what assets you own, and what your day-to-day risks are.
- We’ll guide you through your options: General liability, commercial property, professional liability, workers’ comp, commercial auto, cyber coverage—there are a lot of policies out there. We help you choose what’s necessary and skip what’s not.
- We offer risk assessments: These help you spot coverage gaps and opportunities to better protect your business.
Step 3: Take Stock of Your Assets
The more you have to protect, the more coverage you’ll likely need.
- Physical assets: This includes your building (if you own it), tools, machinery, inventory, and office equipment. Your property insurance should be enough to repair or replace everything.
- Digital assets: If you store sensitive customer or employee data, you may need cyber liability insurance.
- Intellectual property: Businesses with patents, trademarks, or proprietary processes should consider protection for those assets as well.
Make sure your coverage reflects the total value of your tangible and intangible assets.
Step 4: Evaluate Your Revenue and Growth Plans
Revenue plays a major role in shaping your insurance needs. Higher revenue often means higher risk and greater liability exposure.
- Current revenue: If your business generates $2 million per year, a $500,000 general liability limit may not cut it.
- Future projections: If you’re expanding operations, hiring more employees, or landing larger contracts in areas like Frisco or Allen, you’ll want to scale your coverage accordingly.
- Contract requirements: Some clients or vendors may require specific policy limits in order to do business with you.
Coverage isn’t one-size-fits-all. It should evolve as your business grows.
Step 5: Analyze Your Liability Exposure
Liability claims can sink a business if you’re not properly covered.
- General liability: Covers bodily injury, property damage, and reputational harm caused by your business operations. It’s essential for nearly every type of business.
- Professional liability: If you offer advice or services—like legal, accounting, or consulting—you could be sued for mistakes or perceived negligence.
- Product liability: If you manufacture or sell products, you may be responsible for harm caused by defects or design flaws.
- Employment practices liability: Protects against claims related to discrimination, wrongful termination, and other HR-related issues.
A good agent will help you assess the likelihood and potential cost of various liability claims so you can choose coverage limits that make sense.
Step 6: Know What’s Legally Required
Texas doesn’t mandate all types of business insurance, but there are still legal and industry-specific obligations you’ll need to meet.
- Workers’ compensation: Texas is unique in that it doesn’t require private employers to carry workers’ comp—but many general contractors, clients, or municipalities will require you to have it.
- Commercial auto insurance: If your business owns vehicles, this is required by Texas law.
- Bonding requirements: Some industries (especially construction) require surety bonds to legally operate or bid on public projects.
Make sure you’re in compliance with both state regulations and industry norms.
Step 7: Determine the Right Coverage Limits
Once you’ve evaluated your risks and assets, it’s time to calculate how much coverage you need.
- Property insurance: Should reflect the full replacement value of your building, tools, and inventory—not just their depreciated value.
- General liability: Most small to mid-size businesses in Collin County carry at least $1 million per occurrence and $2 million aggregate. Larger businesses or higher-risk industries often require more.
- Umbrella/excess liability: Adds extra protection above your other liability policies. It’s a smart move if you face a high potential for lawsuits or large claims.
- Deductibles: Choosing a higher deductible can lower your premiums—but make sure your business can afford it in the event of a loss.
Step 8: Schedule Regular Coverage Reviews
Insurance isn’t a set-it-and-forget-it kind of decision. Your business changes—and your coverage should too.
- Annual reviews: Reevaluate your insurance at least once a year or any time there’s a major change to your operations, staffing, revenue, or assets.
- Post-incident reviews: If you experience a claim or close call, review your coverage to make sure you’re better prepared next time.
- Growth triggers: Expanding your service area, hiring new employees, or investing in equipment are all good reasons to revisit your policy limits.
Regular reviews with a local agent help keep your business protected and your premiums in check.
Protect Your Business with Confidence
At Sterling Insurance Group, we understand the unique challenges Texas business owners face—whether you’re running a family business in Plano, launching a startup in McKinney, or managing a growing construction firm across the DFW Metroplex.
We’ll work with you to assess your risks, tailor coverage to your needs, and adjust your policy as your business grows. Our goal is to make sure you’re covered—without overpaying for protection you don’t need.
Let us help you find the right balance between coverage and cost.
Contact Sterling Insurance Group in Plano, TX today to schedule your free business insurance review.
Sterling Insurance Group | (972) 964-4825 | sterlinginsnow.com