Running a Business? Don’t Overlook These Coverage Gaps
Owning a small business in Plano, McKinney, Allen, or other Dallas-area suburbs is exciting, but it also comes with risks. Insurance is supposed to protect you from the unexpected. The problem? Many policies leave dangerous gaps that can cost thousands when a claim arises.
At The Sterling Insurance Group, we help local business owners find and fix these blind spots before they turn into expensive surprises. Here are the nine most common gaps we see in North Texas small business coverage and most importantly, how to avoid them.
1. Undervalued Property Coverage
One of the biggest mistakes we see is insuring property for less than it’s actually worth.
Why this matters:
- If your building, equipment, or inventory is undervalued, your payout may fall short after a disaster.
- Many policies have coinsurance clauses, which can reduce claims even further if you’re underinsured.
Local insight: After hailstorms or fire damage in Prosper and Allen, business owners often discover rebuilding costs are far higher than their limits. Getting updated valuations now can save heartache later.
2. No Business Interruption Insurance
If a fire, storm, or power outage forces you to close, how do you keep paying employees or rent?
Business Interruption Coverage helps with:
- Lost income during downtime from a covered event
- Ongoing expenses like payroll and lease payments
It’s one of the most overlooked protections, yet one of the most valuable for Dallas-area businesses.
3. Skipping Cyber Liability Coverage
Think hackers only target tech companies? Think again. Even a small retail shop in Richardson or Celina can fall victim. We have seen examples of invoices being hijacked, materials being rerouted and that is just the beginning!
Cyber liability insurance covers:
- Ransomware and data breaches
- Legal costs and customer notifications
- Lost income from downtime
With so many businesses relying on online payments and customer data, cyber protection is no longer optional, it’s essential.
4. No Professional Liability (Errors & Omissions)
If your business gives advice, designs solutions, or offers consulting, you could be sued if something goes wrong.
Professional Liability protects against:
- Negligence claims
- Mistakes in your work
- Defense costs and settlements
This is critical for accountants, IT providers, consultants, real estate agents, and marketing professionals in North Texas.
5. General Liability Limits That Are Too Low
Almost every business has general liability insurance, but many underestimate how much coverage they actually need.
Why that’s risky:
- Serious injuries or lawsuits can quickly exceed standard limits.
- Settlements, medical bills, and legal fees can wipe out savings.
In many cases, we recommend higher limits—or an affordable umbrella policy—for stronger protection.
6. No Workers’ Compensation
Texas doesn’t require private businesses to carry workers’ comp. But skipping it is risky.
Without workers’ comp:
- An injured employee could sue you directly.
- You’re responsible for lost wages and medical bills.
Even with a small staff in McKinney or Allen, one accident could threaten your entire business.
7. No Employment Practices Liability (EPLI)
Employment claims are on the rise everywhere, even in small companies.
EPLI protects you from claims like:
- Wrongful termination
- Harassment or hostile workplace allegations
- Discrimination based on gender, age, or race
Even if the claim is unfounded, legal defense alone can cost tens of thousands.
8. Subcontractors and 1099s Not Properly Listed
Do you work with contractors, freelancers, or 1099s? If so, pay close attention to how they’re listed in your policy.
Risks include:
- Being charged during audits for uninsured contractors
- Liability for their mistakes if records aren’t kept
- Coverage denials if they’re not properly documented
We help Dallas-area businesses track Certificates of Insurance (COIs) and make sure subcontractors are classified correctly.
9. No Commercial Auto or Hired/Non-Owned Auto Coverage
If you or your employees drive for work, your personal auto insurance probably won’t cover accidents.
You may need:
- Commercial auto coverage if vehicles are owned by the business
- Hired and non-owned auto coverage if personal or rental cars are used for work
One crash in Richardson or Plano could lead to lawsuits your personal policy won’t touch.
Bonus Gap: Not Reviewing Your Policy Regularly
Businesses evolve. Insurance should too. If it’s been more than a year since you reviewed your policies, you could be:
- Overpaying for coverage you don’t need
- Missing protections your business now requires
At Safe Beacon, we offer free annual reviews to make sure your policy grows with your business.
Final Thoughts: Don’t Let Gaps Drain Your Business
Running a small business always involves risk, but ignoring insurance gaps isn’t a smart one. From lawsuits to storms, these gaps can cost far more than your premium ever will.
The good news? You don’t have to figure it out alone.
Let’s Review Your Small Business Insurance Today
Call The Sterling Insurance Group, serving Plano, McKinney, Allen, Richardson, Celina, and Prosper.
Phone: (972) 964-4825
Website: https:www.sterlinginsnow.com
We’ll give you clear answers, honest advice, and coverage options designed to protect your future.