A Texas Business Owner’s Guide to Liability Limits 

A liability limit is the maximum amount your insurer will pay for a covered claim. Such limits may apply to different policies, such as general liability, professional liability, and commercial auto liability insurance. For example, if a lawsuit against your business results in a $500,000 judgment and your policy limit is $300,000, you’re responsible for the remaining $200,000 out of pocket.

Your policy may offer a per-occurrence limit (the maximum payout for a single incident) or an aggregate limit (the maximum payout across all claims during the policy period). Some policies may also carry sublimits for specific claims.

Why Getting the Limit Wrong Is Costly in Both Directions

Carrying too little coverage is an obvious risk. But over-insuring may also come with higher premiums or coverage your business doesn’t really need. To find the right limits, assess your revenue, contracts, industry, operating location, and exposure to risks and lawsuits.

How Festival Auto Insurance Helps

Festival Auto Insurance works with Texas businesses to match liability limits to actual risk, not just to what’s cheapest. We can help you review your operations, understand your industry, and assist you when you need to file a claim.

Contact us today to discuss your commercial insurance options and request a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.