The entrepreneurship spirit is alive and well in Houston with small business growth skyrocketing between 2010 and 2022. While small businesses grew by 12 percent nationally and 27 percent in Texas, Houston-area counties saw phenomenal growth such as Montgomery (62 percent) and Fort Bend (101 percent).
“Small businesses, critical to economic and community development, are considered the lifeblood of our national, state and local economies,” says Understanding Houston, a strategic initiative of Greater Houston Community Foundation. “As significant contributors to our regional economy, small businesses provide income and wealth-generating opportunities to residents.”
Running a small business in Houston comes with unique risks – from hurricanes and floods to cyber threats and shifting regulations – but that doesn’t prevent nearly 10,000 new start-ups each year firing to life in the area.
“Lone Star State folks are risk takers by nature, going back to the iconic wildcatters a century ago, but one gamble not worth taking is rolling the dice on cookie-cutter business insurance,” explains Kyle Dean, Dean & Draper President and CEO. “Your small business is unique and deserves a tailored-insurance plan.”
While the right insurance can mean the difference between bouncing back from a setback or closing your doors for good, many Houston small business owners make costly insurance mistakes that leave them exposed.
Below, we highlight the most common insurance pitfalls — and show how Dean & Draper’s tailored approach helps Texas entrepreneurs avoid them.
Many small business owners try to save money by purchasing only the minimum required coverage or underestimating the value of their assets. This can be a critical mistake. In Houston, where property values and risks (like flooding or theft) are high, being underinsured means you may not receive enough funds to fully recover from a loss. Underinsurance can also apply to liability limits, leaving you personally exposed if a lawsuit exceeds your policy cap.
Behind the numbers: The Insurance Journal reports that 75 percent of small businesses were underinsured.
It’s a myth that only large corporations are targets for cybercrime. In fact, small businesses are prime targets because they often lack robust security. According to Forbes, 83 percent of small businesses would not financially recover from a cyberattack, yet 91 percent have no cyber liability insurance. A single data breach can result in lost customer trust, legal penalties, and devastating financial losses.
Behind the numbers: Mastercard reports that in 2023 nearly 43 percent of all cyberattacks were directed at smaller businesses.
Houston is a city of growth and change — your insurance should keep up. Many business owners forget to update their policies after:
Failing to notify your broker about these changes can create dangerous coverage gaps, leaving new assets or liabilities uninsured.
Natural disasters, fires, or even a cyberattack can force your business to close temporarily. Without business interruption insurance, you could lose income while still facing ongoing expenses like rent and payroll. Many Houston businesses learned this the hard way after recent hurricanes, such as Hurricane Harvey in 2017, and winter storms, like Great Texas Freeze in 2021.
Houston’s diverse economy means risks vary by industry. For example, energy companies may need environmental liability, while tech startups require strong intellectual property and cyber protection. Relying on generic, one-size-fits-all policies often leave critical gaps.
It’s tempting to buy the cheapest policy online, but bargain coverage often comes with hidden exclusions and low limits. When disaster strikes, you may find yourself paying out of pocket for uncovered losses. Value — meaning the right coverage for your risks — should always come before price.
Insurance contracts are complex, but not knowing what is (or isn’t) covered can lead to nasty surprises. Many business owners only discover exclusions or inadequate limits when it’s too late.
Behind the Numbers: The Insurance Journal reports that 70 percent of small businesses did not understand what their business insurance covers.
Some entrepreneurs try to manage insurance on their own or buy policies online without consulting an expert. But insurance is not a commodity — it’s a relationship. Having a knowledgeable, local advisor means you have someone in your corner who understands Houston’s risks and can advocate for you.
Houston’s business landscape brings unique risks that require special attention:
Dean & Draper’s industry-specific expertise ensures you’re covered for the risks that matter most in Houston.
As a small business owner, here is what you can do to make sure you have the right insurance coverage:
Dean & Draper is more than just a broker — we’re your risk management partner. Here’s how our approach protects Houston entrepreneurs:
Don’t let insurance mistakes put your business at risk. Contact Dean & Draper today for a comprehensive risk evaluation and discover how tailored insurance can safeguard your small business and your future.