Is Your Small Business Underinsured?

Running a small business in Central Texas isn’t just about chasing dreams and keeping customers happy—it’s also about managing risk. And one of the sneakiest risks out there? Being underinsured.

Underinsurance happens when your business coverage doesn’t match your actual risk exposure. Whether it’s due to rapid growth, rising property values, or outdated policies, many small businesses don’t realize they’re underinsured until it’s too late.

Let’s break down why this matters and how to fix it before it becomes a costly lesson.

What Does “Underinsured” Actually Mean?

Being underinsured means your current insurance limits aren’t enough to cover the actual cost of a claim. That could include:

• Rebuilding your building after a fire
• Replacing stolen equipment
• Covering lost income after a disaster
• Paying for a liability lawsuit

In other words, your coverage limit might leave you holding the bag when disaster strikes.

Why Central Texas Businesses Are at Higher Risk

With booming development in the Austin area and increasing property values, replacement costs are climbing fast. Add in the region’s unpredictable weather—from hailstorms to wildfires—and you’ve got a recipe for risk.

If your policy hasn’t been reviewed in the last year or two, you might be relying on outdated valuations. That’s like trying to buy a house in 2025 with 2015 pricing—not gonna cut it.

The Real-World Consequences of Underinsurance

Let’s say your property is insured for $300,000, but rebuilding costs after a fire total $500,000. You’re suddenly $200,000 short—and that’s before lost income, temporary relocation, or inventory replacement are factored in.

Even worse, some policies include coinsurance clauses, which can penalize you for underinsuring. That means even small claims might only be partially covered.

How to Avoid Underinsurance Headaches

Here’s the good news: Underinsurance is totally avoidable with a little expert help.

✅ Get a policy review at least once a year—especially if you’ve expanded, upgraded equipment, or grown your team.
✅ Update your valuations to reflect current replacement costs, not what things were worth five years ago.
✅ Work with a local independent agent (like us!) who understands Central Texas risks and insurance trends.

Let’s Make Sure You’re Fully Covered

At Dowd Insurance Agency, we specialize in helping small businesses in and around Austin protect what they’ve built. We’ll review your current policy, identify any gaps, and make sure your coverage keeps up with your business goals—not just the past.

Don’t wait until a storm, fire, or accident exposes your blind spots.

👉 Let’s talk coverage today—before you need it tomorrow.