What Small Businesses Need to Know About Texas’ New Cybersecurity Law

Texas Sets the Bar: What Small Businesses Need to Know About the New Cybersecurity Law

If you run a small business near Austin or anywhere in Central Texas, here’s a heads-up: Texas just passed a new law that sets clear standards for how companies handle cybersecurity. Think of it as a digital safety playbook—and following it could protect your business from cyberattacks and liability.

What’s This Law All About?

House Bill 4, officially in effect as of September 1, 2025, gives businesses a legal framework for creating and maintaining a cybersecurity program. If your business experiences a data breach, this law could shield you from liability—but only if you’ve been following best practices.

Why Should You Care?

Because cyber threats aren’t just targeting big corporations anymore. In fact, small to midsize businesses are increasingly in the crosshairs—especially those handling sensitive customer data like payment info, medical records, or Social Security numbers.

By implementing a solid cybersecurity program that aligns with recognized frameworks (like NIST, ISO, or the CIS Controls), Texas businesses may be able to use what’s called a safe harbor defense if they’re sued over a data breach. Translation: if you can prove your security practices meet the standard, you may not be held legally liable.

What Counts as a “Cybersecurity Program”?

To qualify for this legal protection, your cybersecurity efforts must be:

• Documented and based on an industry-recognized framework
• Tailored to your business size, complexity, and risk level
• Regularly updated as threats evolve and as your business changes

Is This Just for Tech Companies?

Nope! Whether you’re running a retail store, HVAC company, marketing agency, or a family-owned restaurant—if you store sensitive customer data digitally, this law matters to you.

How Can Dowd Insurance Agency Help?

We’re not just here to help when disaster strikes. At Dowd Insurance Agency, we partner with small business owners across Central Texas to help identify digital risks and secure cyber liability insurance that complements their cybersecurity strategies.

Cyber insurance won’t stop a breach, but it can:

• Cover costs like legal fees, notification expenses, and data recovery
• Give your business financial protection while you get back on your feet
• Provide access to expert resources to guide you through a breach response

Bottom Line

Don’t wait until your business is hit by a cyberattack. Texas has laid out the rules—now it’s your move. Secure your systems, protect your customers’ data, and talk to an expert (like us!) about adding a cyber liability policy to your coverage.