Contractor Insurance in Texas
Contractor insurance is the group of policies a trade business carries so one accident does not stop the work: a customer hurt on the job, damage to a property, a wrecked work truck, an injured employee. In Texas it is also the proof a general contractor, a property owner or a city asks for before you start. Our Texas office places and services coverage for contractors across the state and compares options from more than one company.
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Who needs contractor insurance in Texas?
Contractors, subcontractors and independent tradespeople, whether the crew is one person or several. Many general contractors, property managers and cities ask for a certificate of insurance before work starts, and a few licensed trades have to carry liability to keep the license.
Does Texas require contractors to carry insurance?
These figures come from the agencies that license each trade. They are licensing minimums, not a recommended limit for any business.
Not as a rule. Texas has no statewide general contractor license, so there is no single law that requires every contractor to carry insurance. The Texas Department of Licensing and Regulation publishes the list of trades it licenses, and painting, flooring, roofing, handyman work and general contracting are not on it. For those trades the requirement comes from the people you work for: the contract, the general contractor, the property owner, the lender on the project, and the city when it issues a permit. Many of them ask for a certificate of insurance before you start.
Pick a trade
Electrical
Texas Department of Licensing and Regulation
- 300,000dollars per occurrence
- 600,000dollars aggregate
- 300,000dollars for products and completed operations
An electrical contractor carries general liability at these minimums and shows proof with every application and renewal.
Air conditioning
Texas Department of Licensing and Regulation
- 300,000dollars per occurrence, Class A license
- 100,000dollars per occurrence, Class B license
The air conditioning and refrigeration minimum is set by license class.
Plumbing
Texas State Board of Plumbing Examiners
- 300,000dollars of commercial general liability for all claims in a year
A Responsible Master Plumber keeps a certificate on file showing at least this much.
Every other trade
The contract, not the state
Painting, flooring, roofing, handyman work and general contracting are not licensed by TDLR, so there is no license minimum. The general contractor, the property owner, the lender and the city set the requirement, and many ask for a certificate of insurance before you start.
Workers compensation is a separate question. Texas does not require most private employers to carry it. A business that goes without it is called a non-subscriber. The exception contractors usually run into is public work: Texas Labor Code Section 406.096 requires a contractor on a governmental entity's construction project to certify that its employees are covered, and each subcontractor has to certify the same. Keep in mind that a license minimum is a floor. A customer or general contractor can ask for more, and many do.
What does contractor insurance include?
A contractor policy is really several policies, and each one answers a different question. A review with our Texas office starts by matching them to the work you do, the contracts you sign and the people and vehicles you send out.
General liability
The policy a certificate request almost always names first. It can help pay when someone is hurt or their property is damaged because of your work: a customer trips over a cord, a ladder goes through a window. Completed operations is the part that follows your work after you leave, like a pipe you installed that leaks a month later. General liability insurance
Commercial auto
Coverage for the trucks and trailers the business uses, and for vehicles it does not own, like an employee running to the supply house in their own car. A personal auto policy is written for personal use and may not respond to a work claim. Commercial auto insurance
Workers compensation
Coverage for employees who are hurt on the job. Optional for most private employers in Texas and required on governmental contracts. The decision affects your lawsuit protection, your bids and what a general contractor will accept from you. Workers compensation insurance
Tools, equipment and materials
Tools on the truck, a trencher at the job site, materials delivered before you arrive. Property that moves from job to job is usually covered by an inland marine or tools and equipment form, separate from the policy on the shop. Commercial property insurance
Bonds
A bid bond, a performance bond or a license bond is a guarantee that you will do the job or follow a rule. It is not insurance. The request usually comes from the project owner or the licensing agency. Surety bonds
The shop, the yard and the office
A contractor with a building, inventory and office equipment can often package property and liability in one policy, with the vehicles and the crew covered separately. Business owners policy
What is a certificate of insurance, and what is an additional insured?
A certificate of insurance is a one-page summary of the coverage you already have: the policies, their limits and their dates. It does not add coverage and it does not change the policy. When a general contractor, a property manager or a city asks for one, they are checking that your coverage meets the contract before you start.
Many contracts ask for more than a certificate. Additional insured means the customer or general contractor is added to your liability policy for claims that come from your work for them. A waiver of subrogation means your insurance company agrees not to go after them to recover what it paid on a claim. Primary and noncontributory means your policy pays first, before theirs. Each of these is an endorsement to your policy, with its own cost and its own wording, and each should be checked against the contract before you quote the job, not after you start it.
Send us the contract or the certificate request. Our Texas office reads the insurance section, tells you which items your policy already meets, which ones need an endorsement and which ones are worth a conversation with the customer, and issues the certificate once the coverage is in place.
What each part of a certificate means. Pick a number.
- Named insured
- Your business, exactly as the policy names it. If the contract names a different entity, that is the first thing to fix.
- Insurers
- The company carrying each policy, one line per policy. The letter next to each coverage row points back to this list.
- General liability limits
- Per occurrence, aggregate and products and completed operations. The numbers in the contract go next to these.
- Commercial auto
- The vehicles the business owns, hires and borrows, when a commercial auto policy is in place.
- Workers compensation
- Shown when the business carries it. On public work the contract will expect this row to be filled in.
- Policy dates
- Effective and expiration dates for each policy. A certificate expires with the policy, so a renewal means a new certificate.
- Description of operations
- Where additional insured, waiver of subrogation and primary and noncontributory appear. Each is an endorsement with its own wording and cost, and each should match the contract before you quote the job.
- Certificate holder
- The customer, general contractor or city asking for proof. Being the holder gets them a copy of the certificate and nothing more.
Do my subcontractors need their own insurance?
Yes, and you should ask for proof. When you hire a subcontractor who carries no insurance, their claims can land on your policy and their payroll can be added to your premium at audit. Get a certificate from every subcontractor before they start, keep it on file, and expect the general contractor above you to ask you for the same.
Paying a crew on a 1099 does not settle who counts as an employee for insurance. A general liability audit and a workers compensation audit both look at the work performed and how much control you have over it, not the tax form. If you use 1099 labor, say so at the quote so the policy is rated correctly and the year-end audit holds no surprises.
Whether to carry workers compensation at all is a real decision in Texas. A non-subscriber gives up certain legal defenses if an employee is hurt, and many general contractors and public owners will not let an uncovered crew on site. The Texas Department of Insurance explains what a non-subscriber has to file and post, and that is worth reading before you decide.
What insurance does a general contractor need in Texas?
A general contractor answers for more than its own crew. Whether you remodel homes, build custom houses, finish out commercial space or put up barns and shops, the owner's contract usually puts the whole job on you: your employees, the subcontractors you hire, and often the building and materials until the owner takes it over. General contractor insurance in Texas starts with the general liability, commercial auto and workers compensation any trade carries, then adds what the contract and the job call for.
Builders risk
Covers the building and materials while the work goes up, for losses like fire and theft. It is not liability insurance, and the contract usually says whether you or the owner buys it.
Higher limits
A contract can ask for more general contractor liability insurance than the base policies carry. An umbrella policy adds limits above general liability, commercial auto and employer's liability.
Pick a topic
City permit rules
Many Texas cities set their own, and they differ. Houston does not register general contractors.
San Antonio asks a residential builder for a certificate showing the city as certificate holder, with at least $500,000 per occurrence, $1,000,000 in total and $500,000 for products and completed operations.
El Paso and Huntsville also ask for a certificate showing the city as holder when you register, and El Paso adds a building construction bond.
Public work
Texas Government Code Section 2253.021 requires a performance bond on a public works contract over $100,000 and a payment bond over $25,000, or over $50,000 when the owner is a city.
Labor Code Section 406.096 has you certify in writing that your employees on the project are covered by workers compensation, and each subcontractor's certificate goes to the owner through you.
Subcontractors and workers compensation
Texas law decides when a subcontractor's people count as yours for workers compensation, and the rules differ by job.
Under Labor Code Section 406.122, a subcontractor and its crew are not your employees when the subcontractor works as an independent contractor under a written agreement that says it takes on an employer's responsibilities. Without that agreement they can count as yours.
Section 406.123 treats a general contractor that carries coverage as the employer, for workers compensation, of a subcontractor who has no employees.
Sections 406.141 to 406.144 set a different rule for residential buildings and for commercial buildings that do not exceed three stories or 20,000 square feet: there an independent contractor who is paid by the job, not by the hour, with or without a crew, is not covered by your policy unless you both sign an agreement.
Which rule applies depends on the building and the agreement, so settle it in writing before the work starts. The Texas Department of Insurance publishes the agreement forms.
Indemnity clauses
Read the indemnity clause before you sign. Texas Insurance Code Chapter 151 voids construction contract terms to the extent they make you defend or pay for claims caused by the negligence, fault or breach of the other party or the people it controls, and additional insured requirements that reach that far.
An exception is a claim for the bodily injury or death of your employee or the employee of your subcontractor at any tier.
The limits do not apply to a contract for a single-family house, townhouse, duplex or related land development, or to a city's public works project, and the chapter has other exceptions.
How much does contractor insurance cost in Texas?
It depends on the work you do. Insurance companies rate contractors on the trade and its class code, payroll, how much work goes to subcontractors, the number of vehicles and how far they travel, the limits the contracts require, the years in business and the claims history. A roofer and a painter with the same revenue will not pay the same, and a crew that works in occupied homes is rated differently from one on new construction. For a general contractor, what you pay subcontractors and the size of the jobs you run weigh in alongside your own payroll.
When you compare quotes, compare the same limits, the same endorsements and the same classifications before you compare the premium. A lower price with completed operations excluded, or with a subcontractor warranty attached, is not the same policy. Our Texas office lays the quotes side by side so the differences are easy to see.
What do I need for a contractor insurance quote?
- The licenses the business holds and the trades it performs
- Last year's payroll and what you paid subcontractors
- The vehicles and trailers the business uses, and who drives them
- The contracts or certificate requests you need to satisfy
- Your current policies and their renewal dates
- The largest job you expect to take on this year
Who you'll talk to
Call and a person in our Texas office picks up, not a call center. Erin and Steven are both licensed agents: either one takes the call, reads the contract before anything is quoted and comes back with options from more than one company. Tammy stays with the policy after it starts.
- Erin FergusonPersonal, Commercial and Farm & Ranch InsuranceErin works commercial, farm and ranch and personal accounts, so a contractor who also has a farm or a home policy is one conversation.
- Steven StoverVice President / Commercial Insurance ProducerSteven spent more than 15 years adjusting catastrophe claims before this, so he reads a contract knowing what a claim looks like from the other side.
- Tammy DriskellAccount ManagerTammy stays with the account after the policy starts and handles the questions, changes and renewals that come up. She has done that work at Stover & Crouch for more than 40 years.
Common questions about contractor insurance
Do I need insurance if I only do small jobs?
Texas does not require it for most unlicensed trades, but your customers, property managers and general contractors usually will. One injury claim on a small job can cost more than years of premium, so start with general liability sized to the work you do.
Does my general liability cover my subcontractor's work?
It can respond to a claim that comes from work done on your behalf. That is why an uninsured subcontractor is your problem, and why their payroll can show up on your audit. Collect a certificate from every subcontractor before they start.
What is the difference between a certificate and a policy?
The policy is the contract that provides the coverage. The certificate is a summary that proves the policy exists. A certificate cannot add coverage or change the terms. Only an endorsement to the policy can do that.
How fast can I get a certificate of insurance?
For coverage that is already in place, our office issues certificates on request during business hours. If the request needs an endorsement first, like adding an additional insured, the insurance company has to process the change before the certificate can show it.
Do I need commercial auto for my personal truck?
If the truck is used for the business, hauls tools or materials, or is titled to the company, a personal auto policy may not respond the way you expect. Commercial auto insurance is written for the vehicles a business owns, and it can extend to the ones the business hires and borrows.
Is workers compensation required for contractors in Texas?
Not for most private employers. It is required when you work on a governmental entity's construction project, and many general contractors require it by contract. A business that goes without it is a non-subscriber and gives up certain defenses if an employee is hurt.
How much does general contractor insurance cost in Texas?
There is no single price. General liability for a general contractor is usually priced on revenue or payroll and the kind of building you do, and what you pay subcontractors often counts too. Workers compensation is priced on payroll for each kind of work, and commercial auto on each vehicle and driver. Uninsured subcontractors, new homes and additions, and contracts that call for higher limits can all raise the price. A quote built on your own jobs, payroll and subcontract costs is the number to plan around.
How long is a general contractor liable for a job in Texas?
Texas sets an outer deadline for injury and property damage lawsuits over defective or unsafe construction. Under Civil Practice and Remedies Code Section 16.009 it is generally 10 years after the work is substantially complete, and 8 years for most suits by a government entity. On a detached house, a duplex or a townhouse of up to three stories, including additions and repairs, it is 6 years if the contractor gave a written warranty of at least 1 year on workmanship and materials, 2 years on plumbing, electrical, heating and air conditioning delivery systems, and 6 years on major structural components. A written claim made before the deadline extends it, damage in the final year allows more time, and a longer written warranty, willful misconduct or fraudulent concealment is not cut off. Keep completed operations coverage in place and keep every old policy, because which one answers can depend on when the damage happened.
What is a contractor bond, and is it insurance?
A bond is a guarantee that you will complete the contract or follow a licensing rule, backed by a surety company that can recover from you if it pays. It is not insurance, and it is usually required by a project owner, a city or a licensing agency rather than chosen for your own protection.
Where these facts come from:
- TDLR, programs it licenses (opens in a new tab)
- TDLR, electrical contractors (opens in a new tab)
- TDLR, air conditioning and refrigeration contractor application (opens in a new tab)
- Texas State Board of Plumbing Examiners, Responsible Master Plumber (opens in a new tab)
- TCEQ, landscape irrigator license (opens in a new tab)
- TDI, workers compensation for employers (opens in a new tab)
- TDI, certificates of insurance (opens in a new tab)
- Texas Government Code Chapter 2253, public work bonds (opens in a new tab)
- Texas Labor Code Chapter 406, workers compensation coverage (opens in a new tab)
- Texas Insurance Code Chapter 151, construction contracts (opens in a new tab)
- Texas Civil Practice and Remedies Code Section 16.009 (opens in a new tab)
- City of San Antonio, building and home improvement contractors (opens in a new tab)
- City of Houston, permit submittal overview (opens in a new tab)
- City of El Paso, contractor registration requirements (opens in a new tab)
- City of Huntsville, contractor registration (opens in a new tab)
Read November 5 and 10, 2026. Licensing rules, statutes and city rules change, so confirm the current requirement with the agency or the city before relying on it.
Get a contractor insurance quote in Texas
Tell us the trade, the size of the crew and the jobs you take, or send the certificate request that started this. A licensed agent at our Texas office reviews what the contract asks for and compares options from more than one company. A website request does not bind, change, cancel, reinstate or confirm coverage.