Contractor Insurance Requirements in Texas

Texas has no statewide general-contractor license and no universal GL minimum for ordinary residential GCs. The statewide minimums appear in licensed specialty trades: TDLR electrical contractors must maintain at least $300,000 per occurrence, $600,000 aggregate and $300,000 completed-operations aggregate; air-conditioning and refrigeration contractors have TDLR class-based liability requirements. The citation trail is Tex. Occ. Code §§ 1302.252, 1305.151; 16 Tex. Admin. Code §§ 73.40, 75.40. Treat the quoted number, when one exists, as a licensing floor rather than a safe project limit. A homeowner should request a current Certificate of Insurance showing the exact legal name, policy number, effective dates, occurrence and aggregate limits, products/completed operations, and any additional-insured wording required by the contract or permit office. Where Texas does not publish a statewide GL minimum, ProFix describes market ranges only as verification guidance, not as law. Roof, structural, excavation, mold, fire, solar and multi-trade projects should usually be reviewed for umbrella or excess liability because standard GL can contain residential, roofing, pollution, subsidence or subcontractor exclusions.

Texas is unusual because most private employers are not required to subscribe to workers' compensation. A residential contractor can legally be a non-subscriber, but public projects, owner contracts, prime-contractor agreements and some municipal registrations can require coverage or proof of non-subscriber status. Cite Tex. Labor Code §§ 406.002, 406.004. Coverage is placed with private carriers, Texas Mutual or approved self-insurance groups. If a contractor is a non-subscriber, homeowners should understand that the absence of WC can shift injury disputes into ordinary litigation. For residential hiring, the key question is not only whether the contractor has a policy, but whether the people entering the home are covered by that policy. Ask whether subcontractors are employees, independent businesses with their own WC, or excluded owners. If the contractor says it is exempt, request the state exemption form or written statutory basis and keep it with the contract file. A GL policy does not pay statutory wage-loss and medical benefits for an injured worker, and an occupational accident policy is not always a substitute for workers' compensation.

There is no statewide Texas GC license bond. Bonds are local or project-specific, such as city contractor registration bonds, utility/right-of-way bonds, and bid, performance or payment bonds. Specialty licenses rely more on insurance certificates than a single state bond. The legal anchor is Tex. Gov't Code Chapter 2253; Tex. Occ. Code Chapters 1302, 1305. A license bond is not the same thing as liability insurance: it is a surety promise that may reimburse a claimant only after a covered violation, and the surety normally seeks reimbursement from the contractor. It also is not always a performance bond guaranteeing completion of one homeowner's project. For residential work, ask who the obligee is, the bond amount, the effective dates, cancellation notice, and whether the bond is tied to the state license, a city registration, a right-of-way permit or a specific contract. For public or large commercial work, separate bid, performance and payment bonds can be required even when no residential license bond exists.

For residential remodeling, Texas compliance starts with the city permit office and the licensed trade doing the work. Commercial projects add tenant-improvement permits, fire code approvals, higher contractual GL limits and public-bond rules when public funds are involved. For insurance review, residential work should be tested against the homeowner contract, permit office, lender, HOA or condo requirements, and the license classification. Commercial work usually scales faster because leases, architects, public owners and general contractors often require additional insured status, waiver of subrogation, primary-and-noncontributory wording, higher auto limits and umbrella coverage. A contractor who is legal for a small repair may still be underinsured for a structural addition, roof replacement, fire restoration or job involving subcontractors.

Electrical, plumbing, air-conditioning/refrigeration, elevators, fire alarm and some water-well work are state-regulated even though general contracting is local. Mold assessment and remediation are separately regulated by the Texas Department of Licensing and Regulation, and lead/asbestos work has additional state and federal rules. Federal overlays still matter in every state: renovation of pre-1978 painted surfaces can require EPA Renovation, Repair and Painting compliance under 40 C.F.R. Part 745, and asbestos disturbance can trigger OSHA construction asbestos rules at 29 C.F.R. § 1926.1101 plus state notification or licensing. Specialty insurance should match the hazard. Ask about professional liability for design-build advice, pollution or microbial coverage for mold and sewage, rigging/crane coverage for HVAC rooftop units, and hot-work controls for welding or torch-down roofing. A general liability COI with a low premium can be misleading if the trade that caused the loss is excluded.

Verify specialty licenses in TDLR or the Texas State Board of Plumbing Examiners, then compare the legal name to the COI. For general contractors, verify the city registration and permit history. The Texas Department of Insurance can help validate insurer authority, but policy status should be checked with the issuing agent. Use three documents together: the state or local license record, the COI, and the bond or workers' compensation proof. The license board URL for Texas is https://www.tdlr.texas.gov/, and the insurance regulator URL is https://www.tdi.texas.gov/. Match the business name, DBA, address and license number across all documents; mismatches are the fastest way to spot borrowed insurance or an unlicensed subcontractor. Call the producer listed on the COI, not a phone number supplied only in a text message. For larger residential jobs, require updated certificates before each draw and before final payment. This is an insurance-compliance checklist, not legal advice, and the local permit office can impose stricter conditions than the statewide baseline.