Texas Contractor Insurance Requirements

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Texas contractors sit at the center of a large commercial and residential building market, but the state does not run a single California-style general contractor license for every trade. Instead, trade-specific boards such as the Texas Department of Licensing and Regulation (TDLR) license air conditioning and refrigeration contractors and electrical contractors, while cities and counties often add local registration, bonding, and insurance rules. That patchwork is why owners, general contractors, and public entities lean hard on certificates of insurance before a crew mobilizes.

Lions & Coventry Insurance Services (est. 2009; Bobby Uppal, CEO since 1998) is licensed in all 50 states and places commercial contractor coverage — general liability, workers’ compensation where needed, commercial auto, inland marine, and surety support — without writing personal home or auto policies. This page summarizes the Texas rules that most often show up in underwriting and certificate reviews, with links to the official sources we checked in Nov 2026.

Related: Construction insurance · Contractors insurance · COI checklist

How Texas licenses contractors (trade boards, not one GC board)

Unlike states with a single contractor registrar, Texas spreads licensing across agencies. TDLR licenses air conditioning and refrigeration (ACR) contractors and electrical contractors, among other programs. Municipal building departments may still require local registration even when a trade is state-licensed. Always confirm the board that governs the work you bid, then confirm city or county overlays for the jobsites you enter.

For ACR contractors, TDLR states that after you pass the exam you must submit a certificate of insurance and maintain commercial general liability while the license is active. Class A minimums published by TDLR are $300,000 per occurrence, $600,000 aggregate, and $300,000 products and completed operations aggregate; Class B minimums are $100,000 / $200,000 / $100,000. Coverage must come from a provider authorized to sell liability insurance in Texas. Electrical contractor applications likewise call for liability insurance at stated minimums and for workers’ compensation proof, a self-insurance certificate, or a documented election not to obtain coverage under Labor Code Chapter 406.

Workers’ compensation: optional for many private employers, required on public work

The Texas Department of Insurance (TDI) explains that Texas does not require most private employers to carry workers’ compensation. Employers who do carry it gain strong protections against many employee injury lawsuits; nonsubscribers lose those defenses and must post notices and file annual notices with the Division of Workers’ Compensation. Private employers who contract with government entities must provide workers’ compensation for employees on that public project. Many general contractors also flow down workers’ compensation and additional-insured requirements to subcontractors even when the Labor Code would allow a nonsubscriber election.

If you elect not to carry coverage where a TDLR application allows that election, TDLR points you to TDI’s Employer E-File notice process. Buying a policy that is not from a Texas-licensed carrier does not count as workers’ compensation under state law, according to TDI’s consumer guide.

Bonds, bid packages, and certificates of insurance

License and permit bonds, payment bonds, and performance bonds are separate from liability insurance. TDI maintains commercial bond resources for license and permit bonds required by statute or ordinance. On private and public jobs alike, the certificate of insurance is the day-to-day gate: named insured matching your legal entity, additional insured endorsements when required, waiver of subrogation when required, and limits that match the subcontract. A certificate is evidence of insurance, not a policy change by itself — endorsements must actually exist on the policy.

Related reading on this site: our national construction insurance hub, contractors insurance overview, and the free COI checklist download.

What underwriters and producers ask Texas contractors

Expect questions about entity structure, years in business, trades and class codes, employee count and payroll, states and cities of work, use of subcontractors, height and hot-work exposures, prior claims, and any nonsubscriber status. Bring sample contract insurance exhibits so additional-insured and primary wording can be checked before a bid deadline.

How to get a Texas contractor insurance quote

1. Confirm your license board rules — Check the state licensing board (and any city or county overlay) for the trade you perform, including bond and insurance attestations.
2. Gather job and payroll facts — List entity name, FEIN, years in business, trades, states of work, employee count, payroll by class code, and prior losses.
3. Match certificate wording to the bid — Owners and GCs often require additional insured, primary and noncontributory wording, and waivers of subrogation on the certificate.
4. Request a commercial quote — Call (916) 967-7715 or use the contact form so a producer can shop admitted or surplus markets for your risk.
5. Keep certificates current — Ask for updated certificates before each job start and when a policy renews so jobsite access is not delayed.

Frequently asked questions