Texas Contractor License & Insurance Requirements (Trade & City Rules)

Texas has no statewide general-contractor license

Unlike California, Florida, or Arizona, Texas does not license or examine general contractors at the state level. There is no statewide GC license, no state GC exam, and no state GC bond. Anyone, including a homeowner, can act as a general contractor in Texas.

That surprises people, and it leads to a dangerous assumption: that Texas contractors do not need insurance. That is wrong. Regulation in Texas is a patchwork with two parts, and both carry insurance requirements:

• Trade licenses. The state licenses specific trades, electricians and HVAC through TDLR, plumbers through the TSBPE, and each carries a general liability minimum.
• City registration. To pull a building permit, Texas cities require you to register and show proof of insurance first.

So “no state license” does not mean “no insurance.” It means the requirements come from your trade board and your city, not from one statewide contractor license.

State-licensed trades and their insurance minimums

Texas does license, and insure, three trades relevant to most contractors. These minimums are set by regulation and attach to the business (contractor) license, not the individual worker’s license.

Two accuracy notes. For electricians and HVAC, the requirement sits on the contractor (business) license, so an individual journeyman or master electrician working under a licensed contractor is not the one who files it. For plumbers, the requirement sits on the Responsible Master Plumber the business operates under.

City registration and insurance (the patchwork)

Here is the rule that catches general contractors, who have no state license at all: in most Texas cities you cannot pull a building permit until you register with the city and show proof of insurance. Registration is not a license or an exam; it is an enrollment plus insurance-on-file step. Minimums and fees vary by city.

San Antonio (verified)

To register as a Home Improvement Contractor, San Antonio’s Development Services Department requires a certificate of general liability insurance of at least $300,000 per occurrence, $600,000 aggregate, and $300,000 products and completed operations, naming the City of San Antonio as certificate holder (Code of Ordinances Chapter 10-115).

Houston, Austin, Dallas, Fort Worth

Each requires contractor registration and proof of general liability before permits:

• Houston requires registration and proof of general liability to pull building permits.
• Austin requires registration (free for general contractors) through the Austin Build and Connect portal before any permitted work; trade contractors register with a valid state trade license.
• Dallas runs a Contractor Registration Program: register, show general liability with the City named as certificate holder, and pay the registration fee before pulling permits.
• Fort Worth requires registration and a commercial general liability policy that names the City as an additional insured, with 30 days’ notice of cancellation.

Exact dollar minimums and fees change and vary by permit type, so confirm the current figure on your city’s contractor-registration page before you buy. The safe planning number for most Texas city and trade requirements is $300,000 or more per occurrence, though most contractors carry the $1 million per occurrence a general contractor will ask for anyway.

Workers’ comp: optional, except on public projects

Texas is the only state where private-sector workers’ compensation is optional, the “non-subscriber” system. A private Texas contractor is generally not required to carry it. The exception is government and public construction projects: under Texas Labor Code §406.096, the contractor and its subs must certify workers’ comp coverage for everyone on the job. Many private general contractors also require it by contract, so “optional by law” is not “optional in practice.” We cover this in depth in our Texas non-subscriber workers’ comp guide.

What a Texas general contractor requires of subs

Because the state will not police it, the contract does. A typical Texas general contractor requires each subcontractor to carry and prove:

• Commercial general liability, commonly $1 million per occurrence / $2 million aggregate on commercial jobs.
• Workers’ comp or employer’s liability, even though state law makes workers’ comp optional off public jobs.
• Additional insured status for the general contractor, often with a waiver of subrogation and primary and noncontributory wording.
• A certificate of insurance proving all of it before the sub starts.

For the full breakdown of what a GC asks subs to carry, see our subcontractor insurance requirements guide.

Key takeaways

• Texas has no statewide general-contractor license, exam, or bond.
• But the state does license and insure specific trades: electricians and HVAC ($300,000 per occurrence for Class A) through TDLR, and master plumbers ($300,000 GL) through the TSBPE.
• Cities require registration plus proof of insurance to pull permits; San Antonio’s verified Home Improvement minimum is $300,000 per occurrence / $600,000 aggregate.
• Workers’ comp is optional except on public projects (Texas Labor Code §406.096).
• On real jobs, general contractors require subs to carry GL (often $1M/$2M), additional insured, and a COI, whatever the state does or does not mandate.

Frequently asked questions

Sources

• 16 Texas Administrative Code §73.40 (electrical contractor insurance minimums)
• TDLR Form ACR009 and Texas Occupations Code Chapter 1302 (HVAC/ACR contractor insurance)
• Texas State Board of Plumbing Examiners, Responsible Master Plumber requirements
• City of San Antonio Development Services, Home Improvement Contractor Registration (Chapter 10-115)
• City of Austin, Dallas, Fort Worth, and Houston contractor-registration and permitting pages
• Texas Labor Code §406.096 (workers’ comp on public projects)