Texas contractor insurance requirements

Workers' comp in Texas

Texas private employers can choose whether to carry workers' comp. Employers without it (non-subscribers) must tell their employees and file a notice with the state. On building and construction projects for a government entity, every contractor has to carry workers' comp for its people on the project.

The agency in charge is the Texas Department of Insurance, Division of Workers' Compensation. It can tell you whether a specific business needs coverage, and most states let you look up an employer's policy online.

Contractor licensing and insurance

We found no statewide general liability minimum tied to a general contractor license. Texas has no statewide general contractor license. Cities and counties can set their own licensing and insurance rules, so check where the project is.

Indemnity and additional insured clauses

Texas Insurance Code chapter 151 voids construction clauses that make a contractor indemnify another party for that party's own negligence, with exceptions that include claims for injury to the contractor's own employees. It also voids additional insured requirements that would give the other party coverage it couldn't get through indemnity.

Government construction projects run on certificates of coverage

Texas Labor Code § 406.096 and 28 Tex. Admin. Code § 110.110 require each contractor on a public building or construction project to give the government entity a certificate of workers' comp coverage before starting work, collect one from every company working under it before that company starts, pass along renewals, and post a coverage notice at the site. A contractor's non-subscriber status doesn't carry over to these jobs.

What to check on a contractor COI for a Texas project

1. Workers' comp. Texas doesn't make most private contractors carry it on private work, so your project requirements decide. If you require it, check that the COI shows workers' comp and employers liability limits. For an out-of-state contractor, confirm Texas is listed on the workers' comp policy.
2. General liability. Texas doesn't set a statewide floor for a general contractor license, so your project requirements set the bar. Compare each limit on the COI with what the contract asks for.
3. Additional insured. In Texas, the anti-indemnity statute also limits what an additional insured requirement can do. Ask your broker or attorney which wording holds up, then check that the endorsement on file matches it.
4. Dates. Every policy should run through the end of the job. A COI only shows coverage on the day it was issued, so check again at each renewal.

Forsured checks every contractor COI against your project requirements, then keeps checking for the life of the project. Send us one project's requirements and a contractor COI or two for a free COI risk check.