As a contractor in Texas, understanding your insurance requirements and options is essential for protecting your business and meeting state regulations. Our analysis of actual quotes from leading carriers provides detailed insights into insurance costs and coverage options for Texas contractors.

Reinforce your business with our guide to general construction contractor insurance.

General Liability Insurance for Texas Contractors

General liability insurance protects your contracting business from third-party claims of property damage and bodily injury. Based on our analysis of over 800 contractor quotes, here are the typical costs for Texas contractors:

Revenue SizeAverage Premium% of RevenueFavorable RatePotential Savings
$500K$9,6801.9%$4,01059%
$1M$15,5901.6%$8,02049%
$2.5M$47,2901.9%$26,51044%

These premiums assume:

  • Clean claims history (5+ years without incidents)
  • Standard $1M/$2M coverage limits
  • Typical mix of residential and commercial work
  • Approximately 10% subcontractor costs

Worker’s Compensation Insurance for Texas Contractors

While Texas is unique in that workers’ compensation insurance is not mandatory, many contractors choose to carry it for protection and to secure contracts. Based on our analysis, Texas contractors typically pay around $1,854 per employee annually for workers’ compensation coverage, one of the lowest rates in the country.

For Texas contractors, typical workers’ compensation costs per $100,000 of payroll average $4,390, making it one of the five least expensive states for workers’ compensation insurance.

Common contractor classification codes and their approximate rates in Texas:

  • Code 5606 (Project Manager/Supervisor): $2-4 per $100 of payroll
  • Code 5645 (Residential Construction): $7-10 per $100 of payroll
  • Code 5403 (Commercial/Large Projects): $10-15 per $100 of payroll

Additional Business Insurance for Contractors in Texas

1. Commercial Auto Insurance

  • Typical cost: $1,000-$4,000 per vehicle annually
  • Required for business-owned vehicles
  • Higher limits often needed for larger contractors

2. Tools & Equipment Coverage

  • Cost: $1,500-$5,000+ annually for $15k-$50k coverage
  • Protects both owned and rented equipment
  • Coverage follows equipment to all jobsites

3. Commercial Property Insurance

  • Protects offices, storage facilities, and workshops
  • Annual premiums: $2,000-$20,000+ based on property value
  • Coverage for fire, theft, vandalism, and natural disasters

4. Builder’s Risk Insurance

  • Premium: 0.15-0.75% of project value
  • Covers projects under construction
  • Protection against fire, weather, vandalism

5. Contractor License Bonds

  • Premium varies based on credit and experience
  • Requirements vary by municipality
  • Typical cost: 1-3% of bond amount

Get Texas Contractor Liability with ContractorNerd

ContractorNerd simplifies the insurance process for Texas contractors through:

  • Instant online quotes from top-rated carriers
  • Side-by-side coverage comparisons
  • Texas-specific expertise and guidance
  • Streamlined application process
  • Ongoing policy management support
  • Claims advocacy when needed

Our team of contractor insurance specialists helps you:

  • Optimize coverage levels based on your specific risks
  • Find competitive rates through our carrier network
  • Bundle policies for additional savings
  • Ensure compliance with state regulations and contract requirements

Contact ContractorNerd today for customized quotes and expert guidance on your contractor insurance needs.