Have one broker shop every policy at the same time instead of renewing them one by one. Get your job categories and payroll right before the quotes go out, because insurers price what you send them. Texas also changes the math in a way no other state does: workers comp is optional for private employers here, so your biggest line is a choice rather than a rule. Who this is for: Texas contractors and trades whose renewal went up, who have never compared quotes, or who suspect they are paying for coverage their contracts do not ask for.
The short version
- Shop the whole package through one broker. Texas insurers price the same contractor very differently, especially on workers comp.
- Fix job categories and payroll before quoting. Wrong categories are the most common reason a Texas contractor overpays.
- Buy the limits your contracts and license actually require, and reach high limits with an umbrella instead of a bigger base policy.
- Stay in the standard market when you can. Specialty insurers charge more, and Texas adds tax and filing charges on top of their premium.
Where is the money hiding in a Texas contractor's insurance bill?
Most Texas contractors carry four policies. Each has one or two levers that move the price. The amounts below are national illustrative figures for a mid-size remodeler, not Texas rates. Your trade, payroll, sales, claims history, and insurer set your own numbers.
| Policy | Illustrative national yearly cost | Biggest lever in Texas | Illustrative saving |
|---|---|---|---|
| General liability | $7,500 | Correct trade category and accurate sales; collect certificates from subs so their cost is not charged to you | $800 to $2,000 |
| Workers comp | $28,000 | Shop three insurers; move office staff to the clerical category; get sub agreements on the state forms | $4,000 to $9,000 |
| Commercial auto | $9,000 | Driver list cleanup, higher physical damage deductible, correct radius | $1,000 to $2,500 |
| Umbrella | $2,200 | Buy it from the same insurer as your general liability; keep underlying limits at the insurer's minimum | $300 to $800 |
Workers comp is the largest line and the one with the widest spread between insurers. Most Texas insurers start from the same published base numbers and mark them up their own way, and some file their own numbers instead, so the same crew can be quoted thousands apart. That is why workers comp is where shopping pays most. Detail at how to find cheaper workers comp insurance in Texas.
What does Texas actually require me to carry?
Less than most states do. Most states make you carry workers comp; Texas does not, and it has no statewide general contractor license. Most of your limits come from your contracts, not the law.
| Coverage | Texas legal minimum | What contracts usually ask for |
|---|---|---|
| General liability | None for most trades. Electrical contractors: $300,000 per incident, $600,000 per year, $300,000 for completed work. Class A air conditioning contractor the same. Class B air conditioning contractor: $100,000, $200,000, $100,000. Responsible Master Plumber: $300,000. | $1,000,000 per incident and $2,000,000 per year |
| Workers comp | Optional for private employers. Required for every worker on a building or construction contract for the state, a city, a county, or a school district. | Required by most general contractors, usually with employers liability at $1,000,000 each accident, $1,000,000 disease policy limit, and $1,000,000 each employee for disease. Contracts write it as three limits, so check all three on your policy |
| Auto liability | 30/60/25: $30,000 per injured person, $60,000 per accident, $25,000 property damage | $1,000,000 combined single limit |
| Umbrella | None | $1,000,000 to $5,000,000 |
Texas has no statewide general contractor or roofing license, so there is no license minimum for those trades at all. License detail is at contractor license insurance requirements in Texas, and the national checklist is at how to find cheaper contractor insurance.
Should I drop workers comp to save money in Texas?
For a contractor, almost never. Workers comp is elective in Texas: private employers may choose whether to buy it, at any headcount. An employer that goes without is a non-subscriber, has to file DWC Form-005 with the state and post the state's notice for employees, and gives up the legal defenses an employer normally has. If an employee sues, you cannot argue that the worker was careless, that he knew the job was risky, or that a coworker caused it. A non-subscriber also cannot work on public building projects and will be turned away by most general contractors. The premium you save is small next to one serious injury lawsuit with no defenses. Shop the policy instead of dropping it. See do I need workers comp in Texas.
How do I stay out of the expensive specialty market?
Surplus lines insurers are specialty insurance companies that write what standard ones will not. In Texas their policies carry about 4.9 percent in tax and filing charges, and the premium itself usually runs higher. Roofing and demolition often land there. Many other contractors end up there only because the application was thin or went to the wrong insurer. Three things keep you in the standard market:
- A complete application. Five years of loss runs (your claims history report), a clear description of the work, and the share you sub out.
- The right insurers. Every insurer has an appetite, the kinds of businesses it actually wants. A broker who knows which Texas insurers want your trade skips the ones that will decline or overprice you.
- A clean claims story. Close small claims fast, and explain any large one in writing before the insurer asks.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A remodeling contractor in Austin with eight employees renews four policies with the same agent every year. The total is about $46,700, illustrative: general liability $7,500, workers comp $28,000, auto $9,000, and a $1,000,000 umbrella at $2,200.
What went wrong: Nobody has compared quotes in five years. The office manager is rated as a carpenter, two former employees are still on the driver list, and $120,000 paid to subs without certificates was added at the last workers comp audit.
What it cost: A broker shopped the package. Workers comp came back at $21,500 with the office manager moved to the office category and the sub agreements signed, auto at $7,400 after the driver list was fixed, general liability at $6,800 on the same limits, and the umbrella at $1,900 from the general liability insurer. About $9,100 less for the same coverage.
The fix: The coverage did not change. The categories, the paperwork, and the number of insurers looking at the account did. Do that review every two or three years.
Frequently asked questions
Q: How can I find cheaper contractor insurance in Texas?
Have one independent broker shop all your policies across many insurers at once, with job categories and payroll checked first. Buy only the limits your contracts and license require, reach high limits with an umbrella, and stay in the standard market when you can.
Q: Why is my workers comp the biggest part of the bill in Texas?
Because it is priced on your whole field payroll at trade rates, and each Texas insurer marks up the published base numbers its own way. That also makes it the line with the most room to move.
Q: Does Texas require me to carry general liability?
Not for most trades. Electrical contractors, air conditioning contractors, and Responsible Master Plumbers have license minimums; there is no statewide general contractor or roofing license, so for those trades every limit comes from your contracts.
Q: Can I save money by going without workers comp in Texas?
Legally most private employers can, but a contractor rarely should: you give up your main defenses if an employee sues, you cannot work on a public building project, and most general contractors will turn you away. Shop the policy instead of dropping it.
Q: How do I know my job categories are right?
Ask your broker for the written description behind each job category on your workers comp policy, then read it against what each person actually does all day. An office worker who also loads trucks or supervises a crew does not qualify for the office category, and a wrong category is the most common reason a Texas contractor overpays.
Q: How often should I shop my contractor insurance in Texas?
Compare quotes every two or three years, and any year your payroll, trade mix, or claims change a lot. Shopping every single year can make insurers less eager to quote you.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Shopping a Texas contractor's whole insurance package across many insurers, with categories and contracts checked first, is what we do most.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.