For a Texas contractor license, the insurance you need is usually general liability, not workers compensation. Texas has no statewide general contractor or home-builder license, and the trade licenses that do exist, such as electrical and air-conditioning, require liability coverage rather than comp. Workers comp stays elective, with one clear exception: any contractor on a government building or construction contract must carry it for every worker on the project.
Who this is for: Texas contractors and tradespeople sorting out which insurance their license requires, and whether workers comp is part of it.
The short version
- Texas has no statewide general contractor, home-builder, or remodeler license; general construction is handled by city or county rules.
- State licenses exist only for specific trades, such as electrical, air-conditioning and refrigeration, elevator, and boiler, plus plumbing under its own board.
- Those trade licenses require general liability insurance, not workers comp.
- An electrical contractor license, for example, requires general liability at set minimum limits from a qualified carrier.
- Workers comp is not a license condition, except that any government construction contract requires it for all workers.
Which licenses exist in Texas
Unlike many states, Texas does not license general contractors at the state level. If you build or remodel, any registration you need usually comes from your city or county, through permitting rather than a statewide license. The state does license specific trades. The Texas Department of Licensing and Regulation licenses electrical and electrical-sign contractors, air-conditioning and refrigeration contractors, elevator, boiler, and similar trades, while plumbers are licensed by the state plumbing board. If you are in one of those trades, the license comes with an insurance requirement, but it is a liability requirement.
What the license actually requires
| License | Insurance the license requires | Is workers comp required? |
|---|---|---|
| Statewide general contractor | No statewide license exists; check city or county | No, unless on a government contract |
| Electrical contractor (state) | General liability at set minimum limits | No, comp is not a license condition |
| Air-conditioning and refrigeration (state) | General liability coverage | No, comp is not a license condition |
| Any contractor on a government building or construction contract | Coverage for every worker on the project | Yes, comp is required for that work |
Liability limits, not comp
Take the electrical contractor license as the clearest example. To hold it, the business must carry commercial general liability of at least 300,000 dollars per occurrence for combined bodily injury and property damage, with a 600,000-dollar aggregate and a 300,000-dollar products and completed-operations aggregate, from an admitted or eligible surplus-lines carrier rated highly enough by the rating agencies. Those are liability numbers, which protect other people and their property, and they are separate from workers comp, which covers your own workers' injuries. Meeting the license does not mean you have comp, and carrying comp does not meet the license.
An electrician example
Illustrative, not a quote. A McAllen electrician applies for a state electrical contractor license and thinks he needs workers comp to get it. In fact the license requires general liability at set minimum limits, not comp. He carries the required liability coverage and gets licensed. Later he bids a city facility upgrade, a government construction contract, which does require workers comp for every worker on the job. He adds a comp policy for that project, and we make sure both his liability limits meet the license and his comp is in place for the public work.
Real questions Texas owners ask
What insurance does a Texas contractor license require?
Usually general liability, not workers comp. Texas has no statewide general contractor license, and the trade licenses that exist, such as electrical and air-conditioning, require liability coverage rather than comp.
Do I need a statewide contractor license in Texas?
No. Texas does not license general contractors, home builders, or remodelers at the state level. Any registration you need generally comes from your city or county through permitting, not a statewide license.
Do I need workers comp to get a trade license in Texas?
No. Workers comp is not a condition of a Texas trade license, consistent with the elective rule. The exception is that any contractor on a government construction contract must carry comp for every worker.
What does an electrical contractor license require?
It requires commercial general liability at set minimum limits, such as 300,000 dollars per occurrence with a 600,000-dollar aggregate, from a qualified carrier. That is liability coverage, not workers comp.
Is general liability the same as workers comp?
No. General liability covers harm to other people and their property, while workers comp covers your own workers' on-the-job injuries. A license may require liability, and a contract may separately require comp.
When is workers comp required for a Texas contractor?
When you work on a government building or construction contract. In that case you must certify that every worker on the public project is covered, even though comp is otherwise optional in Texas.
Which trades does Texas license at the state level?
Texas licenses specific trades such as electrical and electrical-sign, air-conditioning and refrigeration, elevator, and boiler contractors, plus plumbers under the state plumbing board. General construction is left to local rules.
Why Texas owners choose Morrow
- We shop the right market for you. Texas is the only state where workers' comp is optional for private employers, so Morrow helps you decide whether to subscribe or go without coverage, and places coverage fast through the competitive private market (or Texas Mutual, the insurer of last resort) when a client or public contract requires it.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Texas guides
Every Texas business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Texas (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do I need workers comp for 1099 contractors?
- What workers comp does not cover
- Texas electrician workers comp
This guide is general information, not legal advice. Texas rules and penalty amounts can change, so verify current requirements with Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) or a licensed advisor before you rely on them. Last updated: July 2026.