Texas Contractor Insurance Requirements
Texas is the only state where workers' compensation insurance is not mandatory for private employers — a system known as 'non-subscriber' status. However, non-subscriber employers lose key legal protections and face unlimited negligence liability from employee lawsuits. Most Texas commercial property managers require contractors to either carry WC or sign a specific non-subscriber acknowledgment. General liability limits and additional insured requirements are set by contract rather than state law.
Texas COI Requirements at a Glance
The following table summarizes the minimum insurance requirements for contractors operating in Texas. Commercial property managers often require limits above state minimums.
| Coverage Type | Minimum / Status |
|---|---|
| General Liability (per occurrence) | $500,000 |
| General Liability (aggregate) | $1,000,000 |
| Workers' Compensation | Voluntary Not required (voluntary) |
| Umbrella / Excess Liability | Commonly Required on Large Projects Common minimum: $1,000,000 |
| Additional Insured Endorsement | Commonly Required |
| Waiver of Subrogation | Commonly Required |
Coverage Notes
GL: No statewide GL minimum. Texas Dept. of Licensing and Regulation sets minimums for licensed trades. Dallas, Houston, and Austin commercial projects typically require $1M/$2M.
WC: Texas Labor Code § 406.002 makes WC purely voluntary for private employers. Non-subscriber employers cannot use the 'exclusive remedy' defense and face full tort liability. Some public construction contracts still require WC. Many property managers require WC or a non-subscriber affidavit.
Umbrella: Required on larger commercial projects in major Texas metros. Energy sector contracts often require $2M–$5M excess.
Additional Insured: Standard in all Texas commercial property management. Texas Anti-Indemnity Act limits certain indemnification clauses.
Waiver of Subrogation: Standard on Texas commercial construction contracts.
Texas-Specific Laws & Regulations
These laws directly affect how contractor insurance requirements are structured in Texas. Property managers should be familiar with these statutes when reviewing vendor COIs.
Texas Labor Code § 406.002 (WC Optional System)
Texas is the only state where workers' compensation is not mandatory for private employers. Non-subscriber employers lose the exclusive remedy defense and face full employee lawsuit liability. Most savvy property managers require WC or a specific non-subscriber disclosure.
Texas Anti-Indemnity Act (Texas Ins. Code § 151.101)
Prohibits indemnification provisions in construction contracts that require a party to indemnify another for the other party's own negligence. Also prohibits requiring additional insured status for the indemnitee's own negligence.
Texas COI Frequently Asked Questions
Common questions from property managers and contractors about insurance requirements in Texas.
Do contractors in Texas need workers' compensation?
Texas is the only state where workers' compensation is not required for private employers. Contractors can operate as 'non-subscribers' without WC. However, non-subscribers lose the exclusive remedy defense and face unlimited tort liability from employee injury lawsuits. Property managers should require WC or a signed non-subscriber acknowledgment from all Texas vendors.
What does Texas 'non-subscriber' status mean on a COI?
A Texas non-subscriber contractor does not carry workers' compensation insurance. While this is legal in Texas, it means the contractor's employees can sue for injuries without WC's limitations. As a property owner, you may face increased liability exposure if a non-subscriber contractor's employee is injured on your property.
What are the minimum insurance requirements for Texas contractors?
Texas has no statewide GL minimum for most contractors. Dallas, Houston, and Austin commercial property managers typically require $1M/$2M GL. Workers' compensation should be required or a non-subscriber acknowledgment obtained. Additional insured and waiver of subrogation are standard.
What is the Texas Anti-Indemnity Act?
The Texas Anti-Indemnity Act (Texas Ins. Code § 151.101) prohibits construction contracts from requiring a party to indemnify another for that other party's own negligence. It also limits certain additional insured requirements. Texas property managers and their attorneys should review indemnification clauses for compliance.
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