Contractor’s Insurance for Texas
Running a contracting business in Texas is incredibly rewarding, whether you are self-employed or operate a crew of 20 employees. Protecting your business from risks whether required by the government or recommended by your insurance agent, is key to growth and future profits.
Contractor businesses are unique from retail stores and traditional businesses and can include:
Plumbers, Electricians, HVAC Technicians, Architects, General Contractors, Engineering Firms, Solar Installers, Carpenters, Roofers, Cleaners, Landscapers, Remodelers, Painters, Handyman and more.
Many small contractors operate out of the home and may not require commercial property insurance. Instead, contractors typically perform work at the customer’s location. This can be a residential home, a construction site or a commercial property. There are many risks and potential lawsuits that can happen at a job site or office headquarters. General Liability Insurance provides broad protection for contractors.
A construction site for a new building is exposed to a variety of hazards including natural disasters, theft, vandalism and more. These risks are covered by a Course of Construction/Builder’s Risk Insurance.
Contractors also rely on special tools and equipment that can fail, become damaged or even stolen on the job. This equipment can be owned or leased, and requires a special Contractor’s Equipment Policy.
Contractors are more likely to receive an injury while working or traveling than other businesses and those injuries can affect employment. Let’s not forget about the unrelenting Texas heat which can also lead to the hospital. These risks are covered by Worker’s Compensation Insurance.
Many contractors rely on a commercial vehicle for transport, which exposes the business to vehicle accidents and other liabilities. This risk is covered by a Commercial Auto Policy.
Protecting a Business with Contractors Insurance
Contractor’s insurance combines separate policies (worker’s compensation, general/umbrella liability, bonds and commercial auto insurance) into a business owner’s policy, customized for contractors.
Hettler Insurance Agency is licensed to sell contractor’s insurance for contractor’s of all sizes. We can build standard policies with optional coverage available, including:
- Vehicles rented from others or owned by employees causing property and bodily injury
- Tools rented or leased and damaged
- Coverage for building materials and equipment that travel
- Replacement coverage for tools and equipment
What Insurance is Required for a Contractor?
General Liability Insurance
Texas prides itself on having a free market, although several trades are licensed by the state with insurance requirements.
An Electrical Contractor, Electrical Sign Contractor, Residential Appliance Installation Contractor and Air Conditioning and Refrigeration Contractors (Class A) are required to maintain in business liability insurance:
(1) Minimum $300,000 per occurrence (combined for property damage and bodily injury);
(2) Minimum $600,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage); and
(3) Minimum $300,000 aggregate for products and completed operations.
There are many more contractor trades that aren’t licensed by the state including: remodelers, roofers, general contractors and builders.
Counties and cities where your business performs work are likely to require general liability insurance or surety bonds as an alternative. To be a general contractor/builder in Lubbock requires registration and a minimum of $100,000 in liability insurance coverage.
Commercial Auto Insurance
Auto insurance is required in Texas, although whether a vehicle needs a commercial or personal policy can be difficult to determine. If the vehicle is registered/owned by the business, driven by employees or used for business frequently, a commercial auto policy is required by law. Learn more about commercial auto insurance.
Worker’s Compensation Insurance
Worker’s Compensation is not required by Texas, but optional. However, the risk of an employee or even owner getting injured on the job is too high to forgo insurance. If your firm works as a subcontractor, you may be required to offer worker’s compensation, as the general contractor can’t cover injuries of your employees. Working on government contracts, will also require worker’s compensation.
Lenders will often require adequate insurance coverage before approving building financing and other projects.
Regardless of whether Texas or your city requires insurance, your customer could require general liability and other specialty forms of coverage. Adequate contractor’s insurance can help your firm stand out against other bids, allow you to join industry associations and win awards!