Texas general contractor license and insurance requirements

Texas general contractor license and insurance requirements

What contractors need to know about local licensing rules and insurance in the Lone Star state.

Amy Beardsley
By Amy Beardsley
Contributing Writer
Nov 14, 2024
1 min read
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Getting a general contractor license in Texas isn’t a straightforward process. While licensure for some specialty contractors is handled at the state level, general contractor licenses don’t have a statewide requirement. Instead, licenses are issued at the local level — and you might not need one at all.

Figuring out if you need a license and navigating the red tape can be confusing. Here is a guide to help you get your Texas general contractor business going.

In this article, we’ll cover:

Do you need a general contractor license in Texas?

There is no single “Texas Business License” requirement at the state level for all general contractors. However, certain cities do require business registration or licensing. The Texas Secretary of State does require registration for certain business entities (LLCs, corporations), but there’s no general contractor business license statewide.

Handypersons, builders and home improvement specialists

If you want to take the handyman, builder, or home improvement route, you’re in luck. State regulators in Texas do not require you to have a general contractor license. However, that’s just at the state level — you will need to check handyperson and home improvement contractor license requirements in your city to know if one is required.

Electricians, plumbers and HVAC technicians

You must apply for a specialized contractor license if you plan to work in any of these trades as a secondary service. Each type of license has different requirements, which the Texas Department of Licensing and Regulations determines.

Electricians license

For electricians in Texas, there are many different types of individual electrical contractor licenses. These range from Electrical Apprentice to Master Electrician to Residential Appliance Installer.

Regardless of the type of service, you will need to register with the Texas Licensing and Regulation board. Each license has minimum requirements for the number of hours of on-the-job training, as well as a passing score on the electrician exam. To get an electrical contractor license, you must pay a non-refundable $110 application fee.

Once you submit proof of your experience (if required) and your application to the licensing board, you will receive information on how to take the exam.

Plumbers license

Plumbing contractor licenses in Texas fall into four categories:

  • Tradesman plumber-limited
  • Journeyman
  • Master
  • Plumbing inspector

To obtain your license in this trade, you must meet the requirements of the Texas State Board of Plumbing Examiners, including a minimum number of hours of experience, educational courses, and a passing score on the required examination. After passing the exam, you can apply online for your license.

HVAC license

Texas has two types of HVAC contractor licenses: Class A and Class B. With a Class A license, you can work on any size HVAC unit. If you hold a Class B license, you’re limited to cooling systems of 25 tons and under and heating systems of 1.5 million BTUs/hour and under.

To qualify for either license, you must have a minimum of 48 months of practical experience or hold a technician certification for the past 12 months. You must also pass a licensing exam. To get an HVAC contractor license, it costs $115.

Which Texas cities require a general contractor license?

CityLicense/registrationInsurance/bonding

Austin

General contractor registration requiredInsurance may be required depending on the project

Dallas

Contractor registration required (renew annually)Proof of liability insurance, workers’ comp

Houston

No general contractor registration required, but need to register businessProof of insurance (liability, workers’ comp, auto) often required for permits

San Antonio

Registration with Development Services requiredCertificate of liability insurance required; bonding may be needed for some projects

 

Even though a state license is not required for all general contractors, you might need to apply for a license through your local municipality. Go to your local city and search for “general contractors licenses,” to determine the general contractor license requirement in your city.

The requirements vary by city. Here is what that might look like in bigger metropolitan areas:

Austin

If you are doing contracting work in Austin, you must register with the city through its Austin Build + Connect (AB+C) Portal Account before doing work. It’s free to register.

You may also need to obtain a project-based permit, though not all projects require a permit in Austin. Your general contractor permit application from the City of Austin Service Center and Trade Permits can ask for information such as:

  • The scope of work
  • The project address
  • Your building permit numbers
  • A detailed description of the project

Permit and review fees vary based on the project type, its size, and complexity.

Dallas

The City of Dallas requires you to apply for contractor registration based on the license type you need. General contractor work includes residential and commercial general contracting, roofing, fencing, foundation, demolition, and pool contracting.

Here’s how to apply: You’ll need to provide proof of liability insurance, a state sales tax permit and a certificate of occupancy for a physical business location in Dallas, among other things.

This registration isn’t a one-time thing. You’ll need to renew it every year. The annual registration or renewal fee is $120.

As for insurance, Dallas requires you to have general liability and workers’ compensation policies.

Houston

Houston doesn’t have a general contractor license, so you don’t need to worry about licensure requirements. However, you will need permits on a job-by-job basis. The Houston Permitting Center has a project planner to help you figure out which permit you will need.

All businesses operating in the city must obtain a Basic Business License (BBL) from the Administration & Regulatory Affairs division. There is an administrative fee of $33.10.

As part of the BBL process, contractors may be required to show proof of various insurance coverages, depending on project types and permits. These typically include general liability, workers’ compensation and commercial auto policies.

Moreover, contractors will often need special permits. Most projects require an inspection from the city for safety and code compliance.

San Antonio

For general contract work, you may need to register with the city depending on the work you perform. Generally, commercial general contractors don’t have license or registration requirements, while residential contractors do. You may need to obtain the proper permits if your work is outside of the “no permit” list.

Different types of work can require different registration application forms and license fees. For example, the home improvement contractor form (for limited repair work) is separate from the residential building contractor application (for more extensive construction work).

Both types of residential contractors will also need a certificate of liability insurance. To register as a home improvement contractor costs $150 for two years; residential building contractors can expect to pay $170 for two years.

How to get your general contractor license in Texas

Even though there isn’t a one-size-fits-all Texas general contractor license, a few similarities exist between different jurisdictions. Your first step is to determine what type of work you’ll do. If your work will include electrical, HVAC, or plumbing, you’ll need to obtain a license from the state.

You may also need to register as a business entity. Plumbing contractors are usually exempt from this requirement, but all other contractors can use the SOSDirect Business Services Portal to register their business. 

Government-issued identification and a criminal background check may also be required. Because regulations can vary by location, check with your local licensing authorities to ensure you meet the requirements in your area.

The state of Texas doesn’t require general contractor licenses, so there’s no need for renewal at the state level. If your local municipality requires you to become licensed, you’ll need to follow their renewal guidelines to keep your license up to date.

General contractor insurance requirements in Texas

Before starting your general contracting business in Texas, you will want to make sure you have met the general contractor insurance requirements. General contractor insurance costs will vary depending on factors like business size, the work you do and how many employees you have. 

General liability insurance

In most cases, general liability insurance is recommended to protect against bodily injury, property damage and defamation. Some government agencies and clients will require coverage before you start a job.

Learn more about General Liability for contractors.

Workers’ compensation insurance

Workers’ compensation insurance can help cover lost wages and medical bills when an employee gets hurt on the job. Unlike other states, Texas doesn’t require workers’ comp insurance in most cases. Some contractors might require their subcontractors to have coverage, especially if you contract with a government entity. 

Learn more about Workers’ Comp for contractors.

Tools and equipment insurance

Contractor jobs require expensive tools and equipment. If your gear is damaged or stolen, tools and equipment insurance can help pay for repairs and replacements.

Commercial auto insurance

If you have a business-owned vehicle, Texas may require you to have commercial auto insurance. Personal auto insurance policies don’t cover damages that happen when using a personal vehicle for business purposes.

Texas vehicles are required to have a minimum amount of auto liability coverage. These liability limits are $30,000 in bodily injury liability per person, $60,000 in bodily injury liability to more than one person and $25,000 in property damage per accident. (Also called 30/60/25 coverage.)

Commercial property insurance

Texas doesn’t require you to carry commercial property insurance, but it’s a crucial coverage for most businesses. It covers damage or theft of property and can cover lost income if you can’t operate your business because of a disaster.

General contractor license reciprocity in Texas

Many states recognize general contractor licenses issued by other states. This type of reciprocity means that you can obtain a contractor’s license in a different state without taking another examination. However, it isn’t available in Texas — Texas doesn’t have a reciprocity agreement with any other state.

Do Texas general contractors need to be bonded?

Unlike some states, Texas doesn’t have a statewide bond requirement for general contractors. However, many cities and counties may require contractors to be bonded before obtaining permits or registering—particularly if you work on government projects.

How NEXT helps protect general contractors in Texas

NEXT offers business insurance in Texas tailored to meet your needs. It typically takes less than 10 minutes to purchase a policy online, and you’ll be able to share your certificate of insurance instantly from your mobile device or computer. 

Learn more about general contractor business insurance and get an instant quote from NEXT today.

Do you plan to work as a general contractor in another U.S. state? Find out what states require licenses in our summary of general contractor license requirements.

This information has been provided as a service. It is correct and up-to-date to the best of our knowledge; however, it is in no way intended to offer legal advice and you must always consult with local authorities before you make any business decisions. Regulations and requirements may change at any time.

Amy Beardsley
About the author

Amy Beardsley, insurance expert and contributing writer at NEXT Insurance, is a content marketing writer who specializes in small business coverage. Leveraging her background in the legal field, Amy brings a deep understanding of laws, regulations, and compliance requirements to her work. As a content marketing writer since 2016, she has contributed to publications like Legal & General, Berkshire Hathaway Specialty Insurance, Insurify, and NerdWallet. Her work has also appeared in CNBC, Kiplinger, and US News. When she’s not writing, Amy enjoys playing cards with her family and experimenting with new recipes.

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