5 Best General Contractor Insurance Companies in Texas for 2023 

Thang Truong
Thang Truong
Updated on:

General contractors in Texas are required to have insurance to protect themselves and their clients from potential liabilities and financial losses. Choosing the right insurance company can be a daunting task, but with a little research and guidance, it is possible to find the right coverage at an affordable price. In this article, we will discuss the 5 best general contractor insurance companies in Texas, as well as the pros and cons of each. We will also cover the insurance and bonding requirements for Texas general contractors, as well as the licensing requirements.

5 best general contractor insurance companies in Texas

After intensive research, here are the 5 companies that we recommend for general contractors in Texas to buy their coverage. 

  • Simply Business: Best for finding cheap coverage
  • CoverWallet: Best for comparing several quotes online
  • NEXT: Best for comprehensive and affordable liability coverage for general contractors 
  • Smart Financial: Best brokerage firm to work with an experienced agent
  • InsurePro: Best for finding cheap short-term pay-per-day coverage

Simply Business: Best for finding cheap coverage

Simply Business is an online insurance broker that specializes in providing insurance for small businesses, including general contractors. They offer a variety of coverage options at competitive prices, making them a great choice for those looking for cheap coverage. 

Pros: 

  • Easily compare quotes from multiple insurers, a user-friendly website, and quick and easy online application process. 
  • All coverages that general contractors may need are available at Simply Business. General contractors can buy all coverages at reasonable rates in one place
  • Partner with 30+ reputable carriers, giving general contractors enough options to choose from 
  • Good customer satisfaction rating on trustpilot 

Cons: 

  • If you prefer a particular carrier that Simply Business doesn’t partner with, you need to look elsewhere 
  • It may take a bit longer than going directly to a carrier of your choice since Simply Busines has to pull quotes from several carriers to find the cheapest one.

CoverWallet: Best for comparing several quotes online

CoverWallet is another online insurance broker that allows customers to easily compare quotes from multiple insurers. They offer a variety of coverage options, including liability, workers’ compensation, and commercial auto insurance. CoverWallet has built a great quote comparison experience, making it easy for general contractors to compare quotes online

Pros: 

  • Able to easily compare multiple quotes, a user-friendly website, and quick and easy online application process
  • Partner with top-tier carriers 
  • Comprehensive digital capabilities from getting quotes, buying policies, and managing policies completely online 

Cons: 

  • Online quotes may not be available for some coverage. Sometimes you have to call to discuss quote options 
  • CoverWallet doesn’t handle claims. You have to file a claim directly with the carrier 

NEXT: Best for comprehensive and affordable liability coverage for general contractors 

NEXT is a specialty insurance provider that focuses on providing comprehensive liability coverage for small businesses, including general contractors. They offer a variety of coverage options at competitive prices, making them a great choice for those looking for affordable and comprehensive coverage. NEXT is a digital-first carrier, they offer one of the best digital experiences, making purchasing general contractor insurance as simple and easy as checking your email. 

Pros: 

  • Comprehensive liability coverage for general contractors 
  • Affordable and competitive rates 
  • Great digital experience, from getting quotes, buying policies, or filing a claims 
  • Download certificate of insurance within minutes after purchasing 

Cons: 

  • Limited coverage options. Other coverages that general contractors may need may not be available with NEXT 
  • Lack of personalized services through agents 

Smart Financial: Best brokerage firm to work with an experienced agent

Smart Financial is a brokerage firm that specializes in providing insurance for small businesses, including general contractors. They work with experienced agents to help customers find the right coverage at an affordable price. Smart Financial believes that general contractor insurance is quite complicated and focuses their operations on matching general contractors with experienced agents who can help identify the right coverage and find the cheapest quotes from the carriers that they partner with. 

Pros: 

  • Personalized service, 
  • A wide network with experienced agents who have worked with thousands of general contractors 
  • Offer a wide range of coverages that general contractors may need, making it easy to buy everything in one place 

Cons: 

  • Limited digital capabilities 
  • You have to work with an agent on phone. If you prefer doing everything online, this may not be a good option for you. 

InsurePro: Best for finding cheap short-term pay-per-day coverage

InsurePro is an online insurance broker that specializes in providing short-term, pay-per-day coverage options for small businesses, including general contractors. They offer a variety of coverage options at competitive prices, making them a great choice for those looking for cheap, short-term coverage. If you don’t need a traditional annual policy, InsurePro is a great option to start with. 

Pros: 

  • Quick and easy online application process 
  • Very affordable rates for short-term coverage 
  • Coverage is from reputable carrier partners 

Cons: 

  • A relatively new brokerage firm, lack of a historical track record 
  • Other complicated coverages that general contractors may need may not be available yet 

Are general contractors required to be licensed in Texas? 

Yes, general contractors are required to be licensed in Texas. The Texas Department of Licensing and Regulation (TDLR) is responsible for issuing and regulating licenses for general contractors in the state. To become licensed, a contractor must meet certain qualifications, such as passing an exam and having a certain amount of experience in the field. The contractor must also pass a background check and meet continuing education requirements to maintain the license.

The license is divided into two types, the Residential Contractor and the Non-Residential Contractor. the Residential contractor can only work on residential projects while the non-residential contractor can work on any type of projects.

It’s important to note that general contractors must also comply with other regulations and laws, such as building codes and safety regulations.

What benefits do general contractors get to be licensed? 

Being licensed as a general contractor in Texas has several benefits, including:

  1. Legal recognition: A license from the Texas Department of Licensing and Regulation (TDLR) is a legal recognition that an individual has met the necessary experience and financial requirements to work as a general contractor in the state.
  2. Increased credibility: A license demonstrates to clients and other industry professionals that a general contractor is qualified and competent in their field, which can increase credibility and trust in the business.
  3. Access to job opportunities: Many private and public construction projects in Texas require that contractors be licensed. Having a license can open up more job opportunities and increase potential revenue.
  4. Professional development: The process of obtaining a license and maintaining it through continuing education helps to ensure that general contractors stay up-to-date on industry standards, best practices, and new technologies.
  5. Legal protection: A licensed contractor is required to carry liability and workers’ compensation insurance, which can provide financial protection in case of accidents or disputes.
  6. Compliance with state laws: A license ensures that a general contractor is operating in compliance with state laws, regulations, and building codes, which can help to avoid potential legal and financial penalties.
  7. Networking opportunities: Being part of the licensed contractor community provides opportunities for networking and learning from other experienced professionals in the industry.

It’s important to note that being licensed as a general contractor in Texas does not guarantee success in business, but it does demonstrate a level of professionalism and commitment to the trade.

What are the licensing requirements for general contractors in Texas?

In Texas, general contractors are required to be licensed by the Texas Department of Licensing and Regulation (TDLR). To obtain a license, contractors must pass an exam and meet the experience and financial requirements. The license must be renewed every two years and continuing education is required.

These requirements include:

Experience requirements:

  • A minimum of four years of experience in the trade or occupation for which the license is sought, or an equivalent combination of education and experience.
  • Experience must be verified by a licensed contractor, a public official, or a professional engineer.

Financial requirements:

  • A net worth of at least $15,000, as verified by a financial statement.
  • A surety bond of $10,000 for residential construction, and $15,000 for commercial construction.
  • Proof of workers’ compensation insurance if required by law, and liability insurance.

In addition to these requirements, an individual must also pass an exam to obtain a general contractor license in Texas. The exam covers topics such as building codes, laws, and regulations, safety, and business management.

It is important to note that requirements may vary depending on the specific type of contractor license an individual is seeking (Residential or Commercial) and that these requirements are subject to change by the TDLR. It’s advisable to check the TDLR website or contact them directly for the most current information on the requirements.

Are general contractors in Texas required to have insurance?

Yes, as we see above, to be licensed in Texas, general contractors are required to have surety bond and workers comp insurance at the minimum. 

In addition, they are required to have liability insurance by most of their customers and clients. Without liability coverage, general contractors may not get any work. 

 They must have commercial auto insurance too, if they use a vehicle for work purposes. 

Which insurance coverage are general contractors in Texas required to have and what does it cover? 

General contractors in Texas are required to have liability insurance, workers’ compensation insurance, and commercial auto insurance. 

General liability insurance for general contractors

The requirement for general contractors to have general liability coverage in Texas is due to the inherent risks that come with construction. Liability coverage helps protect from any financial losses or liabilities incurred from unexpected damages associated with the contractor’s work, including any injuries to people or property involved in the project. This coverage typically covers medical expenses, legal fees, damages resulting from negligence and other costs associated with the contractor’s work.

Workers comp insurance for general contractors 

General contractors are required to have workers comp insurance in Texas to provide coverage for any injuries or illnesses that their employees may suffer while on the job. This insurance covers medical expenses, lost wages, and other benefits that may be due to the injured employee. It also provides protection for the contractor in case of a lawsuit by providing a limit on total liability exposures.

Commercial auto insurance for general contractors 

General contractors are required to have commercial auto insurance to protect themselves and their business from liability in the event of an accident. This type of insurance provides coverage for injuries and property damage that may occur while the contractor is operating a vehicle for business purposes, including accidents caused by the contractor or their employees. It also protects the contractor against claims made by third parties such as other drivers, pedestrians or passengers who are involved in an accident. Commercial auto insurance typically covers medical expenses, damages to vehicles, legal defense costs, and any other financial losses a contractor may incur due to an automobile-related incident.

What are the bonding requirements for Texas general contractors?

Texas does not have a state-wide bonding requirement for general contractors, but many municipalities and local governments may require a bond for certain types of projects. A bond is a form of financial security that ensures the contractor will complete the project and pay any outstanding debts or claims related to the project. The bond amount is typically a percentage of the total project cost and is determined by the project’s size and complexity.

How much does general contractor insurance cost in Texas? 

The average cost of general liability insurance for general contractors in Texas is $132 per month, or $1,560 per year. This is quite expensive compared to other similar policies for other small business types. That is understandable since there are a lot more risks at a construction site than there are at a doctor’s office or even a grocery store. 

Most general contractors in Texas pay between $110 to $1,500 per month for their general liability insurance. It is a wide range because liability insurance cost for general contractors varies significantly depending on several factors that we are discussing below. 

If general contractors also have workers comp and commercial auto insurance, they will pay more. Below are the average costs of these coverages for general contractors in Texas: 

General contractor insurance coverage Average costs in Texas 
General liability insurance $132 per month 
Workers comp insurance $184 per month per employee 
Commercial auto insurance $146 per month 

Keep in mind that these are just the averages. Your rates will be different. Be sure to shop around with a few companies or work with a brokerage firm like Simply Business or Smart Financial to find the cheapest rate for your business. 

What factors affect general contractor insurance costs in Texas? 

Several factors affect the general contractor insurance cost in Texas. Below are a few important ones: 

Type of work

The type of work that the general contractor will be performing can affect the cost of insurance. High-risk projects, such as those involving heavy machinery or hazardous materials, will typically have higher insurance costs than low-risk projects, such as those involving only basic construction or remodeling.

Size of the project

The size of the project can also affect the cost of insurance. Larger projects will typically require more coverage, which can increase the cost of insurance.

Location of the project

The location of the project can also play a role in determining the cost of insurance. Projects located in areas with high risks of natural disasters or other hazards will typically have higher insurance costs than those located in safer areas.

Experience and reputation of the contractor

The experience and reputation of the contractor can also impact the cost of insurance. Contractors with a good track record of completing projects safely and without incident may be able to secure lower insurance rates than those with a history of accidents or safety violations.

Insurance coverage limits

The limits of the insurance coverage also affects the cost. Higher coverage limits will typically result in higher insurance costs, while lower coverage limits will result in lower costs. It is important to balance the cost of insurance with the level of protection needed for the project.

What Texas general contractors can do to find cheap coverage

There are several things that Texas general contractors can do to find cheap coverage:

Shop around

Compare rates from multiple insurance providers to find the best deal. Make sure to compare coverage levels and exclusions as well as the cost of the policy.

Bundle policies

Consider combining multiple insurance policies, such as general liability insurance with workers’ compensation or commercial auto insurance, to potentially receive a discount.

Maintain a good safety record

Implementing safety measures and training employees can help to maintain a good safety record and potentially qualify for lower insurance rates.

Raise the deductible

Increasing the deductible on your policy can lower the overall cost of insurance. However, it’s important to consider the financial impact of a higher deductible in case of a claim.

Review coverage regularly

As the business grows, insurance needs may change. Review coverage regularly to ensure that you have the appropriate level of protection without paying for unnecessary coverage.

Look for discounts

Ask about any discounts that the contractor may qualify for, such as certifications or safety equipment.

Joining trade association

Consider joining a trade association or professional association, as they often have group insurance plans that offer good rates which may be cheaper than individual policies.

What Texas general contractors should pay attention to when buying insurance

When buying insurance, Texas general contractors should pay attention to the following:

  1. Coverage options: Make sure the policy covers all the necessary risks, such as liability, workers’ compensation, and commercial auto insurance.
  2. Premiums: Compare premiums and coverage options from multiple insurers to find the best deal.
  3. Financial stability: Choose an insurance company with a good financial rating to ensure they will be able to pay claims if necessary.
  4. Claims process: Make sure the company has a clear and easy claims process to minimize delays and headaches.
  5. Tailor coverage: Tailor coverage specific to your company, to make sure the policy fits your business needs.

Final thoughts

In conclusion, choosing the right insurance company is crucial for Texas general contractors to protect themselves and their clients from potential liabilities and financial losses. The 5 best general contractor insurance companies in Texas are Simply Business, CoverWallet, NEXT, Smart Financial, and InsurePro. Each of these companies offers a variety of coverage options at competitive prices, and it is important to do your research and choose the company that best fits your business needs. Remember to pay attention to coverage options, premiums, financial stability, claims process, and tailor coverage to your business needs.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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