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Business insurance for general contractors in Texas
Learn about business insurance requirements and the most common policies for general contractors in Texas.
Which policies are required for general contractors in Texas?
Depending on the specifics of your work, general contractors may be required to hold several different types of business insurance. For example, if your business owns a vehicle, you likely need to purchase commercial auto insurance to meet state requirements.
If you have a physical location with a commercial lease, your property manager may require you to purchase general liability insurance. Commonly purchased by general contractors in Texas, general liability insurance can protect your business from expenses associated with common mishaps, such as customer property damage and injuries.
To meet state requirements in Texas, general contractors who work for public employers must provide workers’ compensation insurance, which covers lost wages and medical bills for work injuries. General contractors who work for private employers are not required to provide workers’ comp, although the policy will still benefit these contractors.
Depending on your clients and the type of work you do, you may also need builder’s risk insurance or surety bonds.
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What are the most common policies for general contractors in Texas?
General contractors may need different types of insurance depending on the work they do and their client contracts. In Houston and elsewhere in Texas, general contractors often buy these policies.
General liability insurance
General liability insurance is the foundation of a general contractor’s protection. It covers damage to client property, as well as client injuries. Most commercial leases require you to have this coverage.
Adding commercial umbrella insurance can boost your coverage on general liability insurance and other liability policies.
Business owner's policy
General contractors who work independently or own a small company often qualify for a business owner’s policy (BOP). This policy bundles general liability coverage and commercial property insurance together at a discount.
A BOP is the top policy recommended by Insureon's expert agents, as it offers protection against common liability claims and business property coverage at an affordable price.
Workers' compensation insurance
If you own a construction or home improvement business in Texas that has employees, your business is required to carry workers’ compensation insurance if it does work for public employers. Workers’ compensation can help pay for medical bills and lost wages when an employee is injured on the job.
Commercial auto insurance
Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.
Contractor’s tools and equipment insurance
Contractor’s tools and equipment insurance protects a general contractor’s saws, nail guns, drills, and other construction equipment. Look to this policy or inland marine insurance to protect equipment that moves from place to place.
Professional liability insurance
Professional liability insurance provides protection when a general contractor is sued for a professional mistake, such as missing a deadline on a construction project. This policy is also called errors and omissions insurance (E&O).
Surety bonds
Surety bonds guarantee reimbursement for the client if a general contractor is unable to fulfill the terms of a contract. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.
Builder’s risk insurance
Builder’s risk insurance can cover fires, vandalism, equipment theft, and other damage done to a structure still under construction.
How much does business insurance cost for general contractors in Texas?
According to an analysis of Insureon applications, the typical general contractor in Texas can expect to pay slightly more than the national average for most types of business insurance.
For example, the average annual cost of general liability insurance for general contractors in Texas is $1,761, more than the national average of $1,342.
On the other hand, the average annual cost of a surety bond is $50, significantly less than the national average of $196.
Our figures are sourced from the median cost of policies purchased by Insureon customers. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Save time and money with Insureon
Insureon’s industry-leading technology helps general contractors in Texas save time and money shopping for insurance by comparing policies from top U.S. providers.
Start a free online application to review quotes for the policies that best fit your business. Our insurance agents are licensed in Texas and can answer your questions as you consider coverage.
To make the application go quicker, have this information ready:
- Workforce details, such as the number and types of employees
- Current and projected revenue
- Business partnerships
- Insurance history and prior claims
- Commercial lease insurance requirements
Apply for free insurance quotes for general contractors today.
Updated: August 24, 2023
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