What a Texas electrical contractor must insure

TDLR sets three liability floors, and a certificate must clear all three

Texas Department of Licensing and Regulation reads a certificate of general liability insurance against three separate numbers, not one headline figure. An electrical contractor or electrical sign contractor license requires at least $300,000 per occurrence, combining property damage and bodily injury in a single claim. A separate $600,000 aggregate caps the total the policy pays out across every claim filed in the policy period. A third figure, $300,000 aggregate for products and completed operations, covers a defect discovered after the job is finished and the crew has left the site. A broker who quotes only the occurrence number and assumes the rest follows automatically is the most common way an otherwise adequate policy fails review — confirm all three limits in writing before you buy, since the certificate is just one attachment in the rest of what TDLR wants filed. Comparing quotes on the per-occurrence number alone can be misleading, too: a policy with a high per-occurrence limit but a thin aggregate can look competitive on paper while running out of coverage after two or three moderate claims land in the same policy year.

$300,000An electrical contractor license requires general liability coverage of at least $300,000 per occurrence, combined for property damage and bodily injury. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

$600,000The same license requires at least $600,000 aggregate, the total amount the policy will pay for property damage and bodily injury during the policy period. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

$300,000The license also requires at least $300,000 aggregate for products and completed operations. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

The certificate has to name the exact business on your license

The certificate of insurance is compared against your application by name, not by owner. TDLR requires the business name — and every assumed name or DBA the business trades under — on the certificate to match the name you gave when you registered the business, including punctuation a broker might otherwise drop. This is where contractors who incorporated under one name and later started advertising under a shorter trade name get stuck: the certificate lists the trade name, the application lists the legal name, and TDLR sees a mismatch instead of one business. List every assumed name on the certificate request when you order it, not just the one on the invoice, and confirm the broker copied each one exactly as filed. A name that matches on the application but not the certificate, or the reverse, holds up the file the same way a missing signature does. If you're still deciding between a sole proprietorship and a formal entity, settle that before you order the certificate — changing the business's legal name after the policy is bound means reissuing the certificate, not just updating a form.

The name or assumed business name on the certificate of liability insurance must match the business name on the electrical contractor license application. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

Your carrier has to be admitted, surplus lines, or A.M. Best rated

TDLR does not accept a certificate from just any insurer. The general liability policy has to come from a company admitted to write business in Texas, or from an eligible surplus lines carrier as the Texas Insurance Code defines that term — categories that cover most standard commercial carriers and most of the specialty market that writes higher-risk trades. If a carrier falls outside both categories, TDLR still accepts it when the company holds an A.M. Best rating of B+ or higher, which is the floor most agents check first because it's the easiest one to confirm straight off a quote. A cheap policy from a carrier that clears none of the three is not a shortcut — it's a certificate TDLR will reject, and you find out after you've already scheduled the master electrician's signature and paid the filing fee.

General liability insurance must come from an admitted company, an eligible surplus lines carrier, or another company rated by A.M. Best Company as B+ or higher. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

The cancellation clause has to run 30 days, not less

That 30-day cancellation window isn't a generic industry default — TDLR's own certificate of insurance form spells out the exact notice periods rather than leaving them to a broker's boilerplate. The insurance carrier has to endeavor to notify the department at least 30 days before a cancellation or non-renewal the carrier initiates, and within 10 days after one the contractor initiates. A standard ACORD certificate usually satisfies this without edits, but a policy sold with a shorter cancellation window — not unusual on some surplus lines placements — does not, and signing a certificate that overstates what the underlying policy actually does just moves the problem later. Read the cancellation clause in the policy itself before you sign the certificate; the certificate is only as accurate as the policy behind it, and TDLR is relying on that accuracy holding.

30 daysThe insurance carrier must endeavor to notify TDLR at least 30 days before a cancellation or non-renewal it initiates, and within 10 days after one the contractor initiates. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

Workers' compensation in Texas is a declaration, not a purchase

Texas is one of the few states that does not require an employer to carry workers' compensation insurance at all — carrying it is optional, and TDLR's application asks you to declare which of three positions you're in rather than prove you bought a specific product. You can check that you carry workers' compensation insurance, in which case the certificate follows the same carrier and cancellation rules as the general liability policy. You can check that you self-insure, a route the Texas Department of Insurance's Division of Workers' Compensation restricts to employers large enough to post a substantial security deposit. Or you can check that you carry none, which isn't the end of the question — it triggers a separate filing with the state, covered next, that most first-time applicants don't expect a licensing form to require. Whichever box you check, it isn't a one-time answer: your status can change as the business grows, and hiring your first employee is the moment most contractors revisit a choice they made back when it was just them and a van.

$500,000Self-insurance for workers' compensation generally requires a manual premium of at least $500,000 in Texas or $10,000,000 nationally, plus a minimum security deposit of $300,000. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

200 employeesEmployers with fewer than 200 employees generally will not meet the criteria to become a certified self-insurer for workers' compensation. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

Filing a notice of no coverage is mandatory once you check that box

Electing not to carry workers' compensation does not mean skipping a step — it means filing a different one. Texas labor law lets an employer decline coverage, but that employer still has to file a notice of no coverage with the Texas Department of Insurance through its online tool for non-subscribers, and that filing is what TDLR checks for, not a verbal declaration on the license application. What the election actually exposes you to shows up if an employee gets hurt on the job: a non-subscribing employer loses several of the standard defenses available in an injury lawsuit, so a claim that might otherwise turn on the worker's own carelessness or a coworker's mistake doesn't get to lean on those arguments the same way. That trade-off is why most contractors running any crew at all still carry the coverage even though the state doesn't force them to.

Employers who elect not to carry workers' compensation insurance must file a notice of no coverage with the Texas Department of Insurance through its online reporting tool for non-subscribers. — Texas Department of Licensing and Regulation, retrieved 2026-09-16

The van needs its own policy — your personal auto doesn't cover it

Nothing in the electrical contractor license application asks about auto insurance — TDLR's certificate covers general liability and workers' compensation only, and commercial auto never enters the filing. That doesn't make it optional in practice. A personal auto policy typically excludes business use once a vehicle spends real time hauling tools, materials, or a ladder rack between job sites, and an insurer that discovers the exclusion after an accident can deny the claim outright instead of just adjusting the premium. The fix is a commercial auto policy written for the vehicle's actual use, which can also cover the tools and equipment riding in the van under a separate rider — a personal policy's contents coverage generally stops at personal belongings, not a van full of trade equipment. Price it against how the van is actually used, not against what a personal policy on a sedan would cost, and tell the agent up front if the vehicle is titled to the business rather than to you personally — that alone can change which policy form applies.

A general contractor or utility will usually ask for more than TDLR's floor

TDLR's three numbers are a licensing floor, not a ceiling any general contractor or utility has to accept. A GC bidding you onto a commercial job commonly asks for higher per-occurrence and aggregate limits than the state minimum, an additional-insured endorsement naming their company on your policy, and a certificate sent directly from your broker rather than a copy you forward yourself. A utility adding you to an approved-contractor list, or a city running its own municipal permitting process, may add its own certificate-holder requirements on top of that, and some of those processes layer a separate bonding requirement alongside the insurance rather than instead of it. None of this is optional once a contract or a permit application asks for it, even though TDLR itself never checks whether you carry more than its floor — a state license and a GC's insurance requirement are two different gates, and clearing the first doesn't clear the second. Keep a copy of every certificate you've issued to a GC or a utility on file — when a renewal comes up, matching the new certificate against what you already promised a client is faster than reconstructing it from an old contract.

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