Asphalt contractors in Texas face some of the harshest operating conditions in the country.
Extreme heat, rapid temperature swings, unpredictable soil conditions, accelerated wear, and demanding TXDOT specifications make asphalt work one of the highest-risk contractor trades in the state.
Yet most asphalt and paving contractors across Dallas–Fort Worth, Rockwall, Waco, and North Texas still rely on insurance programs built for general contractors — not specialty trades.
And because asphalt work has unique workmanship exposures, most Texas asphalt contractors are carrying programs that will not respond when a performance failure occurs.
This article explains the biggest coverage gap in the Texas paving industry — why it exists, why traditional policies fail, and how EIS Texas helps asphalt contractors protect their business when the unexpected happens.
Industry Overview: Asphalt Work Is a High-Spec Trade with High Liability
Texas asphalt contractors are responsible for surfaces that:
- Support heavy commercial traffic
- Endure extreme weather cycles
- Must meet strict compaction and density tolerances
- Are required to meet TXDOT or municipal specifications
- Are tied to performance guarantees or warranties
These projects include:
- Parking lots
- City streets
- Subdivision roads
- Industrial yards
- Retail centers
- School district projects
- TXDOT resurfacing
- Utility cut patchwork
- Milling and overlay projects
Yet despite these requirements, almost all commercial insurance programs treat asphalt like any other subcontractor — even though the risk profile is vastly different.
The result is predictable:
Coverage gaps appear exactly where asphalt contractors need protection the most.
The Real Coverage Gap: Performance Failure (Workmanship) Risk
Most asphalt contractors assume that if their work fails prematurely—if the lot starts breaking apart, striping peels, substrate sinks, or the surface must be re-rolled—the insurance policy will step in.
It won’t.
Here’s why.
General Liability Does NOT Cover Workmanship Failure
GL covers accidental property damage.
Performance issues are considered:
- Faulty workmanship
- Breach of contract
- Failure to perform
- Economic loss
These are excluded in nearly every Texas GL policy.
If a job fails because:
- Compaction was insufficient
- Sub-grade prep was incomplete
- The mix cooled too quickly
- Weather conditions changed mid-pour
- Traffic was released too soon
- Tack coat wasn’t applied properly
- Milling depth varied
- Equipment malfunctioned
the insurance carrier treats this as a workmanship issue — not a covered claim.
The contractor pays out-of-pocket.
Why Asphalt Contractors Face Increased Failure Exposure in Texas
Texas creates unique conditions that accelerate asphalt failures:
1. Extreme Heat and Curing Windows
Workability time drops rapidly in 95°+ temperatures common across DFW and Central Texas.
Small crews or clogged routes can push asphalt past its ideal compaction window — increasing alligator cracking and premature failure.
2. Soil Conditions & Sub-Grade Volatility
From expansive clay in North Texas to mixed compositions in rural areas, substrate stability varies widely.
Improper compaction becomes one of the most expensive failures asphalt contractors face.
3. Increasing TXDOT and Municipality Requirements
Many TXDOT contracts require:
- Minimum density thresholds
- Certified test results
- DOT-approved mix designs
- Documentation of compaction passes
Insurance does not cover failing these standards.
4. Subcontractor Dependence
Many asphalt contractors subcontract:
- Milling
- Striping
- Hauling
- Material delivery
- Concrete transitions
- Sub-grade prep
If a subcontractor’s work fails and coverage isn’t aligned under proper risk transfer, the asphalt contractor inherits the liability.
Find Out More About EIS-Texas
Risk Management Services
Case Study: A Real Texas Asphalt Contractor Performance Failure
A mid-size asphalt contractor in Collin County resurfaced a commercial parking lot. Within six months:
- Surface cracking appeared
- Water ponding created deterioration
- Load-bearing areas failed
The property owner demanded a full tear-out and replacement.
The contractor filed a GL claim.
Denied — workmanship failure.
Denied — faulty compaction.
Denied — economic loss.
Out-of-pocket cost:
- $180,000 in materials and labor
- $22,000 in legal fees
- $17,000 in lost time and scheduling disruption
- Reputation and customer loss
Had the contractor carried specialized coverage options or structured risk transfer, that burden could have been minimized.
Key Coverage Gaps Asphalt Contractors Miss
1. Faulty Workmanship / Limited Rework Coverage
Some carriers offer niche endorsements for:
- Faulty workmanship
- Voluntary property damage
- Rip & tear coverage
- Resulting damage
But these are specialty forms, not standard contractor endorsements.
Most asphalt contractors in Texas do not carry them.
2. Completed Operations for Asphalt-Specific Failures
Where most claims occur:
- Premature deterioration
- Failure to bond
- Improper tack coat application
- Incorrect mix temperature
- Compaction error
- Milling mistakes
Most standard policies do not support the unique completed operations exposure asphalt contractors face.
3. Subcontractor Risk Transfer Failures
Common subcontractor gaps include:
- Stripers without completed ops coverage
- Haulers with improper liability limits
- Milling contractors with faulty work exclusions
- No waiver of subrogation
- No primary & noncontributory
If any subcontractor fails, the asphalt contractor pays unless risk transfer is enforced.
Never place too much emphasis on COI’s, Read More Here
Certificates Aren’t Coverage
4. Equipment Breakdown & Inland Marine
Asphalt contractors depend on high-value equipment:
- Rollers
- Skid steers
- Pavers
- Milling machines
- Tack distributors
- Trailer-mounted equipment
Breakdowns often occur due to heat, vibration, or hydraulic failure — but standard policies exclude mechanical breakdown.
As companies grow into 10+ pieces of equipment, this becomes a critical gap.
5. Material Hauling & Hot Mix Transport Liability
Hauling introduces:
- Spill exposure
- Hot mix release incidents
- Vehicle-related property damage
- Burn injuries
- Temperature loss claims
Most asphalt contractors do not carry the endorsements required for material transport liability.
Professional Liability / E&O: The Most Overlooked Exposure in Asphalt Contracting
Most Texas asphalt contractors assume Professional Liability (E&O) coverage is only for architects, engineers, or designers. But paving contractors routinely perform tasks that rise to the level of professional services, especially as they scale into commercial, municipal, and TXDOT-related work.
Here’s where E&O becomes a critical coverage many asphalt contractors unknowingly operate without.
1. Interpreting TXDOT or Municipal Specifications
When contractors advise clients on:
- Mix design recommendations
- Compaction targets
- Cure times and traffic release windows
- Milling depths
- Drainage patterns
those recommendations influence project design decisions.
If a failure occurs, attorneys argue the contractor provided professional guidance—not simple labor.
GL excludes professional errors.
E&O is the coverage that responds.
2. Documenting Density, Moisture, and Sub-Grade Conditions
Density logs, compaction passes, substrate moisture readings, and temperature documentation become part of the official record for:
- TXDOT inspectors
- Engineers
- Municipalities
- Commercial developers
If documentation is incomplete, inaccurate, or misinterpreted, resulting losses fall under professional services, not GL.
3. Bidding, Scoping, and Assessing Job Requirements
Asphalt contractors frequently:
- Evaluate substrate failure
- Recommend milling vs. overlay
- Suggest undercutting
- Determine whether soft spots exist
- Advise on drainage solutions
These assessments influence structural decisions.
If the surface fails and the contractor made recommendations, the claim often follows an E&O path — even if the workmanship itself was fine.
4. Quality Control & Subcontractor Oversight
When contractors oversee:
- Milling subcontractors
- Striping crews
- Haulers
- Tack and prep crews
any oversight error can create a claim for negligent supervision — a professional liability issue.
5. Contracts Increasingly Require E&O
More Texas municipalities, school districts, and commercial developers now require:
- Documentation accuracy
- Testing records
- Mix ticket verification
- Project progression photos
- Compliance forms
Signing off on these documents creates a professional obligation.
The Key Distinction Texas Asphalt Contractors Must Understand
- GL covers accidental damage.
- E&O covers professional judgment errors.
- Faulty workmanship requires specialized endorsements.
Most asphalt contractors in Texas only have one of the three.
This is where EIS Texas guides contractors through a complete risk framework that reflects the actual exposures created by asphalt work—not the oversimplified insurance programs most agencies provide.
Why Asphalt Contractors Outgrow Their Insurance Faster Than They Realize
As asphalt contractors scale, their operations evolve:
- Larger commercial accounts
- TXDOT jobs
- Multi-crew operations
- Multiple equipment units
- Subcontractor mixing
- Tight scheduling windows
- Multi-city service areas
Yet insurance remains structured for:
- Small residential paving
- Small-crew operations
- Basic GL + Auto + Inland Marine
This mismatch exposes companies to catastrophic out-of-pocket losses.
The EIS Texas Asphalt Contractor Program
EIS Texas helps asphalt and paving contractors redesign insurance programs to reflect actual field conditions—not theoretical coverage models.
Our services include:
1. Asphalt-Specific Policy Review
We analyze:
- Workmanship exclusions
- Resulting damage carvebacks
- Completed operations endorsements
- Asphalt-specific definitions
- TXDOT compliance exposures
2. Scarcity of Asphalt Endorsements
We identify specialty endorsements and negotiate with carriers that understand asphalt operations.
3. Subcontractor Agreement & Risk Transfer Review
Striping, milling, hauling, and prepping introduce multi-layered exposure.
We verify:
- Additional insured
- Waivers
- Primary & noncontributory
- Completed operations
- Subcontractor-specific limits
4. Equipment and Fleet Risk Management
We help asphalt contractors:
- Strengthen fleet standards
- Manage heat-related risk
- Track breakdown trends
- Evaluate hauling safety practices
5. Material Performance & Testing Liability Guidance
We review contracts to identify where:
- Density tests
- Moisture levels
- Mix designs
- Application windows
create breach-of-contract exposure rather than insurable events.
Find Out More About EIS-Texas Niche Programs
Contractor Insurance Programs in Texas
We Invite You To Try Something, Different.
Texas asphalt contractors build the roads, parking lots, and infrastructure that keep communities moving. Your insurance should match the precision and accountability your work demands — not leave you exposed to costly performance failures.
At EIS Texas, we help asphalt contractors protect their operations, their equipment, their crews, and their reputation as they grow across North Texas.
FAQs
Does General Liability cover workmanship or performance failures in asphalt work?
No. General Liability only responds to accidental third-party property damage. It does not cover compaction issues, improper substrate preparation, mix design failures, density deficiencies, or surface defects. These are classified as workmanship or performance failures, which are excluded without specialty endorsements.
How is Professional Liability (E&O) different from General Liability for asphalt contractors?
General Liability covers physical, accidental damage.
E&O covers professional errors, such as:
- Incorrect mix design recommendations
- Improper interpretation of TXDOT specifications
- Faulty density or moisture documentation
- Inaccurate subcontractor oversight
- Errors in bidding, scoping, or surface assessment
As contractors take on larger or municipal projects, E&O becomes increasingly critical.
Why do asphalt contractors face higher claim denial rates?
Because most claims involve workmanship, documentation, or professional judgment errors—all of which fall outside standard GL coverage. Carriers routinely deny:
- Compaction failures
- Early cracking
- Improper milling depth
- Uneven surfaces
- Poor bonding from incorrect tack application
- Drainage or ponding issues
These are treated as contractual or professional liability issues, not accidental losses.
Can asphalt contractors get coverage for rework or faulty workmanship?
Yes—but only through specialty endorsements such as:
- Faulty Workmanship
- Voluntary Property Damage
- Resulting Damage carvebacks
- Rip & Tear coverage
These endorsements are not standard and must be specifically negotiated. Most asphalt contractors in Texas do not carry them.
Do TXDOT or municipal projects require additional forms of coverage?
Increasingly, yes. Larger public or commercial projects often require:
- Detailed documentation
- Mix ticket accuracy
- Density testing logs
- Quality control oversight
- Proper subcontractor risk transfer
These expectations expose contractors to E&O liability, not just GL.
How does subcontractor work impact an asphalt contractor’s insurance?
If stripers, haulers, milling crews, or sub-grade contractors fail—and your risk transfer is incomplete—you may inherit their liability. Without:
- Additional Insured
- Primary & Noncontributory wording
- Waiver of Subrogation
- Completed Operations coverage
your policy becomes the first to respond.
Does insurance cover asphalt failures caused by extreme Texas heat?
No. Failure caused by improper compaction, insufficient cooling time, premature traffic opening, or heat-driven mix issues is classified as a performance failure, not an insurable accident. Specialized endorsements are required for any coverage to apply.
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