Every contractor in Texas knows that insurance is essential—but how much does it actually cost? The answer depends on your trade, business size, claims history, and location.
Contractors in Dallas, Fort Worth, and surrounding North Texas cities often pay more than rural contractors, but they also face stricter permit and client requirements. This article breaks down average contractor insurance costs in Texas, what affects your premiums, and how to lower expenses without cutting coverage.
Key Factors That Affect Contractor Insurance Pricing
Insurance companies evaluate a range of risk factors before setting your premium:
- Trade Type: Roofers and electricians pay higher rates than painters or landscapers.
- Payroll & Revenue: Larger payroll means more exposure.
- Location: Dallas/Fort Worth often carries higher rates than smaller towns.
- Coverage Limits: A $2M liability policy costs more than a $1M policy.
- Claims History: Clean records = lower premiums.
Contractors should regularly review coverage to ensure they’re not overpaying or underinsured. Learn more on our Contractor Insurance in Texas –page.
Average Contractor Insurance Costs in Texas
General Liability Insurance
- Cost: $600–$1,500/year for small contractors; $2,000+ for high-risk trades
- Coverage: Bodily injury, property damage, and legal defense
- Why It’s Needed: Almost always required by clients and cities
Workers’ Compensation Insurance
- Cost: $2–$8 per $100 of payroll, depending on trade risk
- Coverage: Medical expenses and lost wages for injured workers
- Texas Note: Not required statewide, but many public projects demand proof
Commercial Auto Insurance
- Cost: $1,200–$3,000 per vehicle annually
- Coverage: Liability and physical damage for business vehicles
Builder’s Risk Insurance
- Cost: 1–4% of total project cost
- Coverage: Materials and property under construction
Professional Liability (Errors & Omissions)
- Cost: $800–$2,500 annually
- Coverage: Design errors, consulting mistakes, or project oversight
Trade-Specific Costs in North Texas
- Electricians: $900–$2,000+ for liability; higher workers’ comp rates
- HVAC Contractors: $1,000–$2,200 liability; tool/equipment coverage recommended
- Landscapers: $500–$1,200 liability; auto insurance adds cost for fleets
- Roofers: $2,500–$10,000 liability; among the highest-risk trades
Regional Pricing Differences
Contractors in Dallas and Fort Worth face higher insurance costs because:
- Higher claims frequency and legal expenses
- Larger projects requiring bigger liability limits
- City permit offices often require specific proof of insurance
By contrast, contractors in rural areas of North Texas may see lower premiums but must still comply with DFW insurance standards when bidding there.
How Contractors Can Lower Insurance Premiums
- Bundle general liability, auto, and property policies
- Maintain strict workplace safety programs
- Raise deductibles strategically
- Work with an independent agency to compare multiple carriers
For example, at Eastman Insurance Solutions we shop among leading carriers like Travelers, Progressive, CNA, Chubb, and Safeco to find the right balance of cost and protection.
Final Thoughts
Most small to mid-sized contractors in Texas spend $1,500–$7,000 annually on insurance. High-risk trades or contractors with employees may pay more.
Ready to explore options? Get a custom quote on our Contractor Insurance in Texas – page, or check requirements through the Texas Department of Insurance. the best rate.
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