· Updated July 11, 2026

Texas Certificate of Insurance Requirements: Complete Guide

What property managers and contractors need to know about COI requirements in Texas: minimum coverage limits, additional insured rules, workers' comp exceptions, and state-specific compliance.

Texas is unique. It is the only state where workers' compensation insurance is truly optional for private employers. That one fact changes everything about how you should approach COI verification and vendor compliance in Texas. If you treat Texas like any other state, you will miss the single biggest coverage gap a vendor can have, and the liability flows directly to you.

Texas is also the country's largest construction market by volume, the center of the oil and gas industry, and home to four of the ten largest U.S. cities. Insurance requirements in Texas are shaped by all three of these forces: the volume of construction, the demands of the energy sector, and the complexity of doing business across a state that is geographically larger than many countries. This guide covers what you actually need to know, with a focus on the workers' comp issue that defines Texas COI compliance.

The Texas Workers' Compensation Non-Subscriber System

This is the issue that separates Texas from every other state. In every other state, workers' compensation is mandatory for employers above a certain threshold (typically one employee). Texas is the only state that makes workers' comp truly optional for private employers. A construction company with 500 employees can legally decline to carry workers' compensation coverage, and no state agency will stop them.

But opting out of workers' comp is not cost-free. When an employer becomes a non-subscriber in Texas, they lose their most important legal defenses in workplace injury cases:

  • They cannot argue that the employee's own negligence caused the injury (contributory negligence defense is lost)
  • They cannot argue that a coworker caused the injury (the fellow servant doctrine is unavailable)
  • They cannot argue that the employee assumed the risk inherent in the work (assumption of risk defense is lost)

In practical terms, when a non-subscribing employer's employee gets hurt on the job and sues, the employer has almost no defense. The employee only needs to prove that the injury occurred in the course and scope of employment, and the employer is effectively strictly liable. The damages can exceed what workers' comp would have paid because the employee can recover for pain and suffering and punitive damages, none of which are available through the workers' comp system.

For a property manager or general contractor hiring vendors in Texas, the non-subscriber system creates a chain of liability. If you hire a subcontractor who is a non-subscriber, and one of their employees is injured on your project, that employee can sue you directly. Your potential liability exists regardless of whether the subcontractor has an alternative injury benefit plan. The fact that the subcontractor chose not to carry workers' comp means their injured employees are more likely to pursue all available defendants, including you.

Your approach to Texas vendor COIs should include one of the following for every vendor who performs physical work:

Option 1: Require workers' comp coverage. While Texas does not mandate it, you can and should mandate it in your contract. Require the vendor to carry workers' comp insurance at statutory limits and verify it on every COI. Most established contractors in Texas do carry workers' comp, because their large clients require it. A vendor who refuses to carry workers' comp or cannot because their claims history makes coverage too expensive is sending a clear signal about their risk profile.

Option 2: Require a signed non-subscriber acknowledgment and alternative injury benefit plan. If you are willing to accept a non-subscribing vendor (and some legitimate, large Texas employers are non-subscribers), require written acknowledgment that the vendor is a non-subscriber, confirmation that they carry an alternative occupational injury benefit plan (through your insurance carrier or a third-party administrator), and an indemnity agreement that the vendor will defend and hold you harmless for any workplace injury claims brought against you by their employees. This does not eliminate your liability risk but it does create a contractual backstop. Have your Texas attorney draft this language.

What not to do: accept a COI that shows no workers' comp coverage and no written acknowledgment of non-subscriber status. This is the most common and most dangerous compliance gap in Texas.

Coverage Limits in Texas: What to Require

Texas does not mandate specific general liability limits for private contracts. The market standard is $1M/$2M for general liability across most trades. However, several factors push Texas limits higher than the national average:

Energy sector influence. Texas oil and gas operators require significantly higher limits from their contractors: $2M/$4M to $5M/$10M GL is common, with umbrellas reaching $25M-$500M for certain operations. Contractors who work in both commercial and energy segments often carry higher limits as a result. This is generally advantageous for property managers and GCs hiring these vendors, but do not assume a vendor's limits: verify the COI against your specific requirements.

Large-scale construction. Texas has some of the largest commercial and industrial construction projects in the country. On these projects, owner and GC requirements routinely exceed $1M/$2M. Verify whether your project falls under a master agreement with higher limits.

Auto liability. Texas geography means contractors often drive significant distances between job sites. Auto liability of $1M combined single limit is standard, and for any vendor operating heavy vehicles or hauling materials, this should be a firm requirement.

Texas Department of Insurance role. TDI regulates insurers and insurance forms in Texas but does not set minimum coverage limits for private contracts. TDI's role is to ensure insurers operating in Texas are solvent and that policy forms comply with Texas law. The Texas Insurance Code and TDI regulations (28 Texas Administrative Code) govern how policies are issued, not what limits they must carry.

Texas Anti-Indemnity Rules and Additional Insured Enforcement

Texas Insurance Code Chapter 151, enacted in 2011, limits indemnity obligations in construction contracts. Under Chapter 151, a construction contract provision that requires a subcontractor to indemnify a general contractor or property owner for the general contractor's or owner's own negligence is void and unenforceable.

This directly affects additional insured coverage. The Texas Supreme Court in Energy Service Co. of Bowie v. Superior Snubbing Services (2007) held that the scope of additional insured coverage is determined by the contractual indemnity obligation the named insured assumed, not by the certificate of insurance or the endorsement language alone. If the underlying indemnity clause is limited by Chapter 151, the additional insured endorsement may not respond to claims arising from the additional insured's own negligence.

The standard ISO forms used in Texas are consistent with this framework. CG 20 10 provides additional insured coverage for ongoing operations, covering claims that arise from the named insured's active work. CG 20 37 extends this to completed operations. Both forms are enforceable in Texas, but the coverage they provide is limited to claims arising from the named insured's acts or omissions, not the additional insured's independent negligence. This is generally sufficient for most contractor relationships because the claims you face are typically vicarious liability: claims where the subcontractor's negligence is imputed to you, not claims where you were independently negligent.

Municipal Requirements in Texas Cities

Texas has multiple large cities with their own contractor insurance requirements. If your project is city work, the city's requirements control.

Houston. The City of Houston Legal Department, Risk Management Division publishes insurance requirements for city contractors. Minimums vary by project type but typically include $1M/$2M GL for service contracts and $2M/$4M for construction. Houston requires additional insured status naming the City of Houston and often requires that the city be named as certificate holder. Requirements are published on the city's website and updated periodically.

Dallas. The Dallas Purchasing Division sets insurance requirements for city vendors. Dallas uses a tiered system based on contract value and risk. Higher-risk contracts (construction, hazardous materials) have proportionally higher requirements. Dallas also requires that contractors comply with all applicable federal and state insurance laws.

Austin. The Austin Finance Department, Purchasing Office maintains contractor insurance requirements. Austin's requirements include standard coverages plus professional liability for design services and pollution liability for environmental work. Austin also requires that insurance be placed with carriers licensed in Texas or on the TDI-approved surplus lines list.

San Antonio and Fort Worth. Both cities publish requirements through their respective purchasing departments. San Antonio uses a standard insurance requirements document that contractors must submit as part of the bid package.

For any Texas municipal project, verify requirements directly with the city before submitting or accepting any COI. City requirements change, and a template that worked last year may not be current.

Texas Energy Sector Insurance Requirements

The Texas energy sector, concentrated in the Permian Basin, Eagle Ford Shale, and Gulf Coast refining corridor, sets its own insurance standards. These standards are relevant even if your work is commercial construction, because many Texas contractors split their time between commercial and energy projects.

Typical energy sector insurance requirements for contractors include:

  • General liability: $1M/$2M minimum, $5M+ for higher-risk operations
  • Contractual liability: coverage for liability assumed under the Master Service Agreement
  • Pollution liability: sudden and accidental coverage, $5M-$25M typical
  • Control of well: for drilling and well servicing contractors, limits based on well depth and pressure
  • Umbrella/excess liability: $5M-$25M standard, $50M+ for larger operators
  • Additional insured: operator and its working interest partners named on all liability policies
  • Waiver of subrogation: on all policies in favor of the operator group

These requirements are documented in the Master Service Agreement (MSA), and the COI must reference the specific MSA. The MSA governs insurance obligations for the duration of the contract, including after project completion.

Verifying Texas COIs: Practical Checklist

  1. Verify general liability limits against your contract requirements, with attention to per-occurrence and aggregate limits
  2. Check workers' comp status: if coverage is shown, verify limits are statutory; if no coverage, require documented non-subscriber acknowledgment
  3. Confirm additional insured endorsement is attached to the policy, not just noted on the certificate
  4. Verify your organization's exact legal name appears in the endorsement, matching your contract
  5. Check cancellation notice terms: Texas requires 10 days per 28 TAC §5.7014
  6. For energy sector vendors, verify reference to the specific MSA appears on the COI
  7. For municipal projects, confirm compliance with the city's current published requirements
  8. Track expiration dates independently, do not rely on insurer notification

COI File automates Texas-specific verification, including non-subscriber tracking and MSA reference validation. Start free with up to 5 vendors.

Frequently Asked Questions

Texas does not mandate specific coverage limits for private contracts. $1M/$2M general liability is the standard baseline in commercial contracts, and for most trades this is what you will see on a typical vendor COI. For state contracts, the Texas Department of Insurance sets requirements per agency, and these can range from $500K to $5M depending on the scope. Higher-risk trades, particularly oil and gas contractors and heavy construction, typically need $2M/$4M GL plus umbrella of $5M-$25M. Texas has a large energy sector, and energy companies set their own insurance standards that frequently exceed state minimums. If your vendor works for energy clients, their coverage limits will generally be higher than a vendor who only does commercial or residential work. Auto liability is also a key coverage in Texas given the geography: contractors often travel significant distances between sites, and $1M combined single limit is standard.
Texas is the only state where workers' compensation insurance is truly optional for private employers. No law requires a private employer to carry workers' comp coverage. This makes Texas fundamentally different from every other state when it comes to COI verification. However, the consequences of not carrying workers' comp are significant. A Texas employer who opts out of workers' comp becomes a non-subscriber. Non-subscribers lose key legal defenses in workplace injury lawsuits: they cannot argue that the employee's own negligence caused the injury, they cannot argue that a coworker caused the injury (the fellow servant doctrine), and they cannot argue that the employee assumed the risk of the work. In practice, a non-subscribing employer faces near-strict liability in employee injury cases. For property managers and GCs, this creates a significant risk: if you hire a subcontractor who is a non-subscriber, and one of their employees is injured on your project, that employee can sue you directly because your negligence may have contributed to the injury, and the subcontractor's status as a non-subscriber increases the likelihood and severity of litigation. Your best protection is to require either proof of workers' comp coverage or a signed non-subscriber acknowledgment that documents the vendor's opt-out and confirms they have an alternative injury benefit plan (many large non-subscribers carry occupational injury plans through companies like AIG or Zurich). Without one of these two documents, you are effectively uninsured for workplace injuries on your project.
Texas Insurance Code Chapter 151 limits indemnity in construction contracts and directly affects which additional insured endorsements are enforceable. Under Chapter 151, a construction contract cannot require a subcontractor to indemnify a general contractor or property owner for the GC's or owner's own negligence. This applies to both bodily injury and property damage claims. For additional insured endorsements, this means CG 20 10 (ongoing operations) is enforceable for claims arising from the subcontractor's active work. CG 20 37 (completed operations) may be partially restricted: courts have generally held that completed operations coverage for the subcontractor's faulty work is enforceable, but coverage that extends to the GC's own negligence after the subcontractor's work is complete may be limited. The Texas Supreme Court's decision in Energy Service Co. of Bowie v. Superior Snubbing Services established that a contractual indemnity obligation, not the certificate of insurance, determines the scope of additional insured coverage. Work with a Texas-licensed construction attorney on contract language that is consistent with Chapter 151 and maximizes enforceable additional insured coverage.
Yes. The oil and gas industry in Texas operates with insurance requirements that are substantially higher than standard commercial construction. Operators and large service companies typically require: $1M/$2M GL minimum (often $5M+ for higher-hazard operations like drilling and well servicing), contractual liability coverage, pollution liability for sudden and accidental releases (typically $5M-$25M), control-of-well coverage for drilling contractors (which protects against blowout losses and can reach $50M-$500M limits), and umbrella/excess liability of $5M-$25M. Additionally, many operators require the contractor to name the operator and its working interest partners as additional insureds on both ongoing and completed operations forms. Master Service Agreements (MSAs) govern insurance requirements in this sector, and the COI must reference the specific MSA by contract number. For property managers and GCs outside the energy sector, you are unlikely to see these requirements directly, but if a vendor splits their work between energy and commercial projects, their insurance program will be shaped by their energy clients' requirements, which is generally a good thing for your coverage.
Yes. Houston, Dallas, Austin, San Antonio, and Fort Worth each publish their own insurance requirements for contractors working on city projects. Houston, as the largest city, has detailed requirements published by the City of Houston Legal Department, Risk Management Division. Typical Houston city contract requirements include $1M/$2M GL for most services, $2M/$4M for construction, auto liability, workers' comp, and additional insured status naming the City of Houston. Dallas requirements are published by the Dallas Purchasing Division. Austin's requirements are available through the Austin Finance Department, and San Antonio's through the City Clerk. Each city uses slightly different forms and may require Texas-specific endorsements. For city projects, verify the current published requirements directly through the city's website or purchasing department. Requirements change periodically, and using outdated specifications can result in your contractor's COI being rejected by the city.
Texas requires insurers to provide at least 10 days notice before cancellation to certificate holders listed on the policy under Texas Department of Insurance rules (28 TAC §5.7014). This provides procedural protection, but in practice, it is not reliable: insurers may miss notification deadlines, especially for large commercial policies with dozens of certificate holders. Texas also follows the general principle that a certificate of insurance is evidence of coverage but does not itself confer coverage or modify the underlying policy. A certificate holder cannot rely on the COI alone if the actual policy does not provide the listed coverage. COI tracking software or manual monitoring of expiration dates is still the recommended approach. Texas does not have a statutory requirement for insurers to notify additional insureds of policy changes beyond cancellation, so coverage reductions or exclusions added mid-term may go unnoticed without proactive verification.

Sources & References

  • Texas Department of Insurance, Workers' compensation rules (28 TAC), cancellation notice regulations, and insurer licensing. tdi.texas.gov
  • Texas Insurance Code Chapter 151, Anti-indemnity limits in construction contracts. statutes.capitol.texas.gov
  • Texas Division of Workers' Compensation, Non-subscriber data, coverage verification, and employer compliance resources. tdi.texas.gov/wc
  • IRMI, Texas-specific risk transfer guidance and construction insurance analysis. irmi.com
  • City of Houston, Risk Management Division, Insurance requirements for city contractors. houstontx.gov
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Firdaosh Bano

COI Compliance Specialist

Firdaosh Bano is a COI compliance specialist and the founder of COI File. She spent 6 years managing vendor compliance for commercial properties - tracking 2,000+ COIs across 150+ properties in spreadsheets before building the tool she wished she'd had. She writes about certificate of insurance compliance, vendor risk management, and making insurance tracking less painful for small teams.

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