Texas Doesn't License General Contractors. That Doesn't Mean Anything Goes.
A general contractor from California relocated to Austin, assumed no statewide licensing meant no requirements, and started bidding commercial tenant improvements. His first project owner asked for his Austin contractor registration, City of Austin building permits under his own license, and proof of insurance including workers' comp. He had none of it. The project went to a local competitor who had spent thirty minutes registering with the city and two hours getting proper insurance quotes.
Texas's approach to contractor regulation is fundamentally different from California, Arizona, or Nevada. There's no equivalent to the CSLB or ROC at the state level. But that vacuum is filled by a patchwork of municipal regulations, trade-specific state licenses, and insurance requirements that effectively create the same barriers to entry — just without a single agency overseeing it all.
What Texas Actually Requires
State-Level Trade Licenses (TDLR)
The Texas Department of Licensing and Regulation (TDLR) licenses specific trades that affect public safety:
| Trade | License Required | Governing Body | |-------|-----------------|----------------| | Electrical | Yes | TDLR | | Plumbing | Yes | Texas State Board of Plumbing Examiners | | HVAC/Air Conditioning | Yes | TDLR | | Fire Protection (Sprinklers) | Yes | State Fire Marshal | | Elevator Installation | Yes | TDLR | | General Contracting | No state license | Municipal registration varies |
If you're an electrician, plumber, or HVAC contractor, you need a state license regardless of which Texas city you work in. The license is valid statewide, and the licensing process includes examinations, experience verification, and insurance requirements.
Austin-Specific Requirements
The City of Austin requires contractor registration for most construction activities. Key requirements include:
- General contractor registration with the Austin Development Services Department
- Trade-specific permits for electrical, plumbing, and mechanical work
- Proof of insurance including general liability (minimum $300,000 but most projects require $1M+)
- Workers' compensation certificate or approved alternative
- Austin Energy coordination for any work affecting electrical service
Austin's registration process is straightforward but mandatory. Operating without registration can result in stop-work orders, fines, and inability to pull permits.
Williamson County Cities (Round Rock, Cedar Park, Georgetown)
Cities in Williamson County generally require:
- Business registration with the city
- Building permits for construction activity
- Proof of insurance on file or presented at permit application
- Trade licenses for regulated specialties
Georgetown and Round Rock have their own permitting departments. Cedar Park coordinates some permits through Williamson County. Requirements vary, so verify before starting work in any new municipality.
Workers' Compensation: Texas's Unique Approach
Texas is the only state in the nation where private employers can legally choose not to carry workers' compensation insurance. This "non-subscriber" option sounds attractive until you understand the consequences.
What Non-Subscribers Lose:
When a Texas employer opts out of workers' comp, they lose three critical legal defenses:
- Contributory negligence — You can't argue the employee's own carelessness contributed to the injury
- Assumption of risk — You can't argue the employee knew the job was dangerous
- Fellow servant doctrine — You can't blame a co-worker for the injury
Without these defenses, an injured employee can file a direct lawsuit against you. A single serious injury — fall from height, saw accident, vehicle collision — can produce a jury verdict that bankrupts your company and reaches your personal assets.
The Practical Reality:
Despite workers' comp being elective, most Austin-area contractors carry it because:
- General contractors require it from all subcontractors
- Commercial project owners include it in contract requirements
- Residential builders using automated verification platforms reject non-subscribers
- The liability exposure without it is catastrophic
We recommend workers' comp for every Texas contractor with employees. The premium is an investment in your survival.
Insurance as Your Professional Credential
In states with contractor licensing, your license is your primary credential. In Texas, your insurance fills that role. When a general contractor evaluates subcontractors, insurance documentation is often the first thing they review.
What Austin-Area GCs Typically Require:
- General liability: $1,000,000 per occurrence / $2,000,000 aggregate minimum
- Workers' compensation: Statutory limits with $1M employer's liability
- Commercial auto: $1,000,000 combined single limit
- Umbrella: $1,000,000-$5,000,000 depending on project size
- Additional insured endorsement naming the GC
- Waiver of subrogation in favor of the GC
- Primary and non-contributory language
Tech Sector Requirements (Austin-Specific):
Companies like Apple, Google, Meta, Oracle, and Samsung apply corporate vendor management standards to construction contractors. These requirements typically exceed standard GC requirements:
- General liability limits of $5,000,000 or higher
- Professional liability for any design-build component
- Cyber liability for projects involving data infrastructure
- Pollution liability for renovation work in occupied buildings
- Pre-qualification through platforms like Avetta, ISNetworld, or Veriforce
Building Permits and Inspections
Austin's Development Services Department has undergone significant modernization, but permit timelines remain a pain point for contractors. Understanding the process:
Residential permits typically process in 5-15 business days for straightforward projects. Complex projects or those requiring site plan review take longer.
Commercial permits involve plan review by multiple departments (building, fire, environmental, transportation) and can take 30-90 days depending on project complexity.
Inspection requirements — Austin inspectors expect contractors to have current insurance documentation available. While they don't inspect insurance certificates at every visit, complaints about uninsured contractors trigger investigation.
Common Mistakes Austin-Area Contractors Make
Assuming no license means no requirements. Texas's lack of statewide licensing creates a false sense of freedom. Municipal registration, trade licenses, permits, and insurance requirements still apply.
Skipping workers' comp to save money. The premium savings disappear instantly when an employee is injured and files a lawsuit. Non-subscriber liability is unlimited.
Carrying minimum coverage. Austin's construction market has evolved. The tech sector, commercial development, and high-end residential market all expect coverage exceeding state minimums. Minimum coverage locks you out of premium projects.
Not understanding city-to-city variations. Working in Austin, Round Rock, and Georgetown may require three different contractor registrations. Each city has its own permitting process and requirements.
Common Questions
Do I need a state license to be a general contractor in Texas?
No. Texas does not license general contractors at the state level. However, you need municipal registration in most cities, and specific trades (electrical, plumbing, HVAC) require state TDLR licenses.
Can I work in multiple Texas cities with one registration?
No. Each municipality has its own registration requirements. Working in Austin, Round Rock, and Cedar Park may require separate registrations with each city.
What happens if I get caught working without insurance in Austin?
The City of Austin can issue stop-work orders, fines, and revoke your contractor registration. More critically, if a claim occurs while you're uninsured, you're personally liable for all damages with no carrier to provide defense.
How quickly can I get set up to work in Austin?
With clean records and straightforward operations, we can typically bind insurance coverage within 24-48 hours. City of Austin contractor registration takes a few business days after that. Plan for about a week from initial contact to being fully operational.