“Fully insured” is a marketing phrase, not a coverage analysis. Before a contractor starts work, ask what policies exist, who is insured, whether the dates cover your project and what exclusions may matter.
Start with the certificate—but do not stop there
Ask for a current certificate of insurance (COI) naming the insurance carrier, policy numbers, effective dates and coverage limits. A certificate is evidence of stated coverage, not a guarantee that every accident or claim is covered. For large projects, confirm directly with the insurer or agent.
Commercial general liability (CGL)
CGL may respond to certain third-party bodily injury and property damage claims, subject to policy language, exclusions and limits. It is not a blanket warranty for defective workmanship, missed deadlines or every repair cost. Ask about per-occurrence and aggregate limits and any relevant exclusions.
Workers’ compensation in Texas
Do not assume every Texas private employer is required to carry workers’ compensation. Texas has an unusual system in which many private employers can choose whether to subscribe, subject to exceptions and contract requirements. Ask who will work on site, whether employees are covered, and how subcontractors are handled.
Commercial auto and specialty coverage
Vehicles used for work may require commercial auto coverage. Projects involving design advice, pollution, high-value materials or significant renovation risk may call for additional coverage or contract provisions. Ask an insurance professional what applies to your scope.
Subcontractors and the coverage gap
Find out whether the prime contractor uses subcontractors. Request proof of insurance from each relevant party and clarify who is responsible for damage, site safety and corrective work. Contract language and additional-insured endorsements may be appropriate for larger jobs; have a qualified professional review them.
Insurance versus licensing versus bonding
Insurance, professional licensing and bonds solve different problems. A contractor can have one without the others. Texas licensing varies by trade and locality, so verify electrician, plumber or HVAC licensing through the appropriate regulator and check local permit rules.
Red flags before signing
Watch for expired documents, inconsistent business names, vague coverage answers, cash-only pressure, unwillingness to document subcontractors or a contract that leaves responsibility unclear. Never rely on a verbal “we’re covered.”
A practical pre-job verification process
Match the business name on the contract to the insurance documents; confirm policy dates; document scope, schedule and change orders; identify permit responsibility; and keep the COI and signed agreement with your project records.
