Checked against primary sources 2026-08-24

The insurance figures are in a rule, not in the act

People quote these numbers as statute. They are not statute, and the difference matters because a rule changes faster than an act does. Read 24 August 2026.

What the statute says

Tex. Occ. Code 1305.159(a)(2) has an applicant establish proof of financial responsibility in the manner prescribed by the executive director. That is the whole of it.

There is no dollar figure anywhere in Chapter 1305. The job is handed to the agency: under Tex. Occ. Code 1305.101(a)(1) the executive director or commission, as appropriate, shall by rule establish the financial responsibility requirements for electrical contractors.

What the rule says, and who it says it to

16 TAC 73.40(a) reaches three licenses, not one. Electrical contractors, electrical sign contractors and residential appliance installation contractors all carry the same minimum general liability coverages, maintained at all times, as proof of financial responsibility.

• 300,000 dollars per occurrence, combined for property damage and bodily injury.
• 600,000 dollars aggregate, the total the policy will pay for property damage and bodily injury.
• 300,000 dollars aggregate for products and completed operations.

Three numbers, and the third is the one people forget to check on a quote. A general liability policy can hit the first two figures and carry a products and completed operations aggregate well under 300,000, which is the shape of the near miss.

Two conditions on the policy that are easy to miss

The amounts are not the only thing the rule cares about. 16 TAC 73.40(e) also says where the coverage may come from: an admitted company, an eligible surplus lines carrier as defined in Texas Insurance Code Chapter 981, or an insurer rated B+ or higher by A.M. Best.

A cheaper policy from a carrier that clears none of those three tests is not compliant coverage no matter what the limits say on it.

Then 16 TAC 73.40(c) asks for the proof on an industry standard certificate of insurance carrying a thirty day cancellation notice. A certificate without that notice is the wrong document.

16 TAC 73.40(b) has the certificate filed with the department when you apply, again when you renew, and again whenever the department asks for it. 16 TAC 73.20(a)(2) says the same thing from the application side, which is a useful cross-check if an agent tells you the initial filing was the end of it.

Your customer can ask, and you answer

16 TAC 73.40(d) is a duty most contractors do not know they have. A licensed contractor furnishes the name of the insurance carrier, the policy number, and the name, address and telephone number of the insurance agent to any customer who requests it.

Any customer. There is no threshold on job size and no form to demand first.

Why the distinction is worth knowing

A statutory figure changes when the legislature meets. A rule figure changes when the commission adopts an amendment, which can happen between sessions and without a bill.

So the right habit is to check the rule rather than to trust a number you learned once, including this one. This page carries a date at the top for that reason.

16 TAC 73.40 has not been amended since 2010, so these figures are stable rather than volatile. Stable is not the same as permanent, and a number nobody has had to re-check in sixteen years is exactly the one a summary keeps printing after it moves.

Workers compensation is a separate question

Tex. Occ. Code 1305.159(a)(3) deals with workers compensation, and it gives three options: coverage through an insurer authorized to do business in Texas, self-insurance, or electing not to obtain coverage as Subchapter A of Labor Code Chapter 406 allows.

16 TAC 73.40(c) mirrors that on the paperwork side. Self-insurance is proved with a certificate of authority to self-insure, and an applicant who has elected not to carry coverage says so.

Electing out is lawful and it is not free of consequence. That is an insurance and employment question rather than a licensing one, and it is worth asking someone who does that for a living before you decide.

What this page cites

• 16 TAC 73.40 The minimum coverages at (a), the filing duty at (b), the certificate and workers compensation options at (c), the customer disclosure at (d), and the carrier standard at (e). Read in full 24 August 2026. source
• 16 TAC 73.20 Applicant requirements, including proof of general liability insurance with the initial and renewal contractor application.
• Tex. Occ. Code 1305.159 Financial responsibility at (a)(2) and workers compensation at (a)(3), neither carrying a figure.
• Tex. Occ. Code 1305.101 The executive director or commission establishes the financial responsibility requirements by rule.