The Texas Department of Licensing and Regulation requires contractors to secure a bond as part of the application process to obtain a license. The bond ensures that contractors provide construction work and will abide by the state laws and ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations.
For example, contractors in Dallas need a paving bond of $10,000 to operate legally in the city. This bond safeguards the city of Dallas and its residents, providing a financial safety net if the contractor fails to meet their contractual obligations or violates any laws or regulations.
While there is no statewide bonding requirement for contractors in Texas, many cities in the state do mandate posting a contractor license bond.
Below, you'll find a pricing table outlining the various options for contractor bonds in Texas, categorized by county level.
Specialized contractors in certain trades, such as plumbers, electricians, and HVAC technicians, are required to obtain a Texas contractor license. They must meet specific requirements and pass a state-issued test.
Furthermore, fire sprinkler installers, well drillers, mold remediation contractors, and companies installing elevators and escalators also need to carry a state license.
It's important to note that even if you don't consider yourself an electrician, plumber, or HVAC technician, if you offer services in those trades, you'll still need to obtain the necessary license to perform those tasks.
Texas Electrical Contractor License
In the state of Texas, electrical work is defined as any work involved in setting up, maintaining, or expanding an electrical wiring system and related equipment.
Electrician licensing is regulated by the Texas Department of Licensing and Regulation (TDLR). There are 11 different licenses available, some tailored to specific types of electrical businesses such as maintenance or sign electrical work. The 11 licenses are:
There are exemptions to the licensing requirements. This includes people who are involved in agriculture, mining, railroads, irrigation systems, etc. To learn more about the exemption, refer to the Exemptions to Electrician Licensing page.
Texas Plumbing Contractor License
The Texas State Board of Plumbing Examiners (TSBPE) is in charge of licensing. There are four types of licenses available for application.
Similar to electrical licensing, HVAC and refrigeration licenses are managed by the TDLR. The TDLR provides both technician licenses and contractor's licenses. If you want to run your HVAC business independently, you'll need the contractor's license.
To qualify for a contractor's license in HVAC and refrigeration, you need either 48 hours of practical experience in related work under a licensed contractor's supervision or hold a technician certification for the past 12 months and have 36 months of practical experience.
However, some exemptions exist for taking the test. These include:
There's also an exemption for those employed by industrial operations, which doesn't apply if you plan to operate independently.
You'll also need to choose a class designation for your license. Class A allows you to work on any size unit, while Class B permits you to work on cooling systems up to 25 tons and heating systems up to 1.5 BTUs an hour.
To apply, you must be 18 years old and submit a completed application to the TDLR with a fee of $115. Once approved, you'll be contacted to take the exam. If you pass and receive a license, you'll need to renew it annually.
After passing the exam, you must meet specific insurance requirements:
*Per Occurrence for Property Damage and Bodily Injury: This means that the insurance will help you pay for the damage or injuries that happen in one accident or event.
**Aggregate for Property Damage and Bodily Injury: This means that your insurance policy will help you pay for all the damage or injuries that happen during a specific time, like a year.
***Aggregate for Products and Completed Operations: This means your insurance policy will help you pay for any problems that happen because of things you made or services you completed.
You need a contractor license bond for contracting in the following Texas counties: Abilene, Addison, Alamo Heights, Amarillo, Beaumont, Bedford, Big Spring, Bowie, Cibolo, El Paso, Flower Mound, Fort Worth, Galveston, Granbury, Groves, Haltom City, Horizon City, Houston, Hurst, Iowa Park, Irving, Kerrville, Kilgore, Kirby, Lake Ransom Canyon, Lakeway, Longview, Lubbock, Lumberton, Merkel, Mesquite, Midland, Nederland, Odessa, Olmos Park, Port Arthur, Port Neches, Ransom Canyon, San Antonio, Sherman, Tyler, Universal City, Waco, White Oak, and White Settlement, and Wichita Falls.
The Texas Department of Licensing and Regulation (TDLR) oversees various occupations, businesses, facilities, and equipment. Chapter 51 of the Texas Occupations Code establishes TDLR's responsibilities.
Texas Department of Licensing and Regulation
P.O. Box 12157
Austin, Texas 78711
Main phone number: (512) 463-6599
Hours of operation: 8 am to 5 pm Monday through Friday, excluding holidays
For minor repair jobs that typically include only one person, no bond/license is required. Contractors who do these jobs are officially categorized as "handypersons." The State of Texas does not require handypersons to be licensed or bonded.
Here's a quick rundown on a handyman vs. a general contractor:
The specific rules of classifying a contractor as a handyman vs. a general contractor vary by county.
In Texas, licensing is not as strict as in some other states, but the state still takes it seriously. The Texas Department of Licensing and Regulation (TDLR) and Texas State Board of Pharmacy (TSBPE) investigate complaints of unlicensed contracting and may impose fines and legal charges on violators. If you work without a required license as an electrician, plumber, or HVAC contractor, it's considered a Class C misdemeanor*. Additionally, you may face administrative fees from TDLR and TSBPE.
*In Texas, a Class C misdemeanor is the least serious type of crime. If convicted of a Class C misdemeanor, you won't face any jail time, but you may be fined up to $500.