Carpentry Contractor Insurance In Texas

Running a carpentry business in Texas involved more than just construction work. Whether you are a framer, a cabinet maker, or a finish carpenter, you face unique risks every time you step onto a job site. If a heavy shelf you installed collapses or a helper gets injured by a saw, your business could face financial ruin without the right protection.

This guide breaks down exactly what insurance Texas carpentry business needs, how much it typically costs, and the specific requirements you will face from cities and general contractors.

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The Essential Coverages

Most carpentry businesses in Texas need a standard set of policies to protect against lawsuits, theft, and employee injuries. Here is what you need to know.

General Liability Insurance

This is the foundation of your insurance package. It protects your business if you cause injury to a third party (like a client) or damage their property.

• What it covers: Bodily injury and property damage. For example, if you are carrying a bundle of 2x4s and accidentally swing around and break a client’s expensive window, this policy pays for the window.
• The "Products & Completed Operations" Clause: This is the most critical part for carpenters. It covers damage that happens after you leave the job site. If you install kitchen cabinets today, but they fall off the wall three months later and crush a granite countertop, this coverage pays for the damages.
• Standard Limits: Most contracts will require you to carry $1,000,000 per occurrence and $2,000,000 aggregate.

Workers’ Compensation

• Texas is unique as the only state allowing private employers to "opt out" of the state-mandated workers' compensation system. Employers who choose this path are legally defined as "non-subscribers." While opting out might save on premiums, it carries significant legal risks under the Texas Labor Code.
• Legal Requirements to Opt Out: You cannot simply ignore the requirement. To be a legal non-subscriber, you must file DWC Form-005 annually with the Texas Department of Insurance and provide written notice to all employees.
• Loss of Common Law Defenses: If you opt out and an employee sues you for an injury, the law strips you of your primary legal defenses. You cannot argue in court that:
  • The employee was negligent (contributory negligence).
  • The employee assumed the risk of the job.
  • A fellow employee caused the injury.
• The Financial Consequence: Without these defenses, if a jury finds you even 1% at fault for an injury (like a saw accident or a fall), you could be liable for 100% of the damages. Unlike workers' comp, which has caps, a lawsuit can force you to pay for unlimited pain and suffering and punitive damages.
• Getting Hired: Most reputable General Contractors (GCs) will not hire a framing or finish carpentry subcontractor who does not have a true workers' comp policy. They rely on the "exclusive remedy" protection of workers' comp to prevent lawsuits from moving up the chain to them.

Commercial Auto Insurance

If you drive a truck to haul lumber, tools, or crew members, a personal auto policy is rarely enough.

• Personal vs. Commercial: Personal car insurance usually excludes business use. If you get into an accident while driving to a job site with a ladder rack and tools in the back, your personal insurer will likely deny the claim.
• Required Limits: To get onto most commercial job sites, you will need a policy with a $1,000,000 Combined Single Limit (CSL).

Inland Marine (Tool Coverage)

Your tools are your livelihood. Inland Marine insurance covers your equipment when it is moving between job sites or stored in your truck.

• Theft Protection: Carpentry tools are high-theft items. If your trailer is broken into and your compressors, nail guns, and saws are stolen, this policy provides the funds to replace them so you can get back to work.

License-Specific Insurance Requirements

Unlike plumbers or electricians, Texas does not have a statewide license for general carpentry. This means there is no state law forcing you to carry insurance just to call yourself a carpenter.

However, that does not mean you are off the hook. You will still face strict requirements from two sources:

• City Registration: Many cities, such as Austin, San Antonio, and Dallas, require contractors to register with the city to pull building permits. To register, you generally must provide proof of General Liability insurance.
• Common Requirement: $300,000 to $1,000,000 General Liability policy.
• General Contractors: If you work as a subcontractor, the General Contractor hiring you will dictate your insurance. They will not let you start working until you send them a Certificate of Insurance (COI) proving you have General Liability and often Workers' Comp.

Estimated Annual Costs

How much will this cost you? Insurance rates vary based on your revenue, payroll, and the type of carpentry you do. Rough framing is generally more expensive to insure than finish carpentry because the risk of injury is higher.

Below are estimated annual premiums for a small carpentry business in Texas with roughly $150,000 in payroll and $500,000 in revenue.

Real-World Claim Examples

To help you understand why this coverage matters, here are a few realistic scenarios a Texas carpenter might face:

1. The Cabinet Collapse (General Liability)

You install a set of heavy upper cabinets in a custom kitchen. Two months later, the fasteners fail because they were not anchored effectively into the studs. The cabinets crash down, destroying the expensive stove below and cracking the tile floor.

Result: Your General Liability "Completed Operations" coverage pays for the new stove, and the floor repairs.

2. The Table Saw Injury (Workers' Comp)

An apprentice on your crew is cutting trim and their hand slips, resulting in a severe laceration that requires surgery and physical therapy.

Result: Workers' Compensation pays for the medical bills and the employee's lost wages while they recover. Because you have this insurance, the employee typically cannot sue you for negligence.

3. The Stolen Trailer (Inland Marine)

You leave your tool trailer parked at a job site in Houston overnight. When you return in the morning, the lock is cut and $15,000 worth of saws, drills, and compressors are gone.

Result: Your Inland Marine policy cuts you a check for the value of the tools (minus your deductible), allowing you to buy new gear and finish the job.

Best Insurance Companies for Texas Carpenters

Finding the right carrier matters. You want a company that understands construction risks and handles claims fairly.

• The Hartford: The a long time standard for small-to-medium finish or cabinet carpentry shops. Their "Business Owner's Policy" (BOP) is great for bundling General Liability and Tool coverage at a very competitive price, making it an easy "one-stop" shop.
• Chubb: ideal for most finish carpenters or cabinet builders. Chubb is a premium carrier known for superior coverage terms and handling complex, high-value claims that other standard carriers might dispute.
• LandesBlosch: A highly specialized construction insurance brokerage in Texas. They are an excellent choice if you need a custom plan; they work with multiple carriers to negotiate terms specifically for contractors, ensuring you don't pay for coverage you don't need.
• EMC Insurance: A strong small and mid-market option that offers a specific "Artisan Contractors" program. They are particularly well-regarded for their safety and loss control services, which can help growing carpentry businesses keep their premiums down over time.
• Berkley Aspire: The go-to solution for higher hazard risks such as residential framing. If your business has a history of claims, or if you do high-risk work that standard carriers reject, Berkley Aspire specializes in "Surplus Lines" and can often write a policy when no one else will.

By securing the right insurance, you protect the business you have worked hard to build. Don't wait for an accident to happen before checking your coverage.