THIS WEEK'S DEEP DIVE
If you've spent any time talking to other contractors or looking at municipal permit applications, you've heard the word "bond" thrown around. The problem is that in Texas, bonding requirements vary significantly depending on what you do, where you work, and whether the project is public or private. Here's a clear breakdown.
TEXAS HAS NO STATEWIDE GENERAL CONTRACTOR LICENSE BOND
Let's start with what surprises most contractors new to the state: Texas does not require a statewide contractor license bond for general contractors. There is no single state agency that licenses general contractors or mandates a bond as part of that process.
This does not mean you can skip bonding entirely. It means the requirements are local — and they vary by city and county.
WHAT TDLR ACTUALLY COVERS
The Texas Department of Licensing and Regulation (TDLR) licenses specific specialty trades: Electrical contractors, HVAC (Air Conditioning & Refrigeration Contractors — TACL license), Plumbing contractors (licensed through the Texas State Board of Plumbing Examiners, under TDLR oversight), Irrigators and irrigation contractors, Water well drillers.
If you operate in one of these trades, you're dealing with TDLR. These licenses have their own insurance and financial responsibility requirements — typically insurance coverage rather than a surety bond. The most common bond figure associated with TDLR electrical contractors is $10,000. Verify your specific trade and license class directly at tdlr.texas.gov.
MUNICIPAL REQUIREMENTS: WHERE BONDING ACTUALLY LIVES
For general contractors in Texas, bonding requirements are set at the city and county level. What you'll commonly see as part of building permit registration: A $5,000 surety bond, OR a certificate of liability insurance with minimum coverage of $300,000.
Some municipalities set higher thresholds — bond amounts across Texas cities range from $5,000 to $50,000. Before you pull a permit in a new city or county, check with that permit office for their current requirements. Don't assume what applied in one city applies in the next.
PUBLIC WORKS: THE TEXAS LITTLE MILLER ACT
If you're bidding on public projects — city, county, or state work — bonding requirements are set by Texas Government Code Chapter 2253, known as the Texas Little Miller Act:
Performance bond required on public contracts exceeding $100,000. Payment bond required on public contracts exceeding $25,000.
These bonds protect the project owner and your subcontractors and suppliers. Miss this requirement on a public bid and you won't be considered.
WHY BONDING MATTERS BEYOND COMPLIANCE
A surety bond is not insurance for you — it's a guarantee to the client or project owner that you'll complete the work and pay your subs. If you default, the surety company steps in and can come after you for reimbursement.
Being bonded also signals to homeowners and commercial clients that you've been vetted. Many clients ask for proof of bonding before signing contracts, especially on projects above $50,000.
YOUR BONDING CHECKLIST FOR THIS WEEK
Confirm whether your trade requires TDLR licensure — tdlr.texas.gov. Check bonding and insurance requirements for every city you pull permits in — don't assume it's consistent across the region. If you work public projects, confirm you have both performance and payment bonds in place before bidding. Require your subs to carry appropriate insurance and get their certificates before work starts. Keep your bond current — lapses can get permits rejected and stop active jobs.
COMING MONDAY: Foundation warning signs that Texas homeowners miss — and what they mean for your clients' homes.
COMING THURSDAY: Managing subcontractors and liability — what every Texas GC needs to have in their subcontracts right now.
SPONSOR THIS NEWSLETTER: Reach Texas contractors — veteran and civilian — every Monday & Thursday. Founding sponsor spots available — header placement from $150/issue. Reply to this email or contact: [email protected]
THIS WEEK'S DEEP DIVE
If you've spent any time talking to other contractors or looking at municipal permit applications, you've heard the word "bond" thrown around. The problem is that in Texas, bonding requirements vary significantly depending on what you do, where you work, and whether the project is public or private. Here's a clear breakdown.
TEXAS HAS NO STATEWIDE GENERAL CONTRACTOR LICENSE BOND
Let's start with what surprises most contractors new to the state: Texas does not require a statewide contractor license bond for general contractors. There is no single state agency that licenses general contractors or mandates a bond as part of that process.
This does not mean you can skip bonding entirely. It means the requirements are local — and they vary by city and county.
WHAT TDLR ACTUALLY COVERS
The Texas Department of Licensing and Regulation (TDLR) licenses specific specialty trades: Electrical contractors, HVAC (Air Conditioning & Refrigeration Contractors — TACL license), Plumbing contractors (licensed through the Texas State Board of Plumbing Examiners, under TDLR oversight), Irrigators and irrigation contractors, Water well drillers.
If you operate in one of these trades, you're dealing with TDLR. These licenses have their own insurance and financial responsibility requirements — typically insurance coverage rather than a surety bond. The most common bond figure associated with TDLR electrical contractors is $10,000. Verify your specific trade and license class directly at tdlr.texas.gov.
MUNICIPAL REQUIREMENTS: WHERE BONDING ACTUALLY LIVES
For general contractors in Texas, bonding requirements are set at the city and county level. What you'll commonly see as part of building permit registration: A $5,000 surety bond, OR a certificate of liability insurance with minimum coverage of $300,000.
Some municipalities set higher thresholds — bond amounts across Texas cities range from $5,000 to $50,000. Before you pull a permit in a new city or county, check with that permit office for their current requirements. Don't assume what applied in one city applies in the next.
PUBLIC WORKS: THE TEXAS LITTLE MILLER ACT
If you're bidding on public projects — city, county, or state work — bonding requirements are set by Texas Government Code Chapter 2253, known as the Texas Little Miller Act:
Performance bond required on public contracts exceeding $100,000. Payment bond required on public contracts exceeding $25,000.
These bonds protect the project owner and your subcontractors and suppliers. Miss this requirement on a public bid and you won't be considered.
WHY BONDING MATTERS BEYOND COMPLIANCE
A surety bond is not insurance for you — it's a guarantee to the client or project owner that you'll complete the work and pay your subs. If you default, the surety company steps in and can come after you for reimbursement.
Being bonded also signals to homeowners and commercial clients that you've been vetted. Many clients ask for proof of bonding before signing contracts, especially on projects above $50,000.
YOUR BONDING CHECKLIST FOR THIS WEEK
Confirm whether your trade requires TDLR licensure — tdlr.texas.gov. Check bonding and insurance requirements for every city you pull permits in. If you work public projects, confirm you have both performance and payment bonds in place before bidding. Require your subs to carry appropriate insurance and get their certificates before work starts. Keep your bond current — lapses can get permits rejected and stop active jobs.
COMING MONDAY: Foundation warning signs that Texas homeowners miss — and what they mean for your clients' homes.
COMING THURSDAY: Managing subcontractors and liability — what every Texas GC needs to have in their subcontracts right now.
SPONSOR THIS NEWSLETTER: Reach Texas contractors — veteran and civilian — every Monday & Thursday. Founding sponsor spots available — header placement from $150/issue. Reply to this email or contact: [email protected]