HVAC contractor insurance in Texas

What a Texas ACR contractor license makes you carry

Texas puts a liability minimum inside the HVAC license. If you hold an air conditioning and refrigeration (ACR) contractor license, you must keep commercial general liability in force at all times, and the minimum depends on your license class.

Who licenses HVAC work in Texas

The Texas Department of Licensing and Regulation (TDLR) runs the ACR program under Occupations Code chapter 1302. All non-exempt ACR work has to be provided through a TDLR-licensed contractor. The contractor license comes in two classes:

• Class A: equipment of any size or capacity, for the work your license is endorsed for.
• Class B: systems of 25 tons of cooling or less, or 1.5 million BTU per hour of heating output or less.

Every contractor license also carries one or both endorsements: environmental air conditioning, or commercial refrigeration and process cooling or heating. A shop that services walk-in coolers and reach-ins as well as split systems should check that its endorsements match the work it sells.

Your techs need their own credential. Nobody may act as an ACR technician in Texas without a TDLR registration or certification, and that credential is good statewide. The contractor license covers the business; the technician registration follows each person in the van.

The liability minimums, class by class

Under 16 TAC 75.40, the floor looks like this:

• Class A: $300,000 per occurrence for bodily injury and property damage combined, a $600,000 aggregate, and a $300,000 aggregate for products and completed operations.
• Class B: $100,000 per occurrence, a $200,000 aggregate, and a $100,000 aggregate for products and completed operations.

Completed operations is the slice of a GL policy for damage that appears once the job is done, like a condensate line that backs up a month after start-up and stains a ceiling. The rule gives it a separate minimum, so check that line on your declarations page, not only the per-occurrence limit.

The insurer must be authorized to sell liability coverage in Texas. You file the certificate with TDLR when you apply for your first license, when you change your business name or affiliation, and whenever TDLR asks for it. Any customer who asks must be given the insurance carrier's name, the policy number, and the agent's name, address and phone number. How certificates of insurance work for HVAC shops

There's no license bond in the ACR rules, and TDLR doesn't ask for workers' comp proof to issue the license. Confirm the current requirement with TDLR before each renewal: TDLR's Air Conditioning and Refrigeration program.

The city layer and federal refrigerant rules

The license is statewide, but cities still issue mechanical permits. Houston, for example, makes you register your TDLR license with the city before it will issue you a permit to alter an existing system. Anyone who opens a refrigerant circuit in Texas also needs federal EPA Section 608 certification, as in every other state. EPA 608 basics for HVAC business owners

Texas workers' comp and the non-subscriber choice

Workers' comp is a choice for most private Texas employers. Shops that carry it are "subscribers." Shops that don't are "non-subscribers," and that choice comes with filings and lawsuit exposure.

• Notices: A non-subscriber tells the Division of Workers' Compensation in writing on DWC Form-005. It's due between February 1 and April 30 each year, within 30 days of hiring your first employee, within 10 days of ending coverage, and within 10 days of a request. You also give employees written notice and post notices at the shop.
• Lost defenses: When an injured tech sues a non-subscriber, three defenses are off the table: the tech's own contributory negligence, assumption of risk, and a fellow employee's negligence. The statute still lets you argue that the tech was intoxicated or meant to cause the injury.
• Public work: A governmental entity that signs a building or construction contract must get the contractor's written certification of comp for each employee working that project. Each sub hands its own coverage certificate up the chain. That reaches the mechanical sub on a county building as surely as the GC.

The ACR license doesn't ask for comp proof, so nothing on the TDLR side forces the decision. Your own crew does. Attic work in August, ladder falls and back strains from carrying condensers are the claims a subscriber hands to its comp carrier and a non-subscriber pays for in court. Some non-subscribers buy occupational accident coverage instead. It isn't workers' comp, so it doesn't make you a subscriber or restore those defenses. Read TDI's employer guide to workers' comp coverage, then compare both paths with us. Workers' comp for HVAC contractors

Texas risks that shape an HVAC premium

Two Texas risks sit at opposite ends of the thermometer, and a third comes from the comp choice itself.

Attic heat with no state heat rule

Texas has no state heat standard. HB 2127, passed in 2023, also blocks cities from enforcing their own rules, including the construction water-break ordinances Austin and Dallas had on the books, and in July 2025 a Texas appeals court reversed the 2023 ruling that had struck the law down. OSHA proposed a federal heat rule on August 30, 2024; as of October 2026 it still isn't final. That leaves each shop to run its own heat plan for attic and rooftop work. A heat illness case lands on workers' comp, or on you as a non-subscriber.

Hard freezes and carbon monoxide

The Department of State Health Services confirmed 246 deaths from the February 2021 winter storm. Nineteen were carbon monoxide poisonings, including cases where ice blocked the vents of gas heating equipment. When a freeze fills your board with no-heat calls, every furnace, flue and heat pump you touch that week becomes completed work that can be examined later.

How a CO claim plays out depends on your GL wording. Some GL policies sold to contractors attach a total pollution exclusion or the carrier's own CO exclusion, and state courts have split on whether CO is even a pollutant. Before you buy, have us point to the exact lines in the quoted policy that would govern a CO claim, and tell you whether pollution liability should back it up.

An injured tech at a non-subscriber shop

For a non-subscriber, a tech who falls through an attic or collapses from heat isn't a comp claim. It can turn into a negligence lawsuit against the business, argued without the three defenses Texas takes away. Your general liability policy won't step in, because standard GL excludes bodily injury to your own employees. If you stay a non-subscriber, know exactly what would pay that suit before it's filed.

Texas cities where we insure HVAC contractors

What drives HVAC insurance cost in Texas

Two Texas rules shape the quote before we look at anything else on the application.

• Your license class. A Class A shop starts from a $300,000 / $600,000 / $300,000 floor; a Class B shop from $100,000 / $200,000 / $100,000. Most commercial work calls for higher limits than either, and higher limits cost more.
• Your comp decision. A subscriber pays comp premium. A non-subscriber trades that premium for DWC filings, lost defenses in a lawsuit, and comp certificates it still needs for any public job.
• Your endorsements. If your TDLR license carries the commercial refrigeration endorsement and you service walk-ins and reach-ins, carriers typically rate that work under a separate commercial refrigeration class, apart from heating and air conditioning. Tell us your rough split of revenue between the two.

What you pay depends on your payroll by class code, your annual revenue, your mix of installation and service work, residential versus commercial jobs, the vans you run, your claims history and the limits you pick. Before anything is priced, a licensed agent goes over your answers with you. For published ranges, see what HVAC insurance costs.

Texas agency licensing

HVAC Insurance Group is a brand of The Allen Thomas Group, licensed in Texas (License #3256838, NPN 7642818). Requests from the Gulf Coast to the Panhandle get the same treatment: a licensed agent reads each one before anything goes to market.