Starting a cleaning or janitorial business in Texas? Here's something that catches most new owners off guard: Texas plays by different rules when it comes to insurance. Unlike the other 49 states, Texas doesn't require you to carry workers' compensation insurance. Sounds like a money-saver, right? Not so fast. Your clients don't care what Texas law says—they want to see proof of coverage before they'll let you near their property.
The reality is that insurance requirements for cleaning businesses in Texas come from two places: state law (which is surprisingly minimal) and your actual clients (who have very specific demands). Whether you're scrubbing office buildings or managing a team of house cleaners, understanding what coverage you truly need—versus what's technically optional—can save you from costly mistakes down the road.
What Texas Law Actually Requires
Let's start with the legal baseline. Texas doesn't require a state-level license specifically for cleaning services. If you're operating as a sole proprietor cleaning a few homes, you can literally start tomorrow with no special permits. However, once you serve more than one household or offer services that Texas considers taxable, you'll need a sales tax permit from the Texas Comptroller. The application process through the eSystems Portal typically takes two to three weeks.
Here's where Texas gets interesting: workers' compensation insurance is optional for private employers. You read that right. While 49 other states require workers' comp the moment you hire your first employee, Texas gives you a choice. You can operate as a "nonsubscriber" and skip this coverage entirely. But before you celebrate those premium savings, understand what that means. If you go the nonsubscriber route, you must file a DWC005 Notice of Non-coverage with the Texas Department of Insurance annually by the end of April. You also have to display notices of no-coverage prominently and give written statements to each new employee you hire.
The catch? You lose the liability protections that workers' comp provides. If an employee gets hurt on the job, they can sue you directly in civil court. And here's the thing about cleaning work—it's physically demanding. Slip-and-fall injuries, chemical exposure, repetitive strain injuries from mopping and vacuuming—these aren't rare occurrences. One serious injury lawsuit could wipe out a small business. That's why most insurance experts recommend carrying workers' comp even though Texas law doesn't force you to.
What Your Clients Will Actually Demand
This is where theory meets reality. Sure, Texas law is flexible. But try landing a contract with a commercial office building, hospital, or school district without workers' compensation insurance. It won't happen. Commercial clients routinely require minimum coverage amounts regardless of what state law says. They're protecting themselves, and you're the one who needs to meet their standards.
General liability insurance is non-negotiable if you want commercial work. The standard minimum is $1 million per occurrence and $2 million aggregate. This covers the obvious risks: you damage a client's property, someone slips on your wet floor, you accidentally break an expensive piece of equipment. For cleaning businesses in Texas, general liability runs between $400 and $1,500 annually depending on your team size. Solo operators typically pay $400 to $600. Small teams of two to five employees pay $600 to $1,000. Larger operations with six or more employees can expect $1,000 to $1,500 or more.
Commercial auto insurance becomes mandatory the second you use a vehicle for business purposes—transporting supplies, equipment, or employees. Your personal auto policy won't cover business use, and if you get into an accident while driving to a client site with a trunk full of cleaning supplies, you could be stuck with the full bill out of pocket.
Then there's bonding. Texas doesn't legally require janitorial bonds, but here's a stat that matters: 70% of commercial clients include bonding requirements in their cleaning service contracts. Healthcare facilities and financial institutions almost universally require bonds. A janitorial service bond protects clients against employee theft, typically with coverage amounts between $10,000 and $25,000. The cost is reasonable—usually $100 to $500 annually—but it's often the difference between getting a contract and losing it to a competitor who came prepared.
Breaking Down the True Costs
Let's talk real numbers. Workers' compensation in Texas is surprisingly affordable compared to other states. The average cost runs about $27 per month per employee—that's $324 per year per worker. Compare that to the national average of $75 per month ($900 annually), and you can see why Texas is attractive for cleaning businesses even when you choose to carry coverage voluntarily.
Your total insurance package for a small cleaning business might look like this: general liability ($600 annually for a small team), workers' compensation ($324 per employee), commercial auto ($1,200 to $2,400 depending on vehicles and drivers), and a janitorial bond ($300). For a solo operator with one employee and one vehicle, you're looking at roughly $2,500 to $3,500 in annual insurance costs. That's a real expense, but it's also the price of being able to bid on profitable commercial contracts.
One thing that can drive costs up quickly: your claims history. Insurance companies price based on risk, and if you've had multiple property damage claims or employee injuries, your premiums will reflect that. This is why investing in proper training and safety protocols isn't just good practice—it's good business. Fewer claims mean lower premiums year after year.
Special Situations and Exemptions
If you're operating as a sole proprietor with no employees, you're exempt from workers' compensation requirements—you can't buy coverage for yourself even if you wanted to. The same goes for business partners in a partnership or members of an LLC. You can choose to be excluded from coverage. Independent contractors you hire also don't count as employees for insurance purposes, though be careful here. Texas has specific criteria for who qualifies as an independent contractor versus an employee, and misclassifying workers can lead to serious legal trouble.
There's one situation where workers' comp stops being optional in Texas: government contracts. If you bid on cleaning contracts with state agencies, schools, or other government entities, you'll be required to carry workers' compensation coverage. No exceptions. This is spelled out clearly in most government RFPs and contract requirements.
How to Get Started With Coverage
The process of getting insured isn't complicated, but you'll want to shop around. Different insurers specialize in different types of businesses, and rates can vary significantly. Start by getting quotes from at least three providers. Look for insurers who understand the cleaning industry—they'll ask the right questions about your services, client types, and employee count to give you accurate pricing.
When you're getting quotes, be specific about your operations. Do you use specialized equipment? Do you work in high-rise buildings? Do you handle biohazard cleaning? All of these factors affect your risk profile and your premiums. Being upfront about your actual operations ensures you get coverage that actually protects you when you need it.
Once you have coverage, you'll receive certificates of insurance (COIs) that you can provide to clients. Keep digital and physical copies readily available—you'll be asked for them regularly, especially when bidding on new contracts. Most commercial clients want to see current COIs before they'll even consider your proposal.
Bottom line: Texas gives you flexibility, but your clients set the real requirements. Yes, you can legally operate with minimal insurance. But if you want to grow beyond residential work and compete for profitable commercial contracts, you'll need general liability, workers' comp, commercial auto, and likely a janitorial bond. The good news? Texas's competitive insurance market and low workers' comp rates mean you can get properly covered without breaking the bank. Start with solid coverage from day one, and you'll be positioned to say yes to opportunities as they come.
