If you're running a plumbing business in Texas, you're operating in one of the most business-friendly states in the country—but that doesn't mean you can skip insurance. Texas has specific requirements for plumbing contractors, especially if you hold a Responsible Master Plumber designation. Here's what might surprise you: while Texas doesn't require most businesses to carry workers' comp (it's actually the only state where it's optional), the state is very specific about general liability coverage for licensed plumbers. Let's break down exactly what you need to know.
Understanding Texas Plumbing Licensing and Insurance
The Texas State Board of Plumbing Examiners oversees all plumbing licensing in the state. If you want to operate as a plumbing contractor, you need a Responsible Master Plumber (RMP) designation. This isn't just a nice-to-have credential—it's the legal requirement for running a plumbing business independently.
To get your RMP designation, you'll need to hold a master plumber license, complete the RMP training course, submit proof of insurance, and register your business with the state board. The application fee is $225, and here's the catch: you cannot receive your RMP designation without proof of insurance. The state board won't even process your application until that Certificate of Insurance is uploaded.
Good news for journeyman plumbers looking to advance: starting September 1, 2025, the experience requirement to qualify for a master plumber license dropped from four years to just two years. This makes it faster to move up the licensing ladder and eventually operate your own business.
The $300,000 General Liability Requirement
This is the big one. Every Responsible Master Plumber in Texas must carry commercial general liability insurance with a minimum coverage of $300,000 for all claims arising in any one-year period. This isn't a suggestion—it's a state mandate to maintain your license.
The coverage must protect against claims for both property damage and bodily injury, whether the claim comes from negligence or a contract dispute. Think about what this protects you from: a water line you installed bursts and floods a client's newly renovated kitchen. Or someone slips on water at a job site and breaks their arm. Without proper liability coverage, you're personally on the hook for tens or hundreds of thousands in damages.
Your insurance must cover all types of plumbing work you perform under your RMP license. If you do liquefied petroleum gas plumbing, medical gas installations, or multipurpose residential fire protection sprinkler work, your policy needs to explicitly include those specialties. Don't assume your basic policy covers everything—verify with your insurance agent that your Certificate of Insurance reflects all the work you do.
Your Certificate of Insurance expires on the date your insurance policy expires, so you'll need to keep this current every year when you renew your RMP designation. The good news? There's no fee to update your COI with the state board—you just need to upload the new certificate through their online licensing system.
Workers' Compensation: Optional but Critical
Here's where Texas is unique: workers' compensation insurance is voluntary for most private employers. Texas is literally the only state in the country where you can choose not to carry it. But before you celebrate the cost savings, understand what you're giving up.
If you operate as a "non-subscriber" (meaning you don't carry workers' comp), your employees retain the full right to sue you for workplace injuries. In other states, workers' comp provides a trade-off: employees get guaranteed medical coverage and wage replacement, while employers get protection from lawsuits. In Texas, if you skip workers' comp and an employee gets hurt, you're exposed to potentially unlimited liability. A single serious injury could bankrupt your business.
There are also exceptions where workers' comp becomes mandatory. If you take government contracts, you must provide workers' comp coverage for employees working on those projects. Some municipalities also require it as a condition of professional licensing. Even if the law doesn't require it, many general contractors and commercial clients will require you to carry workers' comp before they'll hire you.
If you choose to operate without workers' comp, you must file an annual notice with the Texas Department of Insurance Division of Workers' Compensation, post notices in your workplace, and inform new employees in writing that they're not covered. The paperwork isn't complicated, but it's required.
For plumbing contractors specifically, workers' comp is strongly recommended even though it's not mandatory. Plumbing is physical work with real injury risks—lifting heavy fixtures, working in tight crawl spaces, exposure to hot water and chemicals. The question isn't whether injuries will happen, it's when. Most experienced contractors consider workers' comp an essential business expense, not an optional one.
What This Means for Your Business
Let's get practical about costs and compliance. The $300,000 general liability requirement is your baseline—the absolute minimum to maintain your RMP license. But most plumbing contractors carry $1 million in coverage because that's what commercial clients expect. The cost difference between $300,000 and $1 million in coverage is often minimal, and the additional protection is worth it.
When you're getting quotes, make sure your agent understands the full scope of your work. If you do specialized plumbing like medical gas systems or fire sprinklers, those need to be explicitly included. Don't assume a standard plumbing contractor policy covers everything. Ask for a Certificate of Insurance that lists all the types of work you perform, because that's what you'll submit to the state board.
Remember that your insurance renewal dates and your RMP renewal need to align. Your RMP designation must be renewed annually, and you can't let your insurance lapse even for a day. Set calendar reminders 30 days before your policy expires so you have time to shop around if needed and upload your new Certificate of Insurance to the state board.
Getting Started with Your Coverage
If you're just starting your plumbing business or need to update your insurance, start with getting quotes from insurers who specialize in contractor coverage. General business insurers often don't understand the specific requirements for Texas plumbing contractors, which can lead to gaps in coverage or paying for coverage you don't need.
Get at least three quotes and compare not just the premium but what's actually covered. Ask about deductibles, exclusions, and what happens if you need to file a claim. The cheapest policy isn't always the best value, especially if it makes you jump through hoops when you actually need coverage.
Once you have your Certificate of Insurance, you can upload it directly through the Texas State Board of Plumbing Examiners' online licensing system. The process is straightforward—you'll verify your contact information, upload the COI, and pay the $225 RMP registration fee. Allow a few business days for processing before you start taking jobs under your RMP designation.
The bottom line: proper insurance isn't just a regulatory checkbox for Texas plumbing contractors. It's the foundation of a sustainable business. The $300,000 general liability requirement protects your license, while workers' comp (even though it's optional) protects your business from potentially devastating lawsuits. Get the coverage right from the start, and you can focus on what you do best—running a successful plumbing business.
