Texas licenses air conditioning and refrigeration contractors, and the license carries an insurance rule that splits by class. This guide quotes what the state and five big cities say, as of October 2026, and links the source for each. I am a landlord and a cost estimator, not an agent or an attorney. Nothing here tells you what to buy or what limits to carry.
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What the Texas statute says
The Texas Department of Licensing and Regulation (TDLR) licenses air conditioning and refrigeration contractors under Occupations Code Chapter 1302. Section 1302.102 is titled Insurance Requirements and reads:
(a) The commission by rule shall set insurance requirements for a license holder under this chapter. (b) The executive director may waive the insurance requirements for a license holder who does not engage in air conditioning and refrigeration contracting for the public.
Section 1302.260(a) says TDLR issues a license to an applicant who, among other things, “provides evidence of insurance coverage required by rule in accordance with this chapter.”
What the state rule says
The rule is 16 Texas Administrative Code Section 75.40, titled Contractor Insurance Requirements. The link goes to the Legal Information Institute copy of the Texas Administrative Code. Subsection (a) covers Class A:
Class A licensees must maintain commercial general liability insurance at all times during a license period: (1) of at least $300,000 per occurrence (combined for property damage and bodily injury); (2) of at least $600,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage); and (3) of at least $300,000 aggregate for products and completed operations.
Subsection (b) covers Class B:
Class B licensees must maintain commercial liability insurance at all times during a license period: (1) of at least $100,000 per occurrence (combined for property damage and bodily injury); (2) of at least $200,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage); and (3) of at least $100,000 aggregate for products and completed operations.
The class decides the equipment a license holder may work on. Section 1302.253 says a Class B license covers a system of “not more than: (1) 25 tons cooling capacity; or (2) 1.5 million British thermal units per hour output heating capacity.” A Class A license has no such size limit.
Subsections (c) and (d) cover the insurer and the filing:
(c) Insurance must be obtained from an insurance provider authorized to sell liability insurance in Texas pursuant to the Texas Insurance Code.
(d) A license applicant or licensee must file with the department a completed certificate of insurance or other evidence satisfactory to the department when applying for an initial license, changing a business name or affiliation, and upon request of the department.
Subsections (e) and (f) cover the waiver:
(e) Requests to waive the insurance requirements because the license holder does not contract with the public must: (1) be submitted in writing to the department; and (2) contain a detailed explanation of the conditions under which the waiver is requested.
(f) A licensee who has received a waiver of insurance cannot perform or offer to perform air conditioning and refrigeration contracting under his license with the general public.
Subsection (g) gives customers a right to ask:
A licensee or an air conditioning and refrigeration contracting company must furnish the name of the insurance carrier, policy number, name, address, and telephone number of the insurance agent with whom the licensee or company is insured to any customer who requests it.
Our guide to which Texas trades must carry liability insurance by law reads this rule next to the electrical, plumbing, and elevator rules. Note that the rule applies to license holders. Technicians who work under a contractor are registered or certified under a separate part of Chapter 1302, and Section 75.40 does not name them.
What the big cities say
Section 1302.303(a) lets a city set its own standards, within limits: “A municipality may by ordinance adopt and enforce standards for air conditioning and refrigeration contractors that are consistent with the standards established under this chapter.” Here is what each of the five cities published, as I read it in October 2026. These are city web pages and forms, which can change without notice. Confirm with the permit office before you rely on any of them.
San Antonio. The Development Services mechanical page lists “Certificate of Insurance or Proof of Liability Insurance” for registering a state license. Under Certificate of Liability Insurance Requirements it says:
Certificate of Liability Insurance with the City of San Antonio listed as the Certificate Holder issued by an insurance company authorized to do business in the state, certifying that the applicant is insured to the limits of: at least $300,000 public liability insurance per occurrence and $300,000 property damage liability insurance per occurrence
It then adds a note that points back to the state rule:
NOTE: Insurance amount requirements for State issued Air Conditioning and Refrigeration Licenses class A or B of any endorsement shall be regulated by the Texas Department of Licensing and Regulation (TDLR) section 75.40 of the Administrative Rules.
Houston. The registration page for a state air conditioning license lists, among the items to provide:
A copy of the certificate of insurance bearing the licensee’s business affiliation. The licensee’s name and license number must also appear on the certification as “insured” or “additional insured”. The Certificate Holder information should be as follows: City of Houston Mechanical Section P.O. Box 2688 Houston, TX 77252-2688
The page gives no dollar amount.
Dallas. The city’s mechanical contractor registration form, revised 1/18/18, asks the license holder to bring the form, the A/C pocket license, photo identification, and payment. It lists no insurance item. It says: “Mechanical Certificates of Registration provided for in this code, expire when the State license expires.” The form is dated, and I have not confirmed that Dallas has no other insurance requirement for mechanical contractors.
Fort Worth. The contractor registration application marks some contractor types with “*Insurance Required” and “**Insurance and Bond Required.” Mechanical carries neither mark. That is the form’s own marking. I have not read a Fort Worth ordinance that sets an air conditioning insurance amount.
Austin. The contractor registration page says “License registration renewals and insurance updates for existing mechanical, electrical, plumbing, and irrigation registrations are also available in person.” It names no insurance amount for mechanical contractors. I have not confirmed whether Austin’s code of ordinances sets one, so ask Building and Trade Contractor Services.
What a certificate of insurance is
A certificate of insurance, or COI, is a one-page summary of a policy that the insurance agent prepares and sends to whoever asked. It is a document, not coverage. Our guide to what a certificate of insurance is and how to read one goes through the ACORD 25 field by field and covers what Texas Insurance Code Chapter 1811 says a certificate can and cannot do.
For an air conditioning contractor, the requests come from several directions:
- TDLR, under Section 75.40(d), when a license is first issued, when the business name or affiliation changes, and on request.
- A city permit office, such as Houston’s Mechanical Section or San Antonio’s Development Services, which name the city as certificate holder.
- A general contractor or homebuilder hiring the air conditioning contractor as a subcontractor.
- A property manager or building owner who wants proof on file before the work starts.
- A customer, who can use Section 75.40(g) to ask for the carrier, policy number, and agent.
If you own rentals, the contractor’s policy is the contractor’s. It sits beside yours, and our guide to commercial general liability coverage shows what that kind of policy is built to do. Ask a licensed agent how any of this applies to your job.
Want a licensed Texas agent to call you?
Leave your name and number. We pass your request to one licensed Texas insurance agency, and that agency calls you back. PolicyCompared does not sell insurance.