Texas has a state insurance rule for locksmith companies. It sits in the Private Security Act, Chapter 1702 of the Occupations Code, and the Texas Department of Public Safety (DPS) runs the program through its Private Security Program. This guide quotes each rule as written, as of October 2026, then explains what a certificate of insurance is and who asks for one. I am a landlord and a cost estimator, not an agent or an attorney. This guide reports what the rules say. It does not tell you what to buy.
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Who the license covers
Texas licenses the company, not only the person. Occupations Code Section 1702.102 says:
Unless the person holds a license as a security services contractor, a person may not: (1) act as an alarm systems company, armored car company, courier company, guard company, or locksmith company; (2) offer to perform the services of a company in Subdivision (1); or (3) engage in business activity for which a license is required under this chapter.
Section 1702.1056 says what makes a business a locksmith company:
A person acts as a locksmith company for the purposes of this chapter if the person: (1) sells, installs, services, or maintains, or offers to sell, install, service, or maintain, mechanical security devices, including deadbolts and locks; (2) advertises services offered by the company using the term “locksmith”; or (3) includes the term “locksmith” in the company’s name.
Subsection (b) of that section says it “does not apply to a hotel, as that term is defined by Section 156.001, Tax Code.”
What the insurance rule says
Section 1702.124, titled Insurance Requirement, is the core of it. Subsection (a) reads:
An applicant is not eligible for a company license unless the applicant provides as part of the application: (1) a certificate of insurance or other documentary evidence of a general liability insurance policy countersigned by an insurance agent licensed in this state; or (2) a certificate of insurance for surplus lines coverage obtained under Chapter 981, Insurance Code, through a licensed Texas surplus lines agent resident in this state.
Subsection (b) says what the policy has to pay for:
The general liability insurance policy must be conditioned to pay on behalf of the company license holder damages that the company license holder becomes legally obligated to pay because of bodily injury, property damage, or personal injury, caused by an event involving the principal, or an officer, agent, or employee of the principal, in the conduct of any activity or service for which the company license holder is licensed under this chapter.
Subsection (c) names the numbers:
The insurance policy must contain minimum limits of: (1) $100,000 for each occurrence for bodily injury and property damage; (2) $50,000 for each occurrence for personal injury; and (3) a total aggregate amount of $200,000 for all occurrences.
Subsections (e) and (f) cover the certificate itself:
An insurance certificate executed and filed with the department under this chapter remains in effect until the insurer terminates future liability by providing to the department at least 10 days’ notice of the intent to terminate liability.
In addition to the requirements of this section, an applicant or company license holder shall provide and maintain a certificate of insurance or other documentary evidence of insurance sufficient to cover all of the business activities of the applicant or company license holder related to private security.
Those are the statutory minimums for the license. They are not a recommendation for any business. Your agent sizes a policy to your work.
What happens if the insurance lapses
Section 1702.123 is short:
(a) A company license holder shall maintain on file with the department at all times the surety bond and certificate of insurance required by this chapter. (b) The commission shall immediately suspend the company license of a company license holder who violates Subsection (a).
Section 1702.3841 adds a criminal penalty:
(a) A person commits an offense if the person is subject to Section 1702.124 and knowingly fails to provide and maintain a certificate of insurance or other documentary evidence of insurance sufficient to cover all of the business activities of the person related to private security. A person is presumed to have acted knowingly for purposes of this subsection if the person received reasonable notice from the department and an opportunity to provide or maintain the documentation required by Section 1702.124 and failed to do so. (b) An offense under this section is a Class A misdemeanor.
What DPS says the documents must show
DPS adds detail in its rules. 37 Texas Administrative Code Section 35.27, the DPS rule titled Insurance, reads in subsection (a):
To comply with the Act’s requirements relating to documentary evidence of insurance coverage, the documents submitted to the department must specifically show: (1) That the insurance is applicable to the conduct for which the licensee is licensed; (2) The exclusions or endorsements specific to the activity for which the licensee is licensed, or that there are no such exclusions or endorsements; and (3) The statutory minimum coverage limits, specifically distinguishing the limits for: (A) Each occurrence of bodily injury and property damage; (B) Each occurrence of personal injury; and (C) The total aggregate amount of coverage for all occurrences.
Subsection (d) of the same rule:
Pursuant to the Act, failure to maintain on file with the department evidence of current insurance coverage as required under this chapter will result in immediate suspension of the license. The suspension will become effective upon receipt of the notice.
Individual locksmiths
Section 1702.2227 defines an individual locksmith. The insurance sections quoted above speak of a “company license,” and I did not find a separate insurance rule for an individual in them. If you work for a licensed company, ask DPS how the company’s certificate applies to you. The program page is at dps.texas.gov.
Cities
State law limits what a city can add. Occupations Code Section 1702.134 says a company license holder or an employee of a company license holder is not required to obtain an authorization, permit, franchise, or license from, pay another fee or franchise tax to, or post a bond in a municipality to perform a service authorized under the chapter (Source). On October 31, 2026, I searched the Houston and Austin codes of ordinances on Municode for the word locksmith. Houston returned no results. Austin returned one, a section on transformer vaults that has nothing to do with locksmiths. I found no city locksmith insurance rule in either code. I could not run the same search on the Dallas, Fort Worth, or San Antonio codes, so this guide says nothing about those three. Check the permit office where the work happens.
What a certificate of insurance is
A certificate of insurance, or COI, is a one-page summary of your policies that your agent prepares and sends to whoever asked. The Texas Insurance Code, in Section 1811.152, says a certificate is not a policy and does not amend, extend, or alter the coverage of the policy it references. Our guide to the certificate of insurance for Texas contractors walks through the form field by field and covers what it cannot prove.
Who asks a new locksmith business for one
DPS asks first. Section 1702.124 wants the certificate with the license application, countersigned by a licensed Texas agent.
After the license, the asking comes from customers. Property managers ask vendors for proof of coverage before work starts, because a vendor can cause an injury or a loss on a managed property. The same logic applies to a general contractor who brings a locksmith onto a job. None of that is a state rule. It comes from the contract. For the other Texas trades that do carry a stated rule, read which Texas trades must carry liability insurance by law.
Read the form, not the brochure.
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.