Customers ask if you''re bonded and insured. Contracts require it. But what do those words actually mean — and what coverage does a Texas contractor actually need to back them up?
What Does "Bonded and Insured" Actually Mean for a Contractor?
You've seen it on truck decals, websites, and business cards across the DFW area: "Licensed, Bonded & Insured." Customers ask about it before hiring. Commercial contracts require it. HOAs and property managers demand proof before you set foot on a job site.
But what do those words actually mean — and what does a Texas contractor actually need to back them up?
At McKnight Insurance Services in Mansfield, we work with contractors across the Dallas-Fort Worth area every day — tree service companies, pool builders, general contractors, landscapers, and trades of all kinds. Here's a plain-language breakdown of what bonded and insured means, why it matters, and what you need to carry.
"Insured" — What It Actually Means
When a customer or contract asks if you're insured, they're almost always asking about general liability insurance.
General liability (GL) covers:
- Third-party property damage — you or your crew accidentally damages a customer's property during the job. A tree limb falls on a fence. A pool excavator clips an irrigation line. A painter knocks over a fixture. GL pays for the damage.
- Third-party bodily injury — a customer, bystander, or visitor is injured because of your work or your presence on the property. GL covers their medical bills and any resulting legal costs.
- Completed operations — a claim that arises after the job is done. A pool deck cracks six months after installation. A tree falls that you pruned last season. Completed operations coverage extends your GL protection past the day you pack up.
What Limits Should You Carry?
Most commercial contracts and property managers in the DFW area require at minimum:
- $1,000,000 per occurrence / $2,000,000 aggregate
The Certificate of Insurance (COI)
When a customer, GC, or property manager asks for proof of insurance, what they want is a certificate of insurance — a one-page summary of your coverage showing your carrier, policy number, limits, and effective dates. Your agent can issue one quickly. If the contract requires it, they can also add the customer or property owner as an additional insured, which extends your GL coverage to protect them directly.
"Bonded" — What It Actually Means
A surety bond is not insurance. It's a three-party financial guarantee involving:
The bond guarantees that you will fulfill your contractual obligations. If you don't — if you fail to complete a job, cause financial harm, or have an employee steal from a customer — the bonding company pays the claim up to the bond limit. Unlike insurance, the bonding company then seeks reimbursement from you. A bond protects the customer; it does not protect the contractor.
Types of Bonds Texas Contractors Encounter
License and permit bonds are required by some Texas municipalities and licensing boards before you can pull permits or operate legally. Plumbers, electricians, and certain other licensed trades may need one. These are typically small bonds ($5,000–$25,000) and relatively inexpensive to carry.
Contractor license bonds are required by some cities and counties in the DFW area — Mansfield, Arlington, Fort Worth, and others may have their own requirements depending on the trade and scope of work.
Performance bonds guarantee that you'll complete a project according to the contract terms. These are common on larger commercial projects and public work. They're priced as a percentage of the contract value (typically 1–3%) and require underwriting.
Payment bonds guarantee that you'll pay your subcontractors and suppliers. Often paired with performance bonds on commercial and government projects.
Fidelity bonds (also called employee dishonesty bonds) protect customers against theft or dishonest acts by your employees. These are common for service businesses that work inside homes — cleaning companies, in-home service contractors, and similar trades.
Why the Distinction Matters for Contractors
Here's the practical difference:
| Situation | Covered By | |---|---| | Your crew accidentally breaks a customer's window | General liability insurance | | A customer trips over your equipment and is injured | General liability insurance | | An employee steals from a customer's home | Fidelity bond | | You fail to complete a job and the customer loses money | Performance bond | | A completed job causes damage months later | GL completed operations | | Your truck hits another vehicle on the way to a job | Commercial auto insurance | | A crew member is injured on the job | Workers' compensation |
Being "bonded and insured" means you have both pieces in place — but the specific coverage that matters depends entirely on what happened.
What a Complete Contractor Insurance Program Looks Like
For most contractors in the DFW area — whether you're doing tree work in Mansfield, building pools in Southlake, or running a general contracting crew across Tarrant County — a complete program includes:
- General liability — the foundation; required by most contracts and customers
- Commercial auto — every vehicle used for business needs to be on a commercial policy
- Workers' compensation — strongly recommended even though Texas doesn't mandate it; without it, injured employees can sue you directly
- Inland marine — covers tools, equipment, and materials in transit or on job sites
- Surety bond — type and amount depends on your trade, license requirements, and contract obligations
- Commercial umbrella — adds limits above your GL and auto for larger exposures
Serving Contractors Across Mansfield, DFW, and All of Texas
McKnight Insurance Services is based in Mansfield, Texas, and we work with contractors of all kinds throughout the Dallas-Fort Worth area — Tarrant County, Johnson County, Ellis County, and beyond. Tree service companies, pool builders, general contractors, landscapers, trades of every kind.
We're an independent agency. We don't work for one carrier — we shop your coverage across multiple companies to find the program that fits your trade, your contracts, and your budget. And when a customer or GC asks for a COI, we turn it around fast.
Ready to get properly covered?
Call or text 817.277.6166, or start your application online. We'll walk through what your contracts require and make sure your coverage actually backs up what's on your truck.