Hiring the wrong commercial contractor in Texas can cost you months of delays, change orders you didn't budget for, and in the worst cases — unpermitted work you have to tear out and redo. This checklist covers the 10 things every commercial client should verify before signing a contract.
1. Verify Applicable Texas Licenses
Texas requires state licenses for electrical contractors (TDLR), plumbing contractors (TSBPE), and HVAC contractors (TDLR). If your project involves these trades, verify the license number on the state agency websites before signing anything. Don't accept a copy of a license — look it up yourself at tdlr.texas.gov or tsbpe.texas.gov.
2. Confirm Current General Liability Insurance
Require a Certificate of Insurance (COI) naming your business as an additional insured. For commercial projects, general liability should be at least $1,000,000 per occurrence and $2,000,000 aggregate. An outdated or inadequate policy puts your property at risk if something goes wrong.
3. Verify Workers' Compensation Coverage
In Texas, workers' comp is not technically required for all employers — but if your contractor's workers are injured on your property and they don't carry workers' comp, you could be liable. Always require workers' comp coverage or a written waiver explaining the contractor's Texas opt-out status.
4. Check Their Commercial Project History
Ask for 3 references from commercial projects similar in type and scope to yours — completed in the last 2 years. Call the references and ask specifically: did the project finish on time, on budget, and were there any significant issues with quality or communication?
5. Confirm They Pull Their Own Permits
In Texas, the contractor performing the work should pull the building permit — not the property owner. If a contractor asks you to pull the permit yourself, that's a red flag. Licensed contractors pull permits under their own license.
6. Get a Detailed Written Bid — Not a Verbal Quote
Your bid should include: itemized scope of work, specific inclusions and exclusions, material specifications, labor breakdown, payment schedule, and project timeline. A one-page quote with a single total number is not a commercial bid — it's an invitation to disputes.
7. Verify Their Business Entity Exists
Search the contractor's business name on the Texas Secretary of State website (sos.state.tx.us) to confirm they're a registered entity in good standing. A contractor operating under a fictitious name with no registered entity has no legal accountability if things go wrong.
8. Understand the Payment Schedule
Never pay 100% upfront. A standard commercial payment schedule is 10–15% mobilization, then progress payments tied to completion milestones, with 10% retained until final punch list completion and certificate of occupancy. Be wary of contractors who demand large upfront payments.
9. Clarify Who Is Managing Subcontractors
On most commercial projects, the GC manages licensed subcontractors (electricians, plumbers, HVAC). Make sure your contract clearly states who is responsible for subcontractor coordination, scheduling, and quality control — and that subcontractors are also licensed and insured.
10. Get Lien Waivers at Each Payment
Texas has strong mechanic's lien laws. Require a conditional lien waiver from your GC and all major subcontractors at each payment milestone. Without lien waivers, subcontractors who weren't paid by your GC can place liens on your property — even if you paid the GC in full.
The Easier Way: Use a Pre-Verified Platform
BidBridge Texas does the heavy lifting on items 1–3 and 7 before any contractor can receive your project. Every contractor on the platform has been verified for applicable Texas licenses, insurance, and commercial experience. Post your commercial project free and get matched with 3 pre-vetted GCs in 48 hours.