Construction Claim Rules in Texas

Statutory interest rate

Prime rate, floor 5% / ceiling 15%

Floats monthly with the Federal Reserve's published prime rate, set on the 15th of each month for judgments the following month.

Compounding: Compounded annually

Citation: Tex. Finance Code §§ 304.003, 304.006

Source: https://codes.findlaw.com/tx/finance-code/fin-sect-304-003/

Last checked: 2026-08-25

Rate changes monthly; always check the current prime rate, don't reuse an old figure. Cross-checked the WSJ prime rate against the Federal Reserve's official H.15 release (federalreserve.gov/releases/h15/), dated August 25, 2026: current computed rate is approximately 6.75 (within the 5%/15% floor and ceiling)%. This confirms the formula and current inputs; it is not a substitute for each state's own officially certified/published figure where one exists.

Accrual: breach of contract claim

Common law: generally the earlier of 180 days after written notice of the claim, or the date suit was filed

Texas has no single statute for contract prejudgment interest; courts apply common-law rules and have generally followed the same 180-day-notice/filing-date framework Finance Code §304.104 sets for property damage (see below), even though that statute technically only covers wrongful death, personal injury and property damage claims.

Citation: Common law (e.g., Adams v. H&H Meat Products, Inc., 41 S.W.3d 762 (Tex. App. 2001)); rate range per Tex. Finance Code § 304.003

Source: https://law.justia.com/cases/texas/thirteenth-court-of-appeals/2001/11028.html

This is common law, not a fixed statute, so it's less predictable than the other states in this batch; confirm current treatment with counsel before relying on it.

Accrual: property damage / tort claim

Earlier of 180 days after written notice of the claim, or the date suit was filed

Not date of loss. Prejudgment interest accrues starting on whichever comes first: the 180th day after the defendant receives written notice of the claim, or the date the lawsuit is filed and runs as simple (non-compounding) interest until the day before judgment.

Citation: Tex. Finance Code § 304.104 (Ch. 304, Subch. B: wrongful death, personal injury, or property damage)

Source: https://law.justia.com/codes/texas/finance-code/title-4/subtitle-a/chapter-304/subchapter-b/section-304-104/

Texas is the outlier in this batch: sending a prompt written notice of claim can meaningfully change your accrual date here, unlike the pure date-of-loss states.

Actual Cash Value rule

Broad evidence rule

Courts weigh original cost, replacement cost, expert opinion and other relevant facts rather than a fixed depreciation formula.

Citation: Tolar v. Allstate Tex. Lloyd's Co., 772 F. Supp. 2d 825 (N.D. Tex. 2011); US Fire Ins. Co. v. Williams, 732 S.W.2d 57, 60 (Tex. App. 1987).

Source: https://www.propertyinsurancecoveragelaw.com/blog/calculating-actual-cash-value-part-4-texas/

RESEARCHED from scratch (prior entry flagged the controlling case as unconfirmed). Confirmed real: Texas courts define ACV as replacement cost less depreciation, treated as synonymous with fair market value; Tolar held that labor, contractor overhead/profit, and sales tax are all subject to depreciation as part of 'replacement costs' -- a notably contractor-unfriendly result relative to the ~15 states barring labor depreciation.

ACV statute or regulation

No Texas statute defines ACV or restricts labor depreciation; the law is unsettled and driven by conflicting federal court decisions applying Texas law plus a non-binding 1998 TDI bulletin.

Texas has no Insurance Code provision or adopted NAIC-model regulation that defines how ACV must be calculated or that restricts depreciating labor. TDI Commissioner's Bulletin B-0045-98 (1998) instructed insurers that ACV equals replacement cost with proper deduction for depreciation, and rejected excluding labor costs from the replacement-cost base merely because an insured had not yet incurred them, but a bulletin is sub-regulatory guidance, not a statute, and it does not squarely resolve whether labor may be depreciated once included. Federal courts applying Texas law have split: Tolar v. Allstate Texas Lloyd's Co., 772 F. Supp. 2d 825 (N.D. Tex. 2011) suggested labor is part of depreciable replacement cost, while Sims v. Allstate Fire & Casualty Insurance Co., 2023 WL 175006 (W.D. Tex. Jan. 11, 2023) and related 2023-2024 rulings found the undefined term actual cash value ambiguous and construed it against depreciating labor. Tex. Ins. Code Chapter 542A (enacted 2017, following Hurricane Harvey litigation including the Barbara Technologies case) governs first-party claim procedure, notice and attorney's fees for weather-related claims, but does not define ACV or address labor depreciation.

Citation: Tex. Ins. Code ch. 542A; TDI Commissioner's Bulletin B-0045-98; Tolar v. Allstate Texas Lloyd's Co., 772 F. Supp. 2d 825 (N.D. Tex. 2011); Sims v. Allstate Fire & Cas. Ins. Co., 2023 WL 175006 (W.D. Tex. 2023)

Source: https://www.tdi.texas.gov/bulletins/1998/b-0045-8.html

Chapter 542A is a prompt-payment and pre-suit notice statute, not an ACV-calculation statute, and no Insurance Code section or adopted regulation defines ACV for Texas. The labor-depreciation question remains open in the courts as of this research date.

Recoverable depreciation holdback

Texas statute addresses one specific condition on paying withheld recoverable depreciation: the insurer may require proof the deductible was paid first. No statutory deadline for release was found.

Tex. Ins. Code Section707.004 allows an insurer that issues a replacement-cost property policy to refuse to pay a claim for withheld recoverable depreciation or a replacement-cost holdback until it receives reasonable proof the policyholder paid the applicable deductible (a canceled check, money order receipt, credit card statement, or financing-arrangement copy). This statute governs a precondition to payment, not a deadline for release -- no Texas statute specifying a maximum holdback period or release timeline was found in this research.

Citation: Tex. Ins. Code Section707.004.

Source: https://statutes.capitol.texas.gov/Docs/IN/htm/IN.707.htm

RESEARCHED from scratch (prior entry was blank). Secondary sources note individual policies commonly set their own deadlines (often 180 days to 2 years from date of loss) for requesting the holdback, but that is a policy term, not a statutory requirement.

“No damages for delay” clause enforceability

Enforceable, but subject to four recognized exceptions

The Texas Supreme Court held that a no-damages-for-delay clause is an ordinary risk-allocation provision between commercial parties, not an exculpatory clause, needing no special conspicuousness to be enforced. It is nonetheless subject to four exceptions: delays not intended or contemplated by the parties to fall within the clause; delays caused by fraud, misrepresentation, or other bad faith; delays extending so unreasonably long that the delayed party would have been justified in abandoning the contract; and delays outside the specific categories the clause enumerates. The court declined to add a separate 'active interference' exception urged by the court of appeals below.

Citation: Green Int'l, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997)

Source: https://caselaw.findlaw.com/court/tx-supreme-court/1215756.html

Construction contract filing deadline

4 years for a written contract claim; separate 10-year statute of repose for construction improvements

Texas's residual limitations statute requires a suit be brought within 4 years after the cause of action accrues when no other specific period applies, which governs an ordinary written construction-contract breach claim. Separately, a claim against a person who constructs or repairs an improvement to real property (design/construction defect claims, not a payment dispute) must be brought within 10 years of substantial completion regardless of when the defect was discovered, with a shorter 8-year period for claims against a governmental entity and a 6-year period for residential construction backed by a qualifying written warranty; presenting a written claim during the period can extend it by 1-2 years.

Citation: Tex. Civ. Prac. & Rem. Code §§ 16.051 (residual 4-year period); 16.009 (10-year construction statute of repose)

Source: https://law.justia.com/codes/texas/civil-practice-and-remedies-code/title-2/subtitle-b/chapter-16/subchapter-a/section-16-009/

A straightforward payment/breach dispute uses the 4-year residual period; the 10-year repose period is a separate, longer-running cutoff aimed at defect claims and doesn't extend the ordinary 4-year window for a payment claim.

State unemployment insurance (SUTA)

For 2026, Texas unemployment tax rates range from a 0.32 percent minimum to a 6.32 percent maximum, with a taxable wage base of $9,000, the federal floor and one of the lowest wage bases in the country.

Texas Workforce Commission (TWC) sets employer tax rates as the sum of a General Tax Rate (experience-based), a Replenishment Tax Rate (0.21 percent for 2026), an Obligation Assessment Rate (0.00 percent for 2026), a Deficit Tax Rate (0.00 percent for 2026) and the Employment and Training Investment Assessment (0.10 percent). The minimum combined rate for 2026 is 0.32 percent and the maximum is 6.32 percent. The taxable wage base remains $9,000, the federal minimum, and has not changed in many years. TWC did not clearly state a single new-employer rate on the page reviewed; new employers are generally assigned a rate based on the average rate for their NAICS industry classification.

Citation: Tex. Labor Code Chapter 204

Source: https://www.twc.texas.gov/programs/unemployment-tax/your-tax-rates

Last checked: 2026-08-26

The specific 2026 new-employer rate figure was not directly confirmed on the TWC page reviewed; it should be reconfirmed on twc.texas.gov before publishing an exact number. Texas has no state income tax but does levy this unemployment tax; confirmed via TWC. Confirmed directly against the official Texas Workforce Commission rate page (twc.texas.gov).

Workers' compensation rating

Texas uses NCCI advisory rates through the Texas Department of Insurance, but workers' compensation coverage is optional for most private employers under the state's unique non-subscriber system.

Texas is an NCCI state for class codes and advisory loss costs, regulated by the Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC). Unlike nearly every other state, Texas does not require most private employers to carry workers' compensation insurance; employers may elect to be non-subscribers, in which case injured employees pursue negligence claims directly against the employer rather than through the workers' compensation system, and the employer loses common-law defenses. Non-subscriber employers must file a notice with the Division. Public-sector and some other employers still have mandatory coverage requirements.

Citation: Tex. Labor Code Chapter 406

Source: https://www.tdi.texas.gov/wc/employer/coverage.html

Prevailing wage law

Texas has a limited public-works wage statute under Government Code Chapter 2258 with no statewide minimum threshold, but it is decentralized: each contracting public body sets its own prevailing rate rather than a central agency, and some sources describe it as effectively unenforced.

Texas Government Code Chapter 2258 requires that workers on public works contracts (buildings, roads, bridges, water systems, and similar construction funded wholly or partly with public funds) be paid not less than the general prevailing rate of wages, with no minimum contract-value threshold stated in the statute itself. However, Texas does not centralize wage determinations the way most Little Davis-Bacon states do; each public body sets its own rate, typically by conducting a local wage survey or adopting federal Davis-Bacon rates. The U.S. Department of Labor's own state summary characterizes Texas as having no meaningful state prevailing wage statute in practice, reflecting this weak, decentralized enforcement structure, which creates some tension with the statute's text.

Citation: Tex. Gov't Code Chapter 2258

Source: https://texas.public.law/statutes/tex._gov't_code_title_10_subtitle_f_chapter_2258

Sources disagree on how meaningfully Texas's Chapter 2258 functions as a true prevailing-wage regime given its decentralized, public-body-by-public-body enforcement; this nuance should be confirmed with a construction-law attorney before being presented as a firm yes/no answer.

OSHA plan

Federal OSHA (no state plan)

Texas has no OSHA-approved state plan; both public and private employers fall under federal OSHA jurisdiction.

Citation: 29 U.S.C. § 667 (State Plan roster)

Source: https://www.osha.gov/stateplans

Weight of an OSHA violation in a negligence case

Evidence, not negligence per se

Proof of an OSHA violation is not enough on its own to automatically establish negligence in Texas, though it can be used as supporting evidence.

Citation: Wal-Mart Stores, Inc. v. Seale, 904 S.W.2d 718, 720 (Tex. App.-San Antonio 1995, no writ).

Source: https://case-law.vlex.com/vid/wal-mart-stores-inc-891237006

RESEARCHED from scratch (prior entry was a generic placeholder). Confirmed real and widely cited (including in Texas Supreme Court amicus briefing): OSHA standards do not establish negligence per se or a separate cause of action on their own, but are generally relevant and admissible as 'the cumulative wisdom of the industry on what is safe and what is unsafe.'

Third-party contribution against the employer

No traditional statutory-employer shield; Texas's subscriber/nonsubscriber election controls the whole framework, and proportionate-responsibility rules govern allocation among multiple defendants.

Whether a third-party claim against a GC/owner even matters the same way depends on whether the direct employer is a subscriber (strong immunity, third-party claims proceed largely independently) or a nonsubscriber (direct negligence exposure under a separate statutory regime).

Citation: Tex. Lab. Code §§401.001 et seq.; Tex. Civ. Prac. & Rem. Code ch. 33; HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009).

Source: https://law.justia.com/cases/texas/supreme-court/2009/2001368.html

Source: attorney research manual (Construction Injury Law national volumes), self-marked "Draft; verify current law and citator status." Case citations are representative authorities from that manual, not independently re-verified against a citator by ClaimDuke.

Injury-severity gate on contribution claims

There's no traditional "exception"; immunity turns entirely on subscriber election. A subscribing employer gets strong immunity; a nonsubscribing employer faces direct negligence liability under a separate statutory regime.

Tex. Lab. Code §§401.001 et seq., 408.001, 417.001; Tex. Civ. Prac. & Rem. Code ch. 33. Subscriber status is foundational: a subscribing employer generally receives strong immunity, while a nonsubscriber may face direct negligence liability under a different statutory regime.

Citation: Tex. Lab. Code §§401.001 et seq., 408.001, 417.001; Tex. Civ. Prac. & Rem. Code ch. 33.

Source: https://statutes.capitol.texas.gov/Docs/LA/htm/LA.406.htm

Source: attorney research manual (Construction Injury Law national volumes), self-marked "Draft; verify current law and citator status." Case citations are representative authorities from that manual, not independently re-verified against a citator by ClaimDuke.

Distinctive state doctrine

Texas's subscriber/nonsubscriber system is structurally different from every other state in this dataset; whether the employer even has workers' comp immunity is elective, not automatic.

A subscribing employer gets strong immunity like other states' exclusivity bar; a nonsubscribing employer instead faces direct negligence liability under a wholly separate statutory regime. No other state in this source works this way.

Citation: Tex. Lab. Code §§401.001 et seq., 408.001, 417.001.

Source: https://law.justia.com/codes/texas/2017/labor-code/title-5/subtitle-a/chapter-408/

Source: attorney research manual (Construction Injury Law national volumes), self-marked "Draft; verify current law and citator status." Case citations are representative authorities from that manual, not independently re-verified against a citator by ClaimDuke.