Washington general contractor license and insurance requirements

Washington general contractor license and insurance requirements

Matt Crawford
By Matt Crawford
Dec 14, 2023
1 min read

If you plan to start a small business as a general contractor, you’ll need to get a Washington state general contractor license. Once you do, you’ll be registered in Washington’s verified contractor platform, where customers can find and hire you for projects.

Licensed general contractors in Washington can perform most types of construction work, including remodeling, repairing and demolition. However, the Washington State Department of Labor & Industries requires additional licensing and exams for specialty contract work such as plumbing, electrical, asbestos and a few other areas.

In this article, we’ll go over:

Washington State contractors license requirements

There are several steps you will need to take to obtain your Washington contractor license.

1. Determine your business structure. Are you operating as a sole proprietor, LLC, partnership or corporation?
2. Choose a business name. Check to see if the name is already in use and file a Doing Business As if needed.
3. Apply for a business license. Once you have taken those steps, you can apply for and pay the registration fee for your Washington Business License.
4. Purchase a surety bond. The bond’s amount is based on the type of license you’re applying for.
5. Purchase business insurance. Most contractors are required to carry general liability insurance. This will protect your business in the case of property damage.

Keep in mind, that your bond and insurance must use your exact business name. The Labor & Industries department must be listed as a certificate holder on your liability insurance.

Once you complete those steps, you can submit your application to your local Labor & Industries office, which can also notarize your documents.

How to get a general contractor license

In order to avoid hiccups in the process, here is a quick checklist of the paperwork you need before you go to your Labor & Industries office for notarization:

  • Your business registration
  • Proof of your surety bond
  • Your Social Security Number, Federal Employee ID Number and/or Unified Business Identifier
  • Proof of your general liability insurance coverage. You can get this instantly when you purchase coverage with NEXT with our digital certificate of insurance.
  • A business mailing address. P.O. boxes are not accepted.
  • If you’ve ever been a registered contractor before, you’ll need to disclose any past registration info. This includes past business names and registration numbers.
  • If you plan on hiring employees, you’ll need proof of workers’ compensation insurance

Once you have this information, complete a Construction Contractor Registration application. You must bring your application, payment and documents to a Labor and Insurance office. You can schedule an appointment ahead of time.

Washington contractor license types

The most important step in getting your Washington state contractor license is to determine which type of license you will need.

General contractors are defined as able to perform or supervise multiple building trades or crafts. They can also hire subcontractors within multiple specialties. The surety bond for general contractors is $12,000.

Specialty contractors can only perform work in their registered specialty, and they can’t hire subcontractors. The Washington State Department of Labor and Industries has 63 specialties that require registration and will require exams. The surety bond for specialty contractors is $6,000.

How long does it take to get a Washington contractor license?

If you have all of the above paperwork prepared when you go to the Labor & Industries office for notarization, the process to get your contractor license shouldn’t take very long. Expect to activate your registration about three to five days after receipt of your application.

Once you are registered, your business will be listed in the Labor & Industries verified database, and you will receive a registration card within two weeks.

Insurance requirements for Washington general contractors

General contractors need to have several types of business insurance in Washington to operate. Here’s an overview of the required policies and some other common options for contractors.

General Liability insurance

General liability insurance is a requirement for general contractors. You will need to be covered for:

  • At least $200,000 in public liability and $50,000 in property damage
  • OR a $250,000 combined single limit

In addition to being a requirement, having general liability insurance is just a good idea for your business. General liability can protect you from expenses if someone other than you or an employee is hurt, as well as help pay for damage to someone else’s property, in the event your business is held responsible.

Learn more about general liability for contractors.

Workers’ Compensation insurance

If you hire employees or subcontractors, you are also required by state law to have workers’ compensation. Workers’ comp is a safety net that can help pay for costs associated with workplace injuries. Workers’ compensation can cover medical expenses and lost wages up to your insurance policy limit if you or an employee are hurt on the job. It can also shield you from liability after an accident.

Washington is a monopolistic state, meaning employers must purchase workers’ comp through the state — The Washington State Department of Labor and Industries. In monopolistic states, workers’ compensation insurance does not include employer’s liability insurance, which is usually included in a private insurance carrier’s workers comp product. This coverage can be purchased separately and paid for by employers to help protect against the costs of lawsuits from workers injured on the job.

Learn more about Workers’ Comp for construction workers.

Commercial Auto insurance

Driving a vehicle without liability insurance is unlawful in Washington. Your insurance must have the minimum coverages of:

  • $25,000 of bodily injury of 1 person in any 1 accident.
  • $50,000 of bodily injury per accident
  • $10,000 of injury for destruction of property

Any vehicles owned or used by your contracting business should be covered with commercial auto insurance. If you or your employees are involved in an accident, it can provide coverage for emergency care, medical bills, property damage, vehicle damage and legal fees.

Other common contractor coverages

Tool and equipment insurance covers theft, damage, repairs and replacements. If you work at multiple locations, tools and equipment coverage will protect your equipment financially. You can add this coverage to your general liability insurance to cover repair and replacement costs for your gear, from allen keys to wrenches — and all the compressors in between.

Errors and omissions insurance covers you if you’re accused of not doing your work properly, whether true or not. If someone believes you didn’t fulfill the promised services, they can demand a rework. Your insurance will help pay for costs to defend your business or fix the problem.

Surety bond requirement for Washington general contractors

A contractor surety bond is an agreement between three parties. You, the contractor, pay a fee to have a surety bond provider guarantee your contract with your customer.  A bond is like an added level of insurance on your coverage plan. It guarantees a payment amount if certain conditions are (or aren’t) met in a contract you’ve signed.

Washington contractors must have surety bonds to operate. The amount depends on the type of license you have:

  • General Contractors: $12,000
  • Specialty Contractors: $6,000 (one specialty trade only)

NOTE: On July 1, 2024, bond requirements will increase to $30,000 for general contractors and $15,000 for specialty contractors.

How NEXT works with general contractors in Washington

NEXT is 100% dedicated to helping self-employed construction professionals and small businesses get the right business insurance at an affordable price.

You can get a quote, purchase coverage and access the certificate of insurance you need for your Washington contractor license in a few minutes with our easy online process.

If you have any questions, our licensed, U.S.-based insurance advisors are standing by to help.

Get your instant quote today.

Are you interested in becoming a general contractor in another U.S. state? Learn what states require general contractor licenses in our summary of general contractor license requirements.

This information has been provided as a service. It is correct and up-to-date to the best of our knowledge; however, it is in no way intended to offer legal advice and you must always consult with local authorities before you make any business decisions. Regulations and requirements may change at any time.

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Matt Crawford
About the author

Matt Crawford leads NEXT's content team. He's a small business insurance specialist and has worked with business owners throughout his career as a community journalist and content marketer.

You can find him at one of his many favorite local restaurants in the San Francisco Bay Area when he's not at work.

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