Washington
Contractor Insurance

Beyond core requirements, several specialized policies address risks unique to construction work. The coverage you need depends on your trade, project types, and business assets.

Commercial Auto and Fleet Insurance

Personal auto policies exclude vehicles used primarily for business. If your truck hauls materials between jobsites, you need commercial auto coverage. This becomes more complex when you operate multiple vehicles or employ drivers.

Fleet policies cover all company vehicles under one policy, simplifying administration and often reducing costs compared to insuring vehicles individually. Hired and non-owned auto coverage protects you when employees use personal vehicles for work tasks or when you rent equipment. Washington's weather creates additional driving hazards: icy mountain passes and wet coastal roads contribute to higher accident rates during certain seasons.

Inland Marine: Protecting Tools and Equipment

Standard property insurance covers your office and permanent structures. It typically excludes tools and equipment that move between locations. Inland marine insurance fills this gap, protecting portable assets wherever they travel.

Tool theft remains a significant problem on Washington jobsites. A comprehensive inland marine policy can mean the difference between replacing stolen equipment quickly and halting operations while you scramble for funds.

Professional Liability and Errors & Omissions

General liability covers physical damage, but what about mistakes in your professional judgment? Professional liability, sometimes called errors and omissions coverage, protects against claims arising from design flaws, specification errors, or faulty recommendations.

Design-build contractors face particular exposure here. If your design causes a structural problem discovered years later, professional liability responds where general liability won't. Architects and engineers carry this coverage routinely, and contractors increasingly need it as project delivery methods blur traditional role boundaries.

Operating legally in Washington requires more than just purchasing insurance. You must register properly and maintain documentation proving ongoing compliance.

Department of Labor & Industries (L&I) Registration Process

All contractors must register with L&I before advertising services or bidding projects. The registration process requires proof of your contractor's bond, liability insurance, and workers' compensation coverage or exemption. You'll also need to pass an examination demonstrating knowledge of Washington construction law.

Registration renews every two years. Letting your registration lapse, even briefly, can result in fines and project delays. Many contractors set calendar reminders 90 days before expiration to ensure smooth renewals. L&I maintains a public database where project owners can verify your current registration status: keeping this information accurate protects your reputation.

Maintaining Minimum Liability Limits

Your insurance certificates must show coverage meeting or exceeding state minimums. When policies renew or change, you're responsible for updating your registration with current documentation. Gaps in coverage can trigger automatic suspension of your contractor license.

Project contracts often require you to name owners, general contractors, or lenders as additional insureds on your policies. Your insurance provider should issue these certificates promptly. Delays in providing proof of insurance can cost you projects, so work with responsive agents who understand construction timelines.

Your premiums reflect how insurers assess your risk profile. Understanding these factors helps you manage costs while maintaining adequate protection.

Claims history carries significant weight. Contractors with multiple claims pay substantially more than those with clean records. The types of claims matter too: a pattern of similar incidents suggests systemic problems that insurers want to avoid. Your experience modification rate for workers' comp directly reflects this history.



Trade classification affects base rates. High-risk trades like roofing and demolition pay more than finish carpentry or painting. Annual revenue and payroll determine exposure levels: larger operations face greater potential losses. Geographic factors also play a role. Seattle's dense urban construction presents different risks than rural Eastern Washington projects.

Smart contractors don't just buy insurance and hope for the best. They actively manage risks to prevent claims and reduce premiums over time.

Safety Programs and Experience Modification Factors

A documented safety program demonstrates your commitment to preventing injuries. Hold regular toolbox talks, maintain written procedures for high-risk tasks, and enforce personal protective equipment requirements. L&I offers consultation services to help develop effective programs.

Your experience modification rate compares your claims history to industry averages. A rate below 1.0 means you're performing better than average and paying lower premiums. Above 1.0 indicates worse performance and higher costs. Reducing workplace injuries directly improves this rate over a three-year rolling period.

Subcontractor Certificates of Insurance (COI)

When you hire subcontractors, their insurance gaps can become your problems. Always collect certificates of insurance before subcontractors begin work. Verify coverage types, limits, and expiration dates. Confirm you're listed as an additional insured on their general liability policy.

Create a system for tracking subcontractor COIs. Spreadsheets work for small operations, but dedicated software helps larger contractors manage dozens of subcontractor relationships. Never assume a long-term subcontractor maintains coverage: policies lapse, and you need current documentation for every project.

Not all insurance providers understand construction risks equally. The right partner offers more than competitive quotes: they provide expertise that helps you make informed decisions.

Look for agents or brokers specializing in contractor insurance. They understand trade-specific exposures and can identify coverage gaps that generalist agents miss. Ask about their experience with Washington's unique workers' comp system and L&I requirements.

How much does contractor insurance cost in Washington? Costs vary widely based on trade, revenue, and claims history. Small specialty contractors might pay $2,000-5,000 annually for basic coverage, while larger general contractors often spend $20,000 or more.

Can I work as a contractor without insurance in Washington? No. Washington requires proof of liability insurance and workers' compensation coverage or exemption before issuing contractor registration.

What happens if my subcontractor causes damage? You may be held liable if your subcontractor lacks adequate insurance. Always verify their coverage and require additional insured status on their policies.

Does my homeowner's policy cover my contracting business? Homeowner's policies exclude business activities. You need separate commercial coverage for contractor work.

How often should I review my coverage? Review annually at minimum, and whenever you add services, hire employees, purchase major equipment, or take on larger projects.

Protecting your Washington contracting business requires understanding both state requirements and the risks specific to your operations. Start with the mandated coverage: general liability, workers' compensation through L&I, and your contractor's bond. Then evaluate specialized policies based on your equipment, vehicles, and professional exposure.

Build relationships with insurance professionals who know construction. Their guidance helps you avoid gaps that could threaten your business while managing premiums effectively. Invest in safety programs that protect your workers and your experience modification rate. Track subcontractor documentation diligently.

The contractors who thrive long-term treat insurance as a business investment rather than an expense to minimize. They carry adequate limits, maintain clean claims histories, and work with knowledgeable providers. Your insurance strategy directly impacts your ability to win contracts, survive claims, and build lasting success in Washington's competitive construction market.