Washington
General Contractor Insurance

Building the right insurance program means understanding what each coverage actually does and where gaps commonly appear.

General Liability for Property Damage and Bodily Injury

Commercial general liability covers third-party claims for bodily injury and property damage arising from your operations. When a visitor trips over materials on your job site or your crew damages a client's existing structure, CGL responds.

Standard policies include premises liability, products-completed operations coverage, and personal/advertising injury protection. The products-completed operations portion matters enormously for contractors because it covers claims arising after you finish work. A roof leak discovered two years after installation falls under this coverage.

Watch for exclusions in standard forms. Most CGL policies exclude damage to your own work, professional services, and pollution-related claims. These gaps require separate coverage or specific endorsements.

Workers' Compensation and the Washington State Fund

Washington operates a monopolistic state fund for workers' compensation, meaning you can't purchase coverage from private insurers. All coverage goes through L&I's State Fund or through self-insurance programs approved by the state.

Rates vary dramatically by classification code. A framing contractor pays significantly more per $100 of payroll than an office-based project manager. Getting your classifications right matters because incorrect codes can trigger audits and back-premium demands.

The state fund provides solid coverage, but it lacks some flexibility private markets offer. You can't negotiate deductibles or customize policy terms. Your experience modifier, which reflects your claims history compared to similar contractors, directly affects your premium rate.

Commercial Auto and Inland Marine for Tools

Contractor vehicles need commercial auto coverage, not personal policies. Personal auto insurance excludes vehicles used primarily for business, leaving you uninsured when you need coverage most.

Inland marine insurance protects tools, equipment, and materials in transit or stored at job sites. Standard property policies typically exclude items away from your primary business location. A $50,000 tool theft from a job site trailer won't trigger coverage under most commercial property forms without inland marine protection.

Standard policies leave gaps that specialized endorsements can fill. Knowing which endorsements matter for your work prevents overpaying for unnecessary coverage while avoiding dangerous gaps.

Professional Liability and Errors and Omissions

If you provide design services, project management, or consulting alongside construction work, general liability won't cover claims arising from professional mistakes. A design error that causes structural problems triggers a professional liability claim, not a CGL claim.

Design-build contractors face particular exposure here. The line between construction defects and design errors often determines which policy responds. Carrying both coverages with the same insurer can simplify claims handling when responsibility isn't immediately clear.

Professional liability policies are claims-made rather than occurrence-based. This means you need active coverage when the claim is filed, not just when the work was performed. Contractors who retire or sell their businesses should consider tail coverage to protect against claims arising from past projects.

Pollution and Environmental Liability

Standard CGL policies contain absolute pollution exclusions. Any claim involving pollutants, broadly defined to include common construction materials like solvents, fuels, and even dust, gets denied under standard forms.

Contractors working on renovation projects face lead paint and asbestos exposure. Excavation contractors encounter unknown underground contamination. Even routine operations like concrete washout can trigger pollution claims if runoff enters storm drains.

Contractor's pollution liability fills this gap. Policies can cover both sudden releases and gradual contamination, though gradual coverage costs more. If you work on older buildings or sites with unknown environmental history, this coverage moves from optional to essential.

Your liability doesn't end when you hire subcontractors. Washington courts regularly find general contractors responsible for subcontractor negligence, making certificate verification critical.

Requirements for Additional Insured Status

Requiring additional insured status on subcontractor policies gives you direct rights under their coverage. When a sub's employee injures a third party, the sub's policy responds first, protecting your loss history and limits.

The additional insured endorsement should be ongoing, not project-specific, and should cover both ongoing operations and completed operations. Many standard forms only provide ongoing operations coverage, leaving you exposed to claims arising after project completion.

Get the endorsement itself, not just a certificate stating you're listed. Certificates of insurance are informational documents; they don't grant coverage rights. The actual endorsement attached to the policy is what matters.

Verifying Subcontractor Coverage Compliance

Create a system for tracking subcontractor insurance before they start work. Verify that:

• Policy dates cover your project timeline
• Limits meet your contract requirements
• Your company is listed as additional insured
• Workers' compensation is current with L&I

Automated certificate tracking services can monitor expiration dates and send alerts before coverage lapses. The cost is minimal compared to discovering a gap after an incident.

Insurance costs eat into margins, but cutting coverage to save money creates larger risks. Smarter approaches reduce premiums while maintaining protection.

Safety Programs and Experience Modifier Ratings

Your experience modification rate compares your claims history to similar contractors. A mod below 1.0 means better-than-average performance and lower premiums. A mod above 1.0 increases your costs and can disqualify you from certain projects.

Formal safety programs reduce claim frequency, which improves your mod over time. Washington L&I offers consultation services and safety grants for qualifying contractors. Return-to-work programs that bring injured employees back in modified duty roles reduce claim costs and demonstrate commitment to safety.

Document everything. When auditors or underwriters review your account, written safety policies, training records, and incident reports show you take risk management seriously.

Bundle Policies and Annual Insurance Audits

Packaging multiple coverages with one insurer typically yields 10-15% savings compared to separate policies. A contractor's package policy combining general liability, commercial property, inland marine, and commercial auto simplifies administration and reduces gaps between coverages.

Annual policy audits catch classification errors, outdated coverage limits, and missing endorsements. Your business changes over time; your insurance should change with it. A mid-year review before renewal gives you time to shop alternatives if your current insurer's pricing isn't competitive.

Building the right insurance program requires balancing compliance requirements against real-world risk exposure. Washington's regulatory environment demands attention to detail, particularly around workers' compensation and contractor registration. The contractors who thrive long-term treat insurance as a risk management tool rather than just a cost of doing business.

Start by meeting minimum requirements, then evaluate where your actual exposures exceed those minimums. Talk with an agent who specializes in construction risks; generalist agents often miss industry-specific coverage needs. Review your program annually, track your experience modifier, and invest in safety programs that reduce claims over time. The premium savings compound, and the protection lets you focus on building your business rather than worrying about the next claim.