Obtain Liability Insurance for Your Contracting Business
Serving All of Western Washington
According to the Department of Labor & Industries, all contractors must be insured, bonded, and registered before starting work. The state requires all contractors to obtain General Liability Insurance with a combined single limit of $250,000 at a minimum. Additionally, these companies must obtain either a Specialty Contractor Bond or a General Contractor Bond, depending on the scope of their operations.
At Olympic Northwest Insurance, we know the insurance process presents a challenge for new contractors. To help, we have outlined some information on obtaining your insurance and bond in Washington State.
Finding the Right Liability Insurance Coverage
There's a difference between the standards set by the state department and the standards you can and should reach for. To better understand the policies available to your company, identify your business as one of the following:
- General Contractor. A company or individual who subcontracts 25% or more of the work.
- Subcontractor. A company or individual that another contractor or third party hires.
- Artisan Contractor. A company or individual that the end customer (the tenant or building owner) hires directly.
Once you identify your company type, our insurance agents can help you settle on the right policy. Most often, we recommend general liability insurance with limits of $1,000,000 for each occurrence and $2,000,000 for general aggregate.
If you are a subcontractor, you will also need a policy that allows for additional insureds. With this type of endorsement, you can extend defense and liability coverage to the hiring entity for the work you are doing. There may or may not be a charge for Additional Insured status, depending on the policy you choose. Our agents can narrow down the options for you.
Understanding Your Bond Requirements
According to the Department of Labor & Industries, there are three types of contractors: specialty, general, and electrical.
If your company performs a single trade, as defined by L&I, you may obtain a Specialty Contractor Bond, often called a "specialty bond", for $6,000. If your company has more than one specialty, you must purchase a $12,000 General Contractor Bond, often called a "general bond". Electricians are eligible for a $4,000 Electrical Contractor Bond.
Our agents have the training and experience to lend a helping hand while you choose the right insurance and bond. They can even walk you through the process of getting a contractor's license in Washington State.
If you have any questions, give us a call at 360-337-0116 and discuss the needs of your business today.