General Contractor Insurance in Washington State

All general contractors in Washington are required to carry general liability insurance. The policy must have one of the following:

• $200,000 in public liability coverage and $50,000 in property damage coverage
• A combined single limit of $250,000

This policy protects your business from costly mishaps. That includes customer injuries, accidental property damage, and other harm caused to third parties (people outside your business).

Most commercial leases require businesses to carry this coverage. Adding commercial umbrella insurance can boost your coverage on general liability insurance and other policies.

Contractor general liability insurance also covers legal costs related to advertising injuries, such as libel, slander, and copyright infringement. For example, if an employee writes false negative comments about a competitor on your social media page, it'll pay for your legal costs if the business sues.

To meet state requirements in Washington, general contractors with employees must provide workers’ compensation insurance. This includes companies that are headquartered in other states but operate in Washington.

Workers' comp pays for medical bills from work-related injuries and provides disability benefits to injured workers. Washington is one of four monopolistic states, which means that businesses must purchase workers' compensation from the state fund.

Policies purchased from the state fund do not include employer's liability insurance coverage. Usually included in workers' comp, this policy pays for legal costs when an employer is sued for negligence that led to a workplace injury. Fortunately, you can still buy this coverage as a stop gap endorsement from a private insurer.

Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills resulting from an accident, along with vehicle theft, weather damage, and vandalism.

The auto liability insurance requirements for Washington businesses are:

• $25,000 for injuries or death to another person
• $50,000 for injuries or death to all other people
• $10,000 for damage to another person's property

You may want to consider additional coverage, depending on the type of work you do and the vehicles you own.

For vehicles that are used by the business but are leased, rented, or otherwise not owned by the company, you'll need a separate policy called hired and non-owned auto insurance (HNOA). Personal auto insurance will typically not cover accidents or incidents that occur during work-related activities.

Washington contractors must obtain a surety bond as part of their licensing requirements:

• General contractors must have a $30,000 bond.
• Specialty contractors need a $15,000 bond.

A surety bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.