Washington Contractor Insurance Requirements

Before a business can register or renew as a contractor in Washington, it must give L&I proof of liability insurance or an approved alternative. That requirement, set out in RCW 18.27.050, is what pays for a burst pipe a plumber causes, a ladder through your window or an injury to a visitor on your property. Here is what the law requires and how to check it.

The Minimum Amounts

RCW 18.27.050(1) sets three minimums:

These are floors. Many policies in the L&I insurance dataset are written at $1,000,000 or more, but the amount on file varies from contractor to contractor. For a large remodel, new roof or work near expensive finishes, it is reasonable to ask whether the contractor’s coverage is above the minimum and to see a certificate of insurance.

Lapsed Insurance Suspends the Registration

Under RCW 18.27.050(2), an expiration, cancellation or revocation of the policy, or the insurer withdrawing, automatically suspends the registration until a new policy or reinstatement notice is filed and approved. In practice:

• a contractor whose policy lapses mid-project is no longer validly registered,
• the status on the public record should change to SUSPENDED,
• the contractor cannot lawfully keep bidding or working until coverage is restored.

Check the insurance expiry date on the record, not just the registration status.

Assigned Accounts Instead of Insurance

The law lets a contractor meet the requirement with an assigned account held by L&I in the same amounts. A contractor that does this must tell each customer that it filed an assigned account in lieu of insurance, and that recovering from the account requires a court judgment. That is a slower path than an insurance claim, so ask questions if you see it.

What Liability Insurance Does and Does Not Cover

Liability insurance is built for accidents: property damage and bodily injury caused by the contractor’s operations. Typical examples include water damage from a plumbing connection that fails during the job, fire caused by a torch, or damage to a neighbour’s car from falling materials.

It usually does not cover the cost of redoing work that was simply done badly, finishing an abandoned project or refunding a deposit. Those are contract disputes. Your routes there are the contractor, the bond and, if needed, the courts. Our comparison of contractor bond vs insurance sets out which tool fits which problem.

Workers’ Compensation Is Separate

General liability insurance protects third parties and property. It is not workers’ compensation. Washington runs its own industrial insurance system through L&I, and employers generally must have an L&I workers’ comp account in good standing for their workers.

Why it matters to you: if an uninsured worker is hurt on your property, questions about who pays can get complicated. L&I Verify shows whether a business has an active workers’ comp account; check it when the contractor has employees.

Tip: Ask for a certificate of insurance naming the policy period that covers your job. Then cross-check the insurer and expiry date against the state record.

How to Check a Contractor’s Insurance

1. Open the business’s profile in our directory. It shows the insurer, coverage amount and expiry date from the L&I insurance dataset; cancelled or expired policies are excluded.
2. Confirm the policy runs past your expected completion date.
3. Confirm on L&I Verify, and look at the workers’ comp section.
4. For larger projects, request a certificate directly from the contractor’s agent.

The full process, including what to ask the agent, is in how to verify a contractor’s insurance.

Why Electrical Profiles Look Different

Electrical contractors are licensed under RCW chapter 19.28 through L&I’s electrical program, and their records generally do not appear in the construction-contractor insurance dataset. On our electrician profiles you will usually see a bond but no insurance record. That is expected and is not a warning sign by itself.

If Something Goes Wrong

If a contractor’s work damages your property or injures someone, L&I’s guidance is to contact the contractor’s insurer directly to make a claim. Document everything: photos, dates, names, and what was said. Notify your own homeowner’s insurer too, because your policy may respond first and then pursue the contractor’s insurer.

How Insurance Fits with the Bond

Insurance and the bond are separate, required layers. The bond amounts and what they cover are explained in Washington contractor bond requirements. A contractor with both on file, plus an ACTIVE registration, has met the baseline the law sets. It is still worth asking about coverage levels, subcontractors’ insurance and permits before you sign.

Questions to Ask Before You Sign

• Which insurer covers you, and when does the policy renew?
• What are your per-occurrence and aggregate limits?
• Do your subcontractors carry their own coverage?
• Do you have employees, and is your L&I workers’ comp account current?
• Will you add a copy of your certificate of insurance to our contract file?

Subcontractors and Insurance

On projects with several trades, each subcontractor should carry its own liability coverage. A general contractor’s policy may or may not respond to damage caused by a subcontractor, depending on the policy terms. Asking the general contractor to confirm that every subcontractor is registered and insured is a simple, reasonable request, and checking their records yourself takes only a few extra minutes.

Insurance on Long Projects

Policies renew annually, and a long remodel can run across a renewal date. Note the expiry date on the state record when you sign, and put a reminder in your calendar a week before it. On that date, check the record again or ask the contractor’s agent for an updated certificate. Because a lapse in required liability insurance suspends registration, the record itself is a useful early warning. A short check at renewal time costs nothing and avoids discovering the gap only after an accident on site.