Contractor coverage and compliance, built for Washington.

Washington is one of a small number of monopolistic state fund states. Under RCW 51.14.010 a contractor secures workers compensation through the L&I state fund or by qualifying as a certified self-insurer, and that is the entire list. There is no private market to shop, which means anyone offering to quote your Washington workers compensation is selling you something other than what they said.

Who this page is for

Contractors registered with Washington Labor and Industries, and contractors from Oregon, Idaho or California who are about to take a job across the line and assume the rules travel with them. They do not. Washington is the most structurally different state we work in, and the difference is not the bond amount. It is who is allowed to sell you workers compensation.

Washington registers contractors. It does not license them.

L&I issues a Certificate of Registration, not a license, and the distinction is real. There is no competency exam, no experience requirement, and no education requirement to register as a general or specialty contractor. The steps are administrative: register with the Department of Revenue, post a bond, buy general liability insurance, submit the application, pay the fee.

That surprises contractors coming from Oregon, where the CCB requires 16 hours of pre-license training and an 80-question exam, or from California, where CSLB requires four years of journey-level experience and two exams. Washington gates entry on financial responsibility instead of tested competency.

Electrical, plumbing, elevator, boiler, manufactured-home installation and asbestos are the exceptions. Those are licensed separately, with their own exams and their own bonds, and holding a general contractor registration does not cover that work.

Bond and insurance: what L&I actually requires

The bond doubled recently. As of July 1, 2024, general contractors post $30,000 and specialty contractors post $15,000, up from $12,000 and $6,000. That was the first increase in more than two decades. Contractors with recent residential judgments against them can be pushed to $90,000 and $45,000.

Note the insurance structure, because it is unusual and it has not moved since 2001. Washington still states property damage as its own limit rather than folding it into a single number. Most states, and most modern policies, quote a combined single limit. The statute allows $250,000 CSL as an alternative, which is how nearly every policy we place actually satisfies it.

Workers compensation: you cannot buy it from a private carrier

This is the fact that makes Washington unlike almost every state around it, and it is the one contractors get wrong most often.

Washington runs a monopolistic state fund. Under RCW 51.14.010, an employer secures workers compensation one of exactly two ways: through the state fund administered by L&I, or by qualifying as a certified self-insurer. There is no third option. There is no private workers compensation policy to shop, because none exists to sell.

Practically, that means when you hire your first employee in Washington you open an employer account with L&I and pay premiums directly to the state. Your agent cannot market that coverage, because there is no market. Anyone offering to shop your Washington workers compensation is either confused or selling you something else.

Self-insurance is not a workaround for a normal contractor. The qualification bar runs to three years in business, an established safety program, a substantial net worth or revenue test, an investment-grade credit rating and a surety deposit. It is a path for very large employers, not a small general contractor with six people.

Premium is charged by the hour, not by payroll

The second half of the surprise. Most states rate workers compensation as a percentage of payroll. Washington publishes hourly rates by risk classification and charges per hour worked. Two contractors with identical payroll can owe very different premiums depending on how those wages break into hours, and overtime hours count as hours.

The practical consequence: your Washington comp cost tracks headcount and hours far more than it tracks wage level. Time records, not payroll summaries, are what get audited.

What actually happens if you work unregistered

The common phrase is stop work order. That is not the mechanism. L&I issues a notice of infraction, a civil penalty that escalates: $1,200 for a first violation, reduced to as little as $600 if you register within 10 days of the citation; $3,000 for a second; $5,000 for a third; $10,000 for each after that. Each day and each worksite can be counted separately, and repeat unregistered contracting becomes a gross misdemeanor. A second violation within five years also brings a one-year ban from public bidding.

Six years, not ten: the repose clock drives your completed operations

Washington sets a six-year statute of repose from substantial completion under RCW 4.16.310. California is ten. That difference should change how long you keep completed operations coverage in force after you stop building.

There is a trap inside it. Ordinary property damage claims carry a three-year limitation from discovery, but everything still has to land inside the six-year outer window. A defect found in year five leaves roughly one year to bring the claim. Anything discovered after year six is barred outright.

The insurance consequence is straightforward. Completed operations responds to work you already finished, and if you drop coverage the year you retire, a claim arriving in year four has no policy to answer it. Six years is short compared to California, but it is not zero.

What your contract will require, regardless of the state minimum

The L&I insurance minimums are a registration gate, not a coverage standard. General contractors, owners, municipalities and lenders in Washington commonly require $1 million per occurrence and $2 million aggregate, plus additional insured, waiver of subrogation, and primary and non-contributory wording. That is the number most of our Washington contractors actually carry.

The gap here is wider than in most states, because the statutory floor has not been updated since 2001. A contractor holding exactly $200,000 bodily injury and $50,000 property damage is fully registered in Washington and unable to sign most commercial contracts in the state.

Registration minimum versus what the job requires