Washington's biggest difference from its neighbors is workers comp: it is a monopolistic state fund. Here is a plain-language overview of what tends to apply, with the official sources to confirm it.
Who needs a license in Washington
Washington requires all construction contractors to register with the Department of Labor & Industries (L&I) before they bid, advertise, or perform work. There is no dollar threshold; registration is required to operate. General and specialty contractors are separate classifications, and a specialty contractor may only work in its registered specialty and generally cannot hire subcontractors.
License bonds and liability in Washington
Washington requires a continuous contractor surety bond, generally $30,000 for a general contractor and $15,000 for a specialty contractor (amounts increased July 1, 2024). Contractors must also carry general liability insurance meeting the state's minimum limits. An assigned account can substitute for the bond. Confirm current amounts with L&I.
Workers compensation in Washington (monopolistic)
This is the key point. Washington is a monopolistic workers comp state: employers generally cannot buy workers comp from a private insurer. Coverage must come from the L&I state fund, or the employer must qualify as a certified self-insurer, which only large employers do. Construction employers open an L&I account and report worker hours. Trying to buy a private workers comp policy in Washington does not satisfy the requirement.
Owner and officer exemptions
Sole proprietors, partners, and qualifying exempt corporate officers are generally not required to be covered, and a corporation may exempt a limited number of bona fide officers. Owners and exempt officers may elect optional coverage. Verify your specific situation with L&I.
Independent contractors and subcontractors
Washington uses a statutory multi-part test (RCW 51.08.181) for workers comp, with an additional part for construction: the worker must be a properly registered contractor on the contract's effective date. Hiring an unregistered sub can pull that worker onto your account.
Public works and prevailing wage
Washington public works carry prevailing-wage requirements administered by L&I, including intent and affidavit filings. Public contracts also tend to require higher limits and specific endorsements. Confirm public-works bond and retainage rules with L&I.
Verify before you rely on this
Washington is a monopolistic workers comp state, which changes how coverage is bought. This page is general information for Washington contractors, not legal advice, and rules change and vary by project and locality. Confirm current requirements with the official sources below before you bid, hire, or buy coverage.
Last verified June 2026 by Vantage Point Risk.
