Washington Business Insurance

What Washington Legally Requires

A few rules apply to most Washington employers and vehicle owners:

• Workers' compensation through L&I. If you have employees, you buy comp from the Washington State Department of Labor & Industries, not a private carrier. You'll need a state business license and an L&I account first, then you report hours and pay quarterly.
• Commercial auto liability. Business vehicles need at least 25/50/10 under state financial responsibility law: $25,000 per person and $50,000 per accident for injuries, plus $10,000 for property damage. Carriers that haul regulated cargo or carry passengers for hire face higher limits set by the Utilities and Transportation Commission.
• A state business license. Most businesses register through the Department of Revenue before hiring or opening the L&I account.

General liability isn't required by state law, but contracts, landlords, and licensing boards often demand it. Many Washington contractors can't pull a permit or sign a job without proof of it.

The Stop-Gap Gap Most Owners Miss

Here's the part that catches people. The L&I policy pays an injured worker's medical bills and lost wages. It does not defend you if that worker sues you directly, say, for a serious injury they claim you caused.

In open-market states, that lawsuit protection (employer's liability) rides inside the comp policy. In Washington it doesn't exist there at all. You close the gap with stop-gap coverage, an endorsement added to your commercial general liability policy.

If you have employees in Washington and no stop-gap endorsement, you're exposed. It's worth checking your declarations page for it.

Common Mistakes to Avoid

• Skipping stop-gap. Assuming the L&I policy protects you from a worker's lawsuit. It doesn't. The endorsement goes on your GL.
• Treating minimum auto limits as enough. Washington's 25/50/10 is low. A single serious accident can blow past it, and you're personally on the hook for the rest.
• Guessing at payroll or hours. Lowballing your numbers can leave you with a surprise bill at audit and gaps in coverage.
• Buying on price alone. The cheapest policy often carries exclusions or low sublimits that surface at claim time.
• Ignoring contract language. Many agreements require specific limits, waivers of subrogation, or additional insured status. Read those before you bind.