What Insurance Do Contractors Need in Washington?
In order to establish a contractor’s business in Washington, you need to take care of a few things first.
Contracting business in Washington range from construction to remodeling and all kinds of hands on professions.
Therefore, you need various types of insurance to cover all your bases. Besides business registration and establishing what kind of business you’re going to run, you need:
- A Surety Bond: A surety bond worth $12,000 needs to be secured. This shows the government that you’ll be able to pay for damages or uncompleted work after you’re done with a job.
- General Liability Insurance: You should really consider getting general liability insurance which covers all forms of property damage. In Washington, business owners require $200,000 in public liability and $50,000 in property damage. That totals to a $250,000 insurance policy limit.
- Finally, you should get worker’s compensation since you will have all sorts of employees. The workers compensation insurance will cover your employees’ work related injury costs and compensations.
General Liability Insurance
General liability insurance is a good idea to get for most contracting businesses. However, it’s an especially good idea for businesses like construction or a contractor business.
General liability insurance can cover bodily compensation or financial loss suffered by customer or general public. It’s a very common coverage since most small business owners buy the policy after they start a business.
If you operate a location open to the public and work with clients closely, then this is almost a no-brainer.
There is more than one type of contractor surety bond that you need to secure in Washington. The general contractor surety bond starts at $12,000. However, for a specialty Contractor License Bond you need to pay $6,000. For an Electrical/Telecommunications business Contractor Bond, you need to pay $4,000.
There are several other surety bonds that cover sprinkler systems, electrical contractors, and sewer contracts. The last one is the most expensive as it costs around $30,000.
Worker’s compensation is specifically important when you’re dealing with contracting businesses like construction. Indoor work like plumbing, carpentry, etc. doesn’t exactly guarantee that you won’t get hurt. Working on electrical circuits and with electrical supplies almost guarantees that you’ll get a shock every now and then.
Hence worker’s compensation is essential insurance for contractors. It protects you against any sort of lawsuit that can result from injuries sustained during work. It can cover any injury that results from improper issue of equipment or negligence in safety when working on site.
These things are bound to happen in work that concerns contractors in Washington. Not only is it extremely common for people to get hurt on the job doing manual labor, but it’s also inevitable that workers will sustain injuries while working with their hands. No matter how much protection they wear, workers are bound to get hurt eventually.
In the case of extreme injuries, there may be lawsuits against the company. In that case, worker’s compensation can protect against these cases by paying for Attorney’s fees, court costs as well as for judgments and settlements.
In the most tragic of cases where injuries or illnesses that are contracted on the job result in death, worker’s compensation comes in handy. It covers death benefits as well. Not only is it the job of the company to pay for the fallout that results from the death of a worker, but it’s their civic duty. These help a deceased employee’s family including any close relatives pay for a funeral and burial costs. It even covers the fallout they experience with regards to a suspension of regular income.
In the case of the coronavirus infection, worker’s comp also helps cover medical costs. Of course, worker’s comp depends on where the employee got the virus in the first place. If the virus is contracted at work, then the worker’s compensation insurance is completely applicable.
The dependence of worker’s compensation in Washington is on several factors. These include:
Payroll: How much you’re making as a business plays a big role on how much you’ll be compensated for an illness or injury
Location: The location that you’re working in may influence the insurance package that you’re recommended. It also may affect the eventual payout.
No. of Employees: It’s obvious that the greater the number of employees, the higher the insurance coverage will be. If you employ a handful of people, then the risk of them getting hurt or tragically dying in an accident is limited. However, as the numbers go up, they start to tell a different story.
Risk Factors/Industry: Working with one’s hands and in often dangerous locations results in rising costs for insurance. If your business deals in heavy construction, then the costs may go up higher due to the risk factor.
Claims History: The history of your claims may also influence how much it costs you to pay for insurance. If you have a history of injuries and illnesses occurring on your premises, then the insurance will cost you more. Since your premises or work has a proven record of being unsafe, the insurance will reflect that.
Getting these three insurance policies will help you if you’re starting a contractor business in Washington. While you don’t need to excessively worry about injuries, illnesses, mess ups, etc. you should be prepared. As they say, hope for the best, but prepare for the worst.