How to Verify Contractor Insurance in Washington: Certificates and Coverage

Insurance protects you if something goes wrong during your construction project. A contractor without proper insurance leaves you exposed to potentially devastating financial liability. In Washington State, contractors must carry certain insurance—but you need to verify it yourself.

This guide shows you exactly how to verify contractor insurance and what coverage to require.

Washington State Insurance Requirements

What Washington Law Requires

Under the Contractor Registration Act (RCW 18.27), all registered contractors must provide:

1. Industrial Insurance (Workers' Compensation)

   • Must be current with L&I or have approved self-insurance
   • Covers workers injured on your job site
   • Verified through L&I contractor lookup

2. Contractor's Bond

   • Minimum $12,000 for general contractors (revenue under $1M)
   • Higher amounts for larger contractors
   • Protects against contractor failure to perform

What Washington Law Does NOT Require

Washington does not mandate:

• General liability insurance (but you should require it)
• Commercial auto insurance (but you should require it)
• Specific coverage amounts (you set these in your contract)

This is a critical gap. Even a licensed contractor may not carry adequate liability insurance. You must verify and require it.

Types of Insurance to Require

General Liability Insurance

What it covers:

• Damage to your property during construction
• Third-party injuries (visitor trips over materials)
• Completed operations (problems discovered after project ends)
• Products liability (defective materials)

Minimum to require: $1,000,000 per occurrence / $2,000,000 aggregate

Why it matters: If a contractor damages your home, or someone is injured, this insurance pays—not your homeowner's policy.

Workers' Compensation (Industrial Insurance)

What it covers:

• Medical expenses for injured workers
• Lost wages
• Disability benefits
• Death benefits

Why it matters: Without workers' comp, an injured worker can sue YOU as the property owner. This happens more than you'd think.

Commercial Auto Insurance

What it covers:

• Accidents involving contractor vehicles
• Damage caused by work vehicles
• Third-party injuries from vehicle accidents

Minimum to require: $1,000,000 combined single limit

Why it matters: If a contractor's vehicle damages your property or injures someone, this coverage applies.

Umbrella/Excess Liability

For large projects ($200K+), consider requiring:

• $1,000,000 to $5,000,000 umbrella coverage
• Provides additional protection beyond base policies

Reading a Certificate of Insurance (COI)

A Certificate of Insurance is a summary document showing a contractor's coverage. Here's how to read one:

Key Sections to Verify

1. Named Insured Verify this matches the contractor's legal business name on their license—not a different entity.

2. Policy Numbers Each coverage type should have a unique policy number. Write these down for verification.

3. Coverage Types and Limits

Coverage Type	What to Look For
Commercial General Liability	$1M occurrence / $2M aggregate minimum
Products-Completed Operations	Included in general liability
Personal & Advertising Injury	Typically $1M
Damage to Rented Premises	$50K-$100K
Medical Payments	$5K-$10K
Automobile Liability	$1M combined single limit
Workers Compensation	Statutory limits (as required by WA)
Employers Liability	$500K/$500K/$500K minimum

4. Policy Period Coverage must be active throughout your project. If the policy expires mid-project, require renewal certificate.

5. Certificate Holder Your name and address should be listed. Request to be added as "Additional Insured."

6. Endorsements/Additional Insured If you're listed as additional insured, it should be noted here.

Sample COI Red Flags

❌ Policy expired or expires before project completion ❌ Named insured doesn't match contractor's license ❌ Coverage limits below what you required ❌ Workers compensation shows "exempt" without legitimate reason ❌ Important coverage types missing ❌ Certificate says "for information purposes only" without actual proof

How to Verify Insurance

Step 1: Request the Certificate

Ask the contractor for a current Certificate of Insurance listing:

• General liability
• Workers compensation (or L&I letter of exemption)
• Commercial auto

Request language: "Please provide a Certificate of Insurance showing general liability coverage of at least $1M/$2M, workers compensation, and commercial auto. Please add [Your Name] and [Your Property Address] as additional insured on the general liability policy."

Step 2: Call the Insurance Company

Don't just trust the paper. Call the insurer directly to verify:

1. Find the insurer's verification line (on the certificate or their website)
2. Provide the policy number
3. Verify:
   • Policy is currently active
   • Coverage limits match the certificate
   • Named insured matches
   • No pending cancellations

Sample script: "I'm calling to verify insurance coverage for a contractor I'm considering hiring. The policy number is [X]. Can you confirm the policy is active, the coverage limits, and the named insured?"

Step 3: Verify Workers Comp Through L&I

Washington L&I tracks workers compensation directly:

1. Go to verify.lni.wa.gov
2. Search for the contractor
3. Check "Industrial Insurance" status
4. Should show "Current" with a covered account

If status shows exempt: Ask for documentation. Sole proprietors with no employees may qualify for exemption, but subcontractors on your job must still be covered.

Step 4: Request Additional Insured Status

Being named as "Additional Insured" on the contractor's policy means:

• You're covered under their policy for the project
• You receive notice if the policy is canceled
• Reduces your homeowner's coverage exposure

Request this in writing and verify it appears on the certificate.

Workers Comp: The Critical Coverage

In Washington, workers comp (industrial insurance) is managed through L&I. Here's what you need to know:

Why This Matters to You

If an uninsured worker is injured on your property:

• Worker may sue you as the property owner
• Your homeowner's insurance may deny the claim (construction exclusion)
• You could be personally liable for medical bills, lost wages, and damages

Verifying Workers Comp

Licensed contractors must be current with L&I. Verify at verify.lni.wa.gov.

Look for:

• Status: "Current"
• Covered employee count
• No pending violations

Subcontractor Coverage

Your general contractor's workers comp may not cover subcontractors. Ask:

1. Are subcontractors covered under your policy?
2. Can you provide proof that each subcontractor has their own coverage?
3. How do you verify sub coverage before they start?

For large projects: Request certificates from all subcontractors, or a contractor certification that all subs are covered.

What If a Contractor Lacks Insurance?

General Liability Missing

If a contractor doesn't carry general liability:

• Don't hire them
• Any damage to your property comes out of their pocket (or yours)
• Your only recourse is their bond ($12,000) and small claims court
• Risk is too high for anything beyond tiny projects

Workers Comp Issues

If L&I shows workers comp problems:

• Don't hire them
• They're violating Washington law
• You're exposed to massive liability
• This often indicates broader business problems

Low Coverage Limits

If coverage exists but limits are too low:

• Request they increase coverage for your project
• Many contractors can get project-specific riders
• If they refuse, reconsider hiring them

Contract Insurance Provisions

Standard Insurance Clause

"Contractor shall maintain, at Contractor's expense, the following insurance coverage throughout the term of this Contract:

(a) Commercial General Liability insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 aggregate.

(b) Workers Compensation insurance as required by Washington State law.

(c) Commercial Automobile Liability insurance with limits of not less than $1,000,000 combined single limit.

Contractor shall provide certificates of insurance prior to commencing work and upon request. Owner shall be named as Additional Insured on all liability policies. Contractor shall provide 30 days' advance notice of any policy cancellation."

Additional Insured Requirement

"Owner shall be added as Additional Insured on Contractor's Commercial General Liability and Commercial Umbrella policies with respect to operations performed under this Contract. Evidence of Additional Insured status shall be provided on the Certificate of Insurance."

Real-World Scenarios

Scenario 1: Worker Falls Off Ladder

Situation: Subcontractor employee falls from ladder, breaks leg, requires surgery. With proper insurance: Workers comp covers all medical bills and lost wages. Without insurance: Worker may sue you as property owner. Your homeowner's policy likely excludes construction injuries. You could be liable for $100,000+.

Scenario 2: Contractor Damages Neighbor's Property

Situation: Contractor's equipment damages neighbor's fence and landscaping. With proper insurance: Contractor's general liability covers the damage. Without insurance: Neighbor sues contractor (and possibly you). Collecting becomes your problem.

Scenario 3: Fire During Construction

Situation: Electrical short during rough-in causes fire, damaging your home. With proper insurance: Contractor's general liability covers your property damage (minus deductible). Without insurance: Your homeowner's policy may cover, but often has construction exclusions or higher deductibles. You may need to sue the contractor to recover costs.

Scenario 4: Policy Lapses Mid-Project

Situation: You verified insurance at start, but policy lapsed after two months. Accident happens in month three. Prevention: Require notification of cancellation. Add contract clause requiring current insurance throughout project. Verify periodically on long projects.

Insurance Verification Checklist

Before signing any contract:

• Received Certificate of Insurance
• General liability at least $1M/$2M
• Workers comp verified at verify.lni.wa.gov
• Called insurer to verify policy is active
• Policy period covers entire project timeline
• Named insured matches contractor's license
• You're listed as Additional Insured
• Auto liability verified (if vehicles used)
• Contract includes insurance requirements
• Understand subcontractor coverage situation

The Bottom Line

Insurance verification takes 30 minutes. That 30 minutes protects you from potentially hundreds of thousands of dollars in liability.

Never skip this step:

1. Request certificates
2. Call to verify
3. Check L&I for workers comp
4. Get named as additional insured
5. Include insurance requirements in your contract

A contractor who can't provide proof of insurance shouldn't be doing your project.

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Find insured, licensed contractors in our Washington Contractor Directory. Verify license status and L&I compliance before hiring.