In many states, to be a licensed contractor, you are required by the state to have a bond. Sometimes it’s state-regulated, and other times it differs between counties or even cities. In some states, the requirement is the same for everyone, and sometimes it’s set by the financial strength of the contractor.
For Washington state, the requirements are the same for everyone throughout the state.
Bonds For Contractors
To be a General contractor, the requirement is a $12,000 surety bond, while Specialty contractors need a $6,000 bond, and Electrical contractors need $4,000. These are filed with the Washington State Department of Labor & Industries and are the most common type of contractor bond.
Bonds For Fire Sprinkler Contractors
For fire sprinkler contractors wanting the level 1, level 2, and level I and T permits will have to get a $6000 bond. For a level 3 and level U permit, the bond amount is $10,000. For these, the obligee is the Washington State Patrol (WSP).
Bonds For Plumbers
In 2021, Washington state introduced a Plumbers Contractor License Bond in the amount of $6,000. If your business only does plumbing work, you only need this bond. However, general contractors who also provide plumbing services will need both the $12,000 bond as well as this one.
Though the state has set amounts for their contractor bonds, many cities in Washington have specified license and permit bonds that they require. For example, the city of Bellevue has a landscaping contractor bond. Sumner has a sewer and excavation contractor bond. And the city of Edmonds has a demolition contractor bond.
What amount does a contractor license bond cost in Washington?
License and permit bonds are, for the most part, determined by credit. There are always multiple factors that go into selecting rates, but credit is the most important factor. Rates for bonds are reviewed, approved, and filed by the Office of the Insurance Commissioner, and are not determined by our office. A high credit score will get an annual premium of 1.5-2%, while a lower credit score could be as high as 5-10%. But — it doesn’t cost anything to get a quote for your contractor bond.
For more information on how the price of bonds is determined, check out our prior blog.
Why do I need a bond?
Washington Contractors License bonds are required to protect the citizens of the state who hire contractors to do work on their properties. The bond ensures that the principal will pay all individuals who work/provide material for them, will pay state taxes, follow state statutes in their contracting practice, and will perform honestly for their clients.
If you are hired to do any of the items listed below on someone else’s property, you are required to be registered as a contractor with the state.
- Construct buildings and other structures.
- Do flooring, roofing, siding, painting, installing drywall, or similar work.
- Install cabinets.
- Install plumbing, electrical, HVAC, septic, or other building systems (additional requirements for plumbing and electrical).
- Repair or alter buildings and structures.
- Plant plants, build flower or garden beds or create a path.
- Clear land if it involves cutting trees or moving dirt.
- Develop residential property for sale.
- Serve as consultant or superintendent on a building project.
- Add to or subtract from real property.
- Clean up construction sites.
- Pressure wash decks, roofs, buildings, or other structures.
Washington General and Specialty Contractor Licensing Requirements
To become a contractor in the state of Washington, your first step is to register with the Department of Revenue if you chose to incorporate your business. After that, you will need an application from the Washington Department of Labor & Industries. This can be found on their website or can be mailed to you if requested. Finally, you’ll purchase your bond and insurance. Integrity Surety does not provide insurance, but we work with many fabulous agencies, and we are always willing to provide recommendations. Once your application, bond, and insurance are all in order, you will submit your paperwork to the state and receive your license.
The process of becoming a contractor can be daunting, but the Washington State Department of Labor & Industries website provides detailed step-by-step instructions that are available for everyone. For more information, visit the L&I website or contact us. To follow our company, visit our socials.
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