The bond

Every registered contractor files a surety bond with the state under RCW 18.27.040. The amount depends on the registration: $30,000 for a general contractor and $15,000 for a specialty contractor. The bond names the state of Washington as obligee, and it is conditioned on the contractor paying for labor and benefits, paying taxes due to the state, and paying for materials, equipment, and breach of contract claims.

The bond is the part most homeowners have never heard of, and it is the part that matters most if a contractor walks off. Claims are paid in a set order: employee labor first, then breach of contract by the homeowner, then subcontractors, materials and equipment, then taxes, then court costs and attorneys’ fees. A cancellation or revocation of the bond automatically suspends the contractor’s registration until a new bond is filed and approved.

If you are the homeowner, you generally have two years from the date the claimed work was substantially completed or abandoned to file your claim on the bond. Everyone else has one year. So a slow dispute can cost you the claim entirely.

The insurance

RCW 18.27.050 requires insurance or financial responsibility in these amounts:

  • $50,000 for injury or damage to property.
  • $100,000 for injury or damage, including death, to any one person.
  • $200,000 for injury or damage, including death, to more than one person.

An expiration, cancellation, or revocation of the policy automatically suspends the contractor’s registration until new coverage is filed and approved. The same failure to maintain coverage that gets a license revoked also removes the protection you thought you had.

A contractor can file an assigned savings account in place of insurance, but if they do, they are required to tell you. If you are not told, ask directly whether they are on an insurance policy or an assigned account.

Ask for the bond and insurance amount, not just a yes. The number is the point. A contractor who tells you they are “insured” without naming an amount has told you nothing you can check. The profile for each contractor on this site shows the bond amount and the insurance amount on file.

What this looks like on a real project

  • Before signing: confirm the license number on the contract matches the license you verified with L&I, and that the registration is active.
  • Ask for the surety bond amount and the general liability limits, in writing, on the contract.
  • For work touching structure, electrical, plumbing, or gas, confirm the trade on the license covers that specific work.
  • For a larger project, ask for a performance bond. This is a separate bond, paid for by the contractor, that protects you if they fail to complete the work.
  • Keep the signed contract, the written scope, every change order, and every payment receipt. Bond and recovery claims are won or lost on paperwork.

Related: How to check a Washington contractor’s license.

Sources

Everything above comes from Washington state primary sources. These are the pages the requirements are written on, so you can read the actual language and check the figures yourself.