Most Washington businesses need workers compensation the moment they hire anyone, general liability that clients and landlords insist on, and property coverage, or a bundled "package" policy that rolls property and liability together, for their equipment and space. Workers comp is the one Washington law forces on you: under the Industrial Insurance Act, Title 51 of the state code, there is no minimum headcount and no exception for part-time, seasonal, or family staff, so your first worker triggers the duty to carry coverage.
Who this is for: Washington owners, from a one-van contractor in Spokane to a 30-person shop in Seattle, who want to know what the state requires, what their contracts require, and how to buy it without overpaying.
The short version
- Workers comp is required once you have any worker. Washington sets no minimum headcount and no part-time exception, so your first worker makes coverage mandatory.
- You buy it only from the state, not a private company. Washington is one of a few states where workers comp, called industrial insurance here, is sold only through the Department of Labor and Industries (L&I), the state agency that runs Washington's fund. There is no private carrier and no shopping around on price.
- Owners start out off the policy. Sole proprietors, partners, and qualifying corporation and LLC owners are left off by default and file a form to opt in, the opposite of many states.
- Your price is charged by the hour, and your worker chips in. Washington bills premium per hour worked, not as a share of payroll, and by law the worker pays about a quarter of it through a payroll deduction.
- Skipping coverage is expensive. Washington can bill you the full cost of an injury plus a penalty, order your work stopped, and treat knowing evasion as a felony.
What Washington actually requires
Only a couple of these are true legal mandates. The rest get required by the people you do business with, which in practice is just as binding.
| Coverage | Required by Washington law? | Who needs it | What is at stake |
|---|---|---|---|
| Workers compensation (industrial insurance) | Yes, under Title 51, from your first worker | Every employer with one or more covered workers | Full injury cost billed back, penalties, a stop-work order, felony exposure |
| Stop-gap employers liability | No state mandate, but the state fund does not include it | Any employer that wants a defense if it is sued over a workplace injury | Paying your own legal defense out of pocket |
| Commercial auto | Yes, if you own or use business vehicles | Any business-owned or leased vehicle | Registration problems, uninsured liability |
| General liability | No state mandate | Required by most leases, clients, and general contractors | Lost contracts, blocked from a job site |
| Commercial property or a package policy | No state mandate | Anyone with a space, inventory, or equipment; landlords often require it | Out-of-pocket losses, lease default |
Who oversees it in Washington
L&I is unusual: it is the insurer, the rate-setter, and the enforcement agency all in one. It runs the state fund that sells your coverage, it sets the rates by rule, and it audits and penalizes employers who go without. Because there are no private workers comp carriers here, there is no separate insurance-commissioner step to approve a workers comp rate. The only alternative to the state fund is self-insurance, which L&I allows for large, financially strong employers that can prove they can pay their own claims.
What business insurance costs in Washington
These are illustrative annual ranges for small Washington businesses, not quotes. Your real workers comp price is set by the hours your people work in each risk category and the L&I rate for that category, not by your payroll. L&I adopted an average 4.9 percent workers comp rate increase for 2026, about 1.37 dollars more per week per full-time worker, with construction rising less at about 3 percent.
| Business type | Workers comp (est.) | General liability (est.) | Package policy (est.) |
|---|---|---|---|
| Office or professional services | 500 to 2,400 dollars | 500 to 2,000 dollars | 1,200 to 3,800 dollars |
| Restaurant or cafe | 2,600 to 10,000 dollars | 1,500 to 5,200 dollars | 4,200 to 15,000 dollars |
| Landscaper or small contractor | 3,500 to 14,000 dollars | 1,200 to 4,200 dollars | Usually separate policies |
| Cleaning or janitorial | 3,000 to 11,000 dollars | 900 to 3,400 dollars | Usually separate policies |
| Retail store | 1,200 to 5,000 dollars | 800 to 3,200 dollars | 2,400 to 8,500 dollars |
The 14 workers comp questions Washington owners ask
Workers comp is where most of the confusion and most of the risk live, so we wrote a plain-English guide for every common situation. Start with the Washington workers comp overview, then jump to the one that matches your business:
- I own an LLC
- I am a sole proprietor
- I own a corporation (C-corp or S-corp)
- We are a partnership
- We are a nonprofit
- My workers are 1099 contractors
- I only have part-time or seasonal staff
- I only employ family members
- My team is remote or out of state
- What happens if I do not have it
- How much it costs
- How to get it
- What I need for a contractor license
A Seattle example
Illustrative, not a quote. A four-person general contractor in Seattle runs the business as an LLC with two members and two field workers. Because the LLC has non-owner workers, Washington requires an L&I account, and the two workers must be covered from their first hour. The two members are left off by default and could file to elect coverage for themselves. When the crew pulls a building permit, the city wants proof the business has an active L&I account, and because the account is open the owner can show it the same day. See the trade detail on our workers comp for contractors page.
Real questions Washington owners ask
Do I need workers comp for my Washington business?
If you have any workers, yes. Washington requires industrial insurance coverage once you have one or more covered workers under Title 51, with no minimum headcount and no exception for part-time or seasonal staff.
Where do I buy workers comp in Washington?
Only from the state fund at Labor and Industries. Washington does not allow private companies to sell workers comp, so you open an L and I industrial insurance account rather than shopping carriers. Large, financially strong employers can instead apply to self-insure.
Do I have to cover myself as the owner?
Usually not by default. Sole proprietors, partners, and qualifying corporation and LLC owners are left off unless they file a state form to opt in. Your non-owner workers always have to be covered.
Is general liability insurance required in Washington?
The state does not make general liability mandatory for most businesses, but landlords, clients, and general contractors almost always require it before they will sign with you, so in practice you usually need it.
What happens if I skip workers comp?
If a worker is hurt while you are uninsured, Washington bills you the full cost of the claim plus a penalty of up to 1,301 dollars or double the premiums owed, whichever is greater. It can also order your work stopped, and knowing evasion is a felony.
Does my worker really pay part of the premium?
Yes, and this is unusual to Washington. Premium is charged per hour worked, and by law you can deduct about a quarter of it from the worker's pay while you cover the rest. Most states put the full cost on the employer.
I am based out of state with a worker in Washington. Do I need coverage here?
Generally yes. If a worker mainly performs the job in Washington, or was hired in Washington, you usually must cover those hours with L and I unless you carry approved coverage under a reciprocal agreement. We can help you sort out which state applies.
Why Washington owners choose Morrow
- We shop the right market for you. In Washington, workers' compensation is sold only through the state fund at the Department of Labor and Industries (L&I), with no private carriers to shop, so we help you open and run your L&I account correctly and place the stop-gap employers liability and other business coverages the state fund does not include.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Washington guides
Every Washington business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Washington (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Hiring your first employee: what changes
- What workers comp does not cover
- Washington contractor workers comp
This guide is general information, not legal advice. Washington rules and penalty amounts can change, so verify current requirements with the Washington State Department of Labor and Industries (L&I) or a licensed advisor before you rely on them. Last updated: July 2026.