If your Washington corporation has employees, yes, it must carry workers compensation on them through the state fund at the Department of Labor and Industries (L&I), from the first hour they work. The surprise for many owners is the officers: in Washington a qualifying corporate officer is left off the policy by default, the opposite of states where officers are automatically covered. That default has limits and a headcount cap, and officers who want protection can elect into coverage, so it pays to get the setup right.
Who this is for: Owners and officers of a Washington C-corp or S-corp, whether a one-person corporation or a company with a payroll of employees.
The short version
- Employees must be covered through L&I from the first hour, with no headcount minimum.
- A qualifying officer is left off the policy by default, unlike most states where officers are covered.
- To qualify, an officer must be a genuine officer who is also a director and a shareholder of the corporation.
- A corporation can exempt up to eight such officers, or any number if all of them are close relatives.
- An officer who wants coverage for their own injuries files the state elective-coverage form to opt in.
How Washington treats corporate officers
Washington only lets an officer sit outside coverage if the officer is the real thing: someone voluntarily elected or appointed under the articles or bylaws who is at all times also a director and a shareholder. Meet that test and you are off the policy by default. The cap matters: a corporation can exempt up to eight qualifying officers, and it can exempt more than eight only if every exempt officer is related to the others by blood within the third degree or by marriage. Officers who do not want to be left off, or who do risky work, can elect into coverage. Everyone who is not a qualifying officer, meaning your regular employees, must be covered from the first hour.
Officers and employees at a glance
| Person | Covered by default? | What to know |
|---|---|---|
| Qualifying officer (director and shareholder) | No, left off by default | May elect coverage; up to eight officers exempt, or any number if all are close relatives |
| Officer who is not a shareholder or director | Treated as an employee | Does not meet the exemption test, so must be covered |
| Regular employees | Yes, from the first hour | No headcount minimum; part-time and seasonal count |
Should your officers elect in?
Because officers are off by default, the decision is whether to opt in. An officer doing hands-on or hazardous work often elects coverage, because the state fund would then pay their medical care and lost wages after an on-the-job injury. An officer who only works at a desk and carries good health and disability insurance may choose to stay off and keep their pay out of the reported hours. Whatever you decide, remember two things: the exemption only holds for officers who truly are directors and shareholders, and the state fund never defends a lawsuit, so a corporation with employees usually adds stop-gap employers liability to its general liability policy.
An Everett example
Illustrative, not a quote. A family-run manufacturing corporation in Everett has three officers who are all siblings, plus six production employees. The six employees are covered through L&I from the first hour. All three officers are directors and shareholders and are related, so the corporation can leave every one of them off the policy by default; one officer who runs the shop floor elects coverage anyway because of the injury risk. The company also carries stop-gap employers liability so a workplace-injury lawsuit would be defended. See our workers comp for manufacturers page.
Real questions Washington owners ask
Does my Washington corporation need workers comp?
If it has employees, yes, through the state fund from the first hour they work. There is no headcount minimum. Qualifying officers can be left off the policy, but regular employees must be covered.
Are corporate officers covered automatically in Washington?
No, and this is backward from most states. A qualifying officer is left off the policy by default in Washington. The officer can file the state elective-coverage form to opt in if they want their own injuries covered.
What makes an officer eligible to be left off?
The officer must be a genuine officer elected or appointed under the articles or bylaws who is at all times also a director and a shareholder of the corporation. An officer who is not a shareholder is treated as an employee.
How many officers can be exempt?
Up to eight qualifying officers. A corporation can exempt more than eight only if every exempt officer is related to the others by blood within the third degree or by marriage.
How does an officer get covered if they want it?
The officer files the state's elective-coverage form to opt in, and the corporation then reports that officer's hours. Officers doing physical or hazardous work often choose to elect in for that protection.
Do part-time or seasonal employees count?
Yes. Washington has no part-time or seasonal exception, so any non-officer employee is covered from the first hour and their hours must be reported to the state fund.
Does the state policy defend the corporation in a lawsuit?
No. The state fund pays a hurt worker's benefits but does not provide a legal defense. Corporations with employees usually add stop-gap employers liability to their general liability policy for that.
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?
- 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)
- Workers comp vs employers liability
- What workers comp does not cover
- Washington manufacturer 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.