What is a Washington Contractor License Bond?
Washington has many contractor license classifications and each subset of licensure has its own surety bond requirement. Every license holder is required to purchase a surety bond before the Washington Department of Labor and Industry will approve your application.
This surety bond, called a contractor license bond, is a type of insurance contract required by the Department of Labor and Industry for the protection of the Washington public. A contractor license bond is a a financial guarantee that you'll follow all Washington State building codes and regulations and follow through on your contracting obligations to your customers.
When you purchase a contractor license surety bond, you're making this promise to the Department of Labor and Industry and to your customers.
Get Your Washington Contractor Bond
$30,000 Bond
$15,000 Bond
$4,000 Bond
$6,000 Bond
Bonds $6,000 or more up to $10,000
$30,000 Bond
Bonds up to $20,000
1-Year Bond Starts at $100.00
1.2% of the Bond Amount
Expires 12/31
Bonds up to $25,000
1-Year Bond Starts at $100.00
1.0%-1.8% of the Bond Amount
2-Year Bond Starts at $175.00
1.0%-1.8% of the Bond Amount
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If you prefer you can watch our video about the Washington contractor license bonds.
Who Is Required To Purchase a Washington State Contractor Bond?
Washington State has the following two main license classifications:
- General contractor
- Specialty contractor
There are currently 63 specialty license classifications. Each classification is independent and requires its own license process and surety bond.
Examples of some of these specialty licenses are:
- Roofers
- Electricians (not general contractor electricians)
- Painting
- HVAC (mechanical)
- Plus a lot more
Some specialty licenses have unique requirements when it comes to the application process and bonding amount.
The specialty classifications with special rules are:
- Electrical and Telecommunications
- Plumbing
- Fire sprinkler contracting
- Farm label contracting
Regardless of the classification, every license holder is required to purchase a contractor license bond before your application can be submitted for approval by the Department of Labor and Industry.
Plus, keep in mind many counties or cities may have their own bonding requirements. This is usually the case for public right-of-way projects and many types of permit applications.
The Assigned Bank Account Option
Washington allows contractors to provide one of the following instead of purchasing a contractor license surety bond:
- Cash
- Certificate of deposit
- Money market account
Typically, these options are not the best option for most contractors. They require the full bond amount in a bank account. These accounts must be maintained for the life of the contracting business and in many cases for a couple years after a contracting business has been closed to account for any claims that may come from prior business activity.
Purchasing a surety bond requires a small fraction of the bond amount as you'll learn.
The Washington State Contractor Bond Amounts
Each bond amount is set by the Department of Labor and Industry. At a high level here are the bonding requirements for general and specialty contractors, but please note that the amounts are higher as of July 1st, 2024. The increased bond amount is required by your license renewal (even if that date is slightly different than the date of your bond renewal!)
| Specialty | Bond Amount | Bond Amount (as of July 1, 2024) |
|---|---|---|
| General Contractor | $12,000 | $30,000 |
| Specialty Contractor | $6,000 | $15,000 |
As we mentioned, the following specialty contractor licenses have their own unique bond amounts set by the Department of Labor and Industry.
| Specialty | Bond Amount |
|---|---|
| Electrical | $4,000 |
| Telecommunications | $4,000 |
| Plumbing | $6,000 |
| Fire Sprinkler Systems | $6,000 (lvl 1 and 2) $10,000 (level 3) |
| Farm Labor | $20,000 |
| Side Sewer | $30,000 |
| Optional bond for city, county, or municipality | Up to $25,000 |
County and/or Municipal Bonding Requirements
Depending on where your project is located you may have to purchase a separate county or city contractor license bond.
Typically, you'll be notified of this bonding requirement when you go to pull permits for the project.
The amount of the bond will be told to you at that time. Each county and city will have their own requirement.
Why is a Washington Contractor Bond Required?
The Washington Department of Labor and Industry requires contractors and contracting businesses to get licensed and conduct their business according to the rules, regulations, and laws in the state.
The licensing process ensure contractors has:
- A minimum amount of on-the-job experience
- Obtained the necessary level of education
- Passed any required examinations
- Submitted proper business records
- Passed criminal background checks
- Purchased the minimum amount of insurance
- Selected the appropriate license type for the projects they want to bid on
And one of the requirements for all license classifications is the surety bond.
Remember, the Department of Labor and Industry requires this bond as a guarantee that you will follow all Washington building codes and regulations and complete projects for your customers according to the project contract.
What Does a Washington State Contractor License Bond Protect Against?
Unfortunately, there will always be a few licensed Washington contractors who try to purposefully cut corners to increase profits or even steal money from their customers.
Examples of these fraudulent actions can include:
- Breaking the terms of a construction project without the project owners knowledge
- Taking deposits or down payments and never starting or completing a project
- Replacing materials with cheaper alternatives to increase profits
- Failing to pay subcontractors for completed work
- Neglecting building codes and purposefully performing poor quality work to save money
If a contractor is found guilty of any of these actions, a claim can be made against the contractor license bond for financial repayment, but only up to the amount of the specific bond.
It's always a priority to work with your customers in the event of any disagreement to prevent any claim from being made in the first place.
How Much Does a Washington State Contractor Bond Cost?
A contractor license bond's price is calculated by a rate determined by a surety.
A surety is the insurance company that underwrites surety bonds. The surety uses their own internal process to determine this rates, but every surety will account for these factors:
- Personal credit of the business owner or owners
- The business' experience and industry experience
- Any prior bond claims if the business owner or owners were licensed in the past with a bond that received a claim
This rate multiplied by the bond amount is the price you pay to meet the bonding requirement.
BOX WITH EQUATION
This is why working with a bonding agency like Surety Bonds Direct is important.
We work with a network of A-rated sureties, allowing us to price shop for you and obtain the lowest possible price. Depending on the bond, these prices can vary by hundreds of dollars.
Contractor License Bonds With a Fixed Price and No Credit Check
For the following Washington contractor bonds, Surety Bonds Direct has secured low fixed priced bonds requiring no credit check.
| License Bond | Price | Click to Purchase |
|---|---|---|
| Telecommunications 1 Year Bond | $100.00 | |
| Telecommunications 2 Year Bond | $175.00 | |
| Farm Labor Contractor Bond (up to $25,000) | Starts at $100.00 (1.2% or required bond amount) | |
|
1 Year Contractor License Bond (city or county) (up to $25,000) |
Starts at $100.00 (1% of required bond amount) | Click to Purchase |
|
2 Year Contractor License Bond (city or county) (up to $25,000) |
Starts at $175.00 (1.75% of required bond amount) | Click to Purchase |
This means you can instantly purchase your bond and have it issued within one business day.
Contractor License Bonds Requiring a Quote
The following contractor bonds require a custom rate based on the criteria mentioned above: personal credit, experience, and prior bond claims (if applicable).
| License | Bond Amount | Get Free Quote |
|---|---|---|
| General Contractor | $12,000 | |
| Specialty Contractor | $6,000 | |
| Plumbing | $6,000 | |
| Fire Sprinkler Systems | $6,000 (lvl 1 and 2) $10,000 (level 3) | |
| Side Sewer | $30,000 |
Let's look at the $12,000 General Contractor bond for examples of different rates and how they affect pricing.
The rates in the table range from really good to about average. Remember the price is the rate multiplied by the $12,000 bond amount.
| Bond Amount | Premium Rate | Total Cost |
|---|---|---|
| $12,000 | 0.05% | $60 |
| $12,000 | 0.07% | $84 |
| $12,000 | 0.09% | $108 |
| $12,000 | 1% | $120 |
| $12,000 | 1.2% | $144 |
| $12,000 | 1.4% | $168 |
It's important to get your specific pricing and the process is easy to start.
Click here and start the online quote process. It takes 90 seconds to submit your request and we'll start pricing shopping for you.
If you prefer to speak with a bond specialist, you can call 1-800-608-9950.
Having a bond specialist secure pricing for you costs nothing and there's zero obligation to purchase the bond once you receive the pricing.
County, City, or Local Government License Bonds
For local bonding requirements, you can instantly purchase your bond, for bond amounts up to $30,000.
Once you have the bond amount given to you by the county or city agency requiring the bond, the minimum price starts at $100.
The price is 1% to 1.8% of the bond amount depending on the specific bond required. Bonds in larger cities like Seattle will usually require a higher rate.
Surety Bonds Directly allows you to enter your bond amount and instantly purchase your bond. After you purchase, the bond will be issued within 1 to 2 business days.
What Happens After You Purchase Your Bond?
After you purchase your bond, Surety Bonds Direct's issuing department will prepare your bond with the correct signatures, notarized seals, and the required power of attorney.
The Washington Department of Labor and Industry allows us to email a copy of the bond to you. This makes it easy and fast for you to receive your bond and submit it with your application.
Renewing Your Contractor Bond
Washington contractor bonds expire one year from the active (effective) date of your bond.
Your bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.
Once you pay the renewal premium, your bond remains active.
This Contractor License Bond is Continuous
A continuous bond means the original bond remains active as long as you pay the renewal premium.
Most of the time, you never have to worry about having a new bond issued or re-submitting the bond to the Department of Labor and Industry.
If we find you lower pricing, we'll get you that bond and in this case you will have to submit the new bond to the Department of Labor and Industry.
Contractor Bonds And Getting Your Washington Business License/Registration
If you're applying for your first Washington contractor license, the Washington Department of Labor and Industry website is a great place to start.
At a high level the steps are:
- Decide on your business name and structure
- Purchase your surety bond
- Purchase your liability insurance
- Visit your local Labor and Industry office
Additional Washington Contractor Bond Resources & Links
Department of Labor and Industries, Contractor's Registration Section
Washington State Legislature Chapter 18.27 RCW REGISTRATION OF CONTRACTORS
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