Washington Contractor License Bond

Construction contractors working in Washington state must hold a valid license to do business on residential or commercial projects. Part of the licensing process for contractors is obtaining a Washington contractor license bond, which is a type of surety bond.

This bonding requirement helps ensure the vendors, suppliers, and customers who engage in business with a licensed contractor are protected in case things do not go as planned.

A Washington contractor license bond protects individuals and businesses when a licensed contractor fails to complete a project or does not complete work in line with state regulations or code.

A Washington contractor license bond works like any other surety bond, contractually obligating three parties.

The Obligee

The obligee, which is represented by a department of the state, is the licensing authority that requires a bond to be posted.

The Principal

The licensed contractor is known as the principal of the bond and must obtain the bond to be licensed in the state.

The Surety

The surety provides the bond to the contractor and initially pays claims made on the bond. The contractor must then pay back the surety.

Washington contractor license bonds have the following obligee information:

Washington State Department of Labor and Industries

7273 Linderson Way SW

Tumwater, Washington 98501

Phone: 1-800-833-6388

In Washington, only certain construction contractors are required to get a license and a Washington contractor license bond. Specialty contractors must have a valid license and post a bond, and the same is true for electrical contractors and general contractors.

In some cases, other contractors may be required to secure a Washington contractor license bond, depending on the work they perform and whether it is commercial or residential. For instance, structural pest inspectors, side sewer, and fire sprinkler contractors must have a license and a bond when working in the state.

You can start the easy process of getting a Washington contractor license bond by submitting a brief quote form online. The surety company provides the price for your bond, depending on the bond amount and type, as well as your credit history.

Once payment is submitted and details about the contractor business are provided, the surety company finalizes the bond information.

The cost of a Washington contractor license bond depends on the total amount of the bond required by the state. The bond amount is based on the type of contractor license an individual holds.

A general contractor performing work in Washington must have a bond of at least $30,000 in place, while a specialty contractor is required to post a $15,000 bond. Electrical contractors must have at least a $4,000 bond to meet licensing requirements. However, as a contractor, you do not pay the full amount of the bond upfront.

Bond prices are calculated as a percentage of the bond amount, typically ranging from one to 10 percent. Licensed contractors with a strong credit history pay a lower percentage, as they present a lesser risk to the surety company providing the bond.

Washington contractor license bonds are available to those with less than ideal credit histories, but the cost of the bond is higher. The bond premium is higher when you have bad credit because you are considered to be higher risk to the surety.

You can renew your contractor license bond by mail, online, or in person. You’ll need to renew your license and your contractor license bond every two years. If you miss the renewal deadline, you may end up with an invalid license and bond, which can negatively affect your business.