Starting a Business in Washington State: Insurance Requirements

Washington State has specific insurance requirements for businesses operating within its borders. Understanding these requirements before you launch helps you stay compliant and avoid penalties. The rules vary depending on your business type, whether you have employees, and what industry you're in.

Workers' Compensation (Required with Employees)

If you have employees in Washington, workers' compensation insurance is mandatory. Washington is a monopolistic state, meaning you must purchase workers' comp through the Washington State Department of Labor & Industries—not private insurers. There are no exceptions based on business size; even one employee triggers this requirement. Penalties for non-compliance include fines and personal liability for workplace injuries.

Commercial Auto Insurance

Commercial auto insurance is required if you use vehicles for business purposes. Washington State requires minimum liability coverage, but these minimums are often too low for adequate business protection. Most business owners carry higher limits to protect against serious accidents. If employees drive personal vehicles for work, you may need hired and non-owned auto coverage as well.

Industry & Contract Requirements

Beyond legal requirements, certain industries and contracts require additional coverage:

• Contractors typically need general liability insurance to obtain licenses and permits
• Commercial landlords require tenants to carry liability coverage
• Many clients and vendors require proof of insurance before doing business with you

These aren't state laws, but they're effectively requirements for operating.

SmartInsured Serves Washington

SmartInsured is proud to serve Washington State businesses from our Bellevue headquarters. As a licensed WA insurance agency (#1009534), we understand local requirements and help ensure you're properly covered. Our licensed agents provide personalized guidance for your specific business situation. Get your free Washington business insurance quote today.