Contractors Bond Requirements – Changed!!
The requirement for a General Contractors Bond has been $12,000 and for a Specialty Contractor $6,000 for….well…. a LONG time. New requirements have been released, let’s dive in! You don’t want to miss this and risk a suspended license!
On on July 1, the State of Washington changed the bond amount requirements for most contractors.
Previously, General Contractors were required to have a $12,000 bond, and Specialty Contractors needed a $6,000 bond. As of the new effective date, these amounts have increased. General Contractors are now required to have a $30,000 bond, while Specialty Contractors must have a $15,000 bond.
How to Obtain the New Bond
Next, let’s talk about how to obtain this new bond. If you already have a bond, you’ll need to contact your bond provider (we write bonds) to increase the bond amount to meet the new requirements. You will need to renew the bond, then have your agent do a rider on the bond to increase the amount.
If you’re obtaining a bond for the first time, make sure to get the correct amount based on your contractor type.
Impact on License Renewal
Now, how does this impact your license renewal? When you renew your contractor’s license, you’ll need to show proof of the new bond amount. Without this updated bond, you will not be able to renew your license.
Be mindful of the timeline!
Let’s say your contractor’s license renews in August, and then your bond renews in November. You won’t be able to renew your contractor’s license without showing you have the new required bond amount. You won’t be able to show that if you didn’t contact your agent well ahead of when you needed to renew your license. As agents, we can get you the increased amount, but it involves processing a change on your current bond, known as a rider.
Once we get that for you, you will have to get it to the State of Washington before trying to renew your contractor’s license. If you don’t, they will suspend your license. Washington has a contractor portal system where you are supposed to be able to upload the required info (your agent cannot do this on your behalf).
We are hearing from those that have already tried the process that there are some inconsistencies with this process. For example, it may show all done and accepted in the portal, but they still get suspended. This results in some frantic calls to the State with some fairly long hold times. Jump on these things well ahead!
Staying Informed
Staying informed is key. Make sure to check the Washington State Department of Labor & Industries website for the latest updates and detailed information on these changes. They offer resources and guidance to help you navigate this transition smoothly. Here is a link to a recent article https://lni.wa.gov/news-events/article/24-13
Need Help?
If you have any questions or need assistance, feel free to reach out to us at 253-527-6261 or email to: clientcare@pnwinsurancegroup.com We’re here to help!
Key Points
Bond Amounts Changed
Call Your Insurance Agent
Start the Process Early
Be Aware of Increased Costs
Thanks for reading! Remember, staying compliant with the new bond requirements is essential for your business.