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Running a business can feel a bit like juggling. You need to manage current clients, promote your business, delegate tasks, and hopefully get a good night's sleep.
Right now, you’re probably trying to understand what types of Washington business insurance you need. Securing business insurance is a step that the state recommends as part of your operations.
While all of this may seem overwhelming, breaking tasks down into smaller pieces usually makes them more manageable. After reviewing the types of insurance below, you’ll have a better understanding of what you need to do next to check this off your to-do list.
Most of us have bought some types of insurance, but Washington business insurance might be new to you. Fortunately, if you understand how common policies like homeowners or auto insurance could protect you, then you have a basic understanding of how business insurance can help you too.
In the same way that you could use auto insurance to help pay for repairs after an accident, your business insurance policy could protect your finances. If your business causes an accident or damages, you could be liable to pay for those claims or defend yourself in a lawsuit. But a business insurance policy might be able to cover some of those costs.
While there’s no such thing as a one-size-fits-all insurance policy, general liability insurance in Washington state is a one-policy-helps-many. This coverage could help with common claims that can happen anywhere, like customer slip and falls or property damage.
Considering the average customer property damage claim is $30,000, you could save yourself from a very large bill by protecting your business with insurance.
Typically, general liability insurance can cover third-party:
To make those terms a bit more concrete, let’s look at a few scenarios where general liability insurance in Washington could help business owners.
Without insurance, the hairdresser could be responsible for doctor bills and legal fees. If the hairdresser didn’t have the money in their business they might have to take it from their personal financial accounts. However, a general liability insurance policy could help them cover the costs and avoid debt.
The client is upset and wants a refund, plus the cost to re-wallpaper the wall. The uninsured home inspector wants to maintain their reputation, so they pay the damages out-of-pocket. Since they had to dip into personal savings to pay the homeowner, the inspector’s family has to postpone their vacation. If they’d had insurance, the home inspector may have been able to use insurance to cover the costs, up to their policy limit.
A simple miscommunication turned into a big bill for the homeowner, and they’re threatening to sue. If the water treatment company had general liability insurance, they could file a claim and potentially have their policy pay for the water damage. Otherwise, they’d have to come up with the money on their own.
Washington state recommends exploring business insurance, but there are no statewide general liability insurance requirements.
Instead, some industries with licensing requirements may need to show proof of coverage before legally operating. For example, contractors need to buy a surety bond and general liability policy.
If you need to get licensed and insured as a contractor in Washington, we have a guide to the process. You can start your search for licensed professions on the Washington Business Licensing Wizard site.
Some examples of requirements for general liability insurance in Washington state include:
You can still explore Washington business insurance even if you don't have a legal requirement. Simply Business works with more than 80 types of businesses.
It’s also worth noting that business insurance isn’t all doom and gloom. While it can help you navigate the aftermath of an accident, insurance also can help you grow your business.
Here are a few benefits you may not have thought about:
Any step you take to show your credibility and trustworthiness could help you gain customers.
Providing a Certificate of Insurance (COI) might be required on some applications. At the very least, it could help you stand out as a more reliable business owner.
You can chat with a licensed insurance agent at 855-541-0735 if you're curious about how your business could benefit from insurance. Simply Business also has a free online quote tool that lets you compare custom insurance quotes after answering a few questions.
Sometimes the falls and crashes often covered by general liability insurance can feel far removed from your daily life. Some business owners spend more time on a computer than on a construction site.
If this is the case and your business involves advising or consulting clients, there is one challenge you could face — negligence claims.
If a disgruntled client thinks your work harmed them in any way, they may sue you. The frustrating reality is that even if you didn’t do anything wrong, you may be left with legal fees for defending your case in court.
Professional liability insurance could help you in that case since it usually covers:
What could these scenarios look like? Even a minor slip-up could turn into a headache without professional liability insurance in Washington state:
Imagine a photographer inadvertently sends the final images from a boudoir shoot to the wrong client. The model finds out about the mistake and sues for negligence. Without insurance, the photographer would have to pay the legal fees.
A pilates instructor is working with a client when the move they recommended leads to the client tearing a ligament. The client claims the instructor should have warned them about their incorrect posture before the injury and demands that the instructor pay the medical bills. If the instructor had insurance, the policy could cover the claim and protect their finances in the process.
An accountant wraps up a busy tax season and later hears from a client that they miscalculated the tax return. The client had to pay twice as much tax, and wants the accountant to cover the cost to have another accountant fix the issue. The uninsured accountant has to deal with the relationship fallout of the mistake and dip into their savings to fix the situation.
Requirements for professional liability insurance in Washington state can vary, but the choice is often left to the business owner. For example, lawyers don’t need professional liability insurance to work in the state. However, they have to report to the Washington Bar Association each year regarding whether they have insurance coverage.
Some trades that could benefit from professional liability coverage include:
Each state sets its own workers compensation insurance laws, and most employers in Washington are required to have coverage. If you have or hire even one part-time worker, you likely will have to get Washington workers comp insurance.
A few exceptions or special employment cases include:
There’s another element of Washington workers compensation insurance that’s unique — you need to purchase it from the Department of Labor and Industries. There is an option to self-insure, but with a threshold of having at least $25 million in assets, it’s probably not the most common option.
The few types of Washington business insurance we’ve reviewed so far cover various scenarios, but not all of them. Since each business is unique, there are several more policies to consider like:
Surety bonds. Some occupations, like contractors, travel agents, and aircraft dealers need to have a surety bond. These are agreements between the company, their clients, and a bonding institute that guarantees damages can be paid.
Home-based business insurance. The Washington State Insurance Commissioner points out that you could be uninsured without realizing it if you run your business from home. A home-based business insurance policy could fill in the gap from homeowner's insurance.
Flood insurance. It’s important to assess your business’s location and the likelihood of natural disasters. If you could be in a flood-prone area, you might want to have flood insurance coverage.
Bringing on employees can be much-needed help to grow your business, but it has a new responsibility level. Since your Washington workers compensation insurance has to come through the state, there are certain steps you need to take.
If you’re considering hiring an employee, you should review the guides for hiring employees and setting up a workers compensation account. Here’s a brief overview, so you have an idea of what to expect:
If you have more questions about Washington workers compensation insurance, visit the Washington State Department of Labor and Industries site.
You’ve explored the types of Washington business insurance and know where to look for requirements. One critical question remains: “How much does Washington business insurance cost?”
The answer is, “It depends.” As frustrating as that might be, it’s actually a good thing. If Washington’s business insurance rates were universal, you could end up paying for coverage beyond your needs.
Custom quotes allow you to compare policies and find the sweet spot between affordability and coverage.
Generally, your insurance price depends on:
At Simply Business, general liability insurance quotes can start as low as $22.50 a month.*
Insurance seems like a worthwhile investment when you consider a customer slip-and-fall claim could average $20,000, and the monthly premium for a Washington business insurance policy is approximately the price as a fill-up at the gas station.
If you want to know how much your business insurance would cost, get free custom quotes. You can talk to our licensed insurance agents at 855-541-0735 or answer a few questions online. Either way, it’ll help take the guesswork out of budgeting.
Want a refresher before you dive into getting Washington business insurance? Here are some key points to keep in mind:
It’s common for insurance requirements to vary by occupation, so you may or may not need a policy before you start operating legally. If you don’t need coverage when you apply for a business license, you can explore coverage when you’re ready.
General liability insurance typically covers accidents such as customer injuries or property damage.
Professional liability insurance could protect your finances if you face a negligence claim.
Washington workers compensation is available through the state and is required for many employers.
Since you likely have some more investigation to do, we’ve rounded up a few helpful links and tips:
Review all the steps to starting a business on the Washington Small Business Guidance site.
Use the Washington Business Wizard to look for licensing and insurance requirements for your business.
If you perform multiple services, make sure you check for requirements across all of your activities.
It’s also a good idea to look for licensing and insurance requirements with your county and city government offices.
Reach out to trade and professional organizations to talk to local business owners in your industry about the insurance coverage they have.
Compare insurance quotes from different companies to find a coverage level and price point that you’re comfortable with.
Download your Certificate of Insurance (COI) once you have a policy. This shows that you’re covered, and the COI may be needed to get licensed, rent office space, and more.
Even seasoned business owners occasionally have questions and dilemmas. If you have a question about managing your business, the Simply U blog might have a post that can help.
We have a guide to getting a business license in Washington plus blogs about starting a business or growing your company.
Have any additional business insurance questions? Our licensed insurance agents will be happy to help you at 855-541-0735.
*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.
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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.