Washington Plumbing Contractor Bond: A Comprehensive Guide

June 17, 2021

This guide provides information for insurance agents to help contractors on Washington Plumbing Contractor bonds

At a Glance:

• Average Cost: Between $75 to $180 per year based on the applicant’s credit
• Bond Amount: $6,000
• Who Needs it: All individuals and businesses that act as plumbing contractors in the State of Washington
• Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
• Who Regulates Plumbing Contractors in Washington: The Washington Department of Labor and Industries (DOLI)

Background

Starting July 1, 2021 all plumbing contractors operating in Washington must obtain a license with the DOLI in accordance with Washington RCW 18.106.400. The Washington legislature enacted the licensing laws and regulations to ensure that plumbing contractors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, plumbing contractors must purchase and maintain a $6,000 surety bond to be eligible for licensure.

What is the Purpose of the Washington Plumbing Contractor Bond?

Washington requires plumbing contractors to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the plumbing contractor fails to comply with the regulations set forth in Washington RCW 18.106.410. Specifically, the bond protects the public in the event the contractor fails to pay all taxes and wages or breaches any contracts made. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.

Do Licensed General Contractors Need to Purchase the Bond?

All general contractors who wish to provide plumbing services must apply for a license and purchase a $6,000 surety bond. Prior to the implementation of Washington RCW 18.106.400, general contractors who acted as plumbers were required to obtain a speciality contractor designation and purchase a $6,000 surety bond. Effective July 1, 2021 plumbing contractors must obtain a plumbing contractor license, regardless if they are already licensed as a general contractor.

What If My Customer Is Already a Licensed Specialty Contractor?

If your customer is already a licensed specialty contractor, then they have until July 1, 2021 to obtain a plumbing contractor license to be eligible to act as a plumber. Specialty contractors applying for licensure specifically as a plumbing contractor must purchase a plumbing contractor surety bond and cancel their specialty contractor bond coverage. Contact BondExchange for assistance.

How Can an Insurance Agent Obtain a Washington Plumbing Contractor Surety Bond?

BondExchange makes obtaining a Washington Plumbing Contractor Bond easy. Simply login to your account and use our keyword search to find the “plumbing” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Washington Plumbing Contractor Bond?

Surety companies will run a credit check on the owners of the contracting company to determine eligibility and pricing for the Washington Plumbing Contractor bond. Contractors with excellent credit and work experience can expect to receive the best rates. Contractors with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the contractor’s credit.

How Much Does the Washington Plumbing Contractor Bond Cost?

The Washington Plumbing Contractor surety bond can cost anywhere between $75 to $180 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $6,000 bond requirement.

$6,000 Plumbing Contractor Bond Cost

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Washington Define “Plumbing Contractor”?

WAC 296-400A-005 defines a plumbing contractor as any independent business who installs, alters, repairs or renovates potable water systems, liquid waste systems and medical gas piping systems in the footprint of a building.

How Do Washington Plumbing Contractors Become Licensed?

Plumbing contractors in Washington must navigate several steps to obtain their business license. Below are the general guidelines, but contractors should refer to the application form for details on the process.

License Period – The Washington Plumbing Contractor License is valid for two years from the date of issuance and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Plumbing contractors must purchase and maintain a $6,000 surety bond. Licensed general contractors seeking to obtain a plumbing contractor license must purchase the $6,000 bond in addition to their $12,000 Plumbing Contractor License Bond.

Step 2 – Purchase Insurance

All plumbing contractors are required to obtain general liability insurance with the following minimum limits:

• • $50,000 injury/property damages
  • $100,000 injury to one person
  • $250,000 injury to multiple persons

Or $250,000 combined per occurrence

Step 3 – Appoint a Designated Plumber

Applicants for the Washington Plumbing Contractor License must appoint one individual, who has been certified by the DOLI. To become certified, designated plumbers must have the necessary experience, submit the required application, and pass a certification examination.

Step 4 – Complete the Application

All Washington Plumbing Contractor License applications must be mailed to the following address:

Department of Labor and Industries
Plumber Licensing and Certification
PO Box 4470
Olympia, WA 98504-4470

Applications must be signed and notarized, and contractors must pay a $139.10 application fee.

How Do Washington Plumbing Contractors Renew Their License?

Contractors should mail their completed renewal application to the following address:

Department of Labor and Industries
Plumber Licensing and Certification
PO Box 4470
Olympia, WA 98504-4470

The Washington Plumbing Contractor License is valid for two years from the date of issuance and must be renewed before the expiration date. Designated plumbers must also renew their certifications. To do so, plumbers must follow the steps located on the DOLI’s certification renewal page.

What Are the Insurance Requirements for Plumbing Contractors in Washington?

Plumbing contractors must purchase and maintain a $6,000 surety bond. Additionally, plumbing contractors are required to purchase general liability insurance with the following minimum limits:

• $50,000 injury/property damages
• $100,000 injury to one person
• $250,000 injury to multiple persons

Or a $250,000 combined per occurrence

How Do Washington Plumbing Contractors File Their Bond?

Contractors should mail the completed bond form, including the power of attorney, to the following address:

Department of Labor and Industries
Plumber Licensing and Certification
PO Box 4470
Olympia, WA 98504-4470

The plumbing contractor surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:

• Legal name of the entity/individual(s) buying the bond
• Surety company’s name
• Bond amount
• Date the bond goes into effect

What Can Contractors Do to Avoid Claims Against the Washington Plumbing Contractor  Bond?

To avoid claims on the Plumbing Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Pay all required taxes and fees
• Pay all employee wages
• Pay all vendors and suppliers
• Do not breach any contracts made with project owners

What Other Insurance Products Can Agents Offer Plumbing Contractors in Washington?

Washington requires plumbing contractors to obtain general liability insurance. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Washington Plumbing Contractor Customers?

Washington conveniently provides a public database to search for active plumbing contractors in the state. The database can be accessed here. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services.