IMPORTANT UPDATE
New Mandate: Bond or Security Required for Insurance Clients (Effective until July 1, 2024)
Many practitioners have found that the current contractor registration bond amounts are inadequate to compensate claimants for their losses. In response, the Washington Legislature passed HB 1534, which Governor Inslee signed into law on May 1, 2023.
This law increases the bond amount for general contractors to $30,000 from the previous amount of $12,000, and for specialty contractors to $15,000 from the previous amount of $6,000. These new bond amounts will take effect on July 1, 2024. This new requirement (outlined below) is designed to protect our clients and ensure that they have the financial resources to meet their insurance obligations.
How will the new bond or security requirement affect me?
If you are a new bond client, you will be required to comply with this new regulation before the bond can be issued. If you are an existing bond client, this increase will go into effect at the time of renewal.
Important information about the new bond or security requirement:
- The bond or security requirement goes into effect July 1, 2024.
- If you had a bond in effect prior to July 1, 2024 at time of renewal you will need to comply with this new requirement.
- The bond or security must be in the amount of $30,000 for general contractors and $15,000 for specialty contractors.
- The bond or security must be issued by a surety insurer who meets the requirements of chapter 48.28 RCW.
- The bond or security must be continuous and may be canceled by the surety upon the surety giving written notice to the director.
- If the bond or security is canceled, the contractor’s registration will be automatically suspended until a new bond or reinstatement notice has been filed and approved.
Should you have any questions regarding your current coverage or want further information on these points, Basin Pacific Insurance is here for you. Contact us today at [email protected] and your agent will be in touch shortly.
For more information on the types of contractors coverage offered by Basin Pacific Insurance, click here.