Tag Archives: Lien

Licensed, Bonded, and Insured

Washington State requires businesses in the construction trades to be registered as contractors, which includes being bonded and insured. These requirements help inform and protect consumers from fraud, damages, and liability. Simply put, hiring a contractor who does not meet this criteria puts consumers at significant risk. Skimping on credentials to get a job done cheaply or not verifying a contractor’s legitimacy is risky business, often costing consumers thousands of dollars.

Following is a detailed explanation of the terms Licensed, Bonded, and Insured and how the state requirements are designed to protect consumers.


The Washington State Department of Labor & Industries requires contractors be licensed as either a general contractor or a specialty contractor, such as drywall or painting. Licensed electricians, plumbers, elevator mechanics, and manufactured home installers require special certification, in addition to a license.

The contractor’s license number must be posted on any marketing materials such as their website, business card, or print advertising. Anyone can visit the Department of Labor & Industries website and verify a contractor by name, license number, workers’ comp account, or UBI number. This search will tell you if their license, bond, and insurance premiums are current, if they have any safety violations or citations, and allow you to track a contractor.

Once licensed the contractor is bound to comply with state building procedures and standards. If a property owner hires a contractor that is not licensed, they may not be protected by state policies. There is often very little that can be done if an unlicensed contractor disappears from a partially completed job or does a job incorrectly. News stories regularly report contractors disappearing with deposits or full payment, botched jobs requiring even more money to re-do them correctly, and sometimes much worse.


Contractors licensed in Washington State must be bonded. A bond is essentially a pre-paid savings account with a bank or insurance company that sets money aside in the event a project is not completed according to the contract. This bond or agreement, binds the contractor to the contract with the property owner. If the work is not completed according to the contract the bond will cover any expenses (up to the bond amount) required to complete the job satisfactorily.

General contractors are required to hold a $12,000 bond and specialty contractors a $6,000 bond. If the project is expected to exceed these amounts, the property owner can ask the contractor to post a performance bond. A performance bond covers the full cost of the project and guarantees the property owner compensation for any monetary losses if the job is not completed according to contract. Only the property owner can make claims against a performance bond but it is important to ensure the contract is very specific about the work to be completed.


Licensed contractors in Washington State must also carry general liability insurance. Minimum requirements include $50,000 in property damage and $200,000 in public liability, or a $250,000 combined single limit policy.

Damage to persons or property due to contractor negligence may be covered by this policy. In some cases, the property owner could be held liable for personal injury if the contractor does not have insurance.

If the contractor has employees they are required to have a workers’ compensation and industrial insurance policy. Contractor employees injured on the job would be covered by this policy. To verify if a particular contractor’s employees are covered, first pull up the contractor details and click on the link to Verify Workers’ Comp Premium Status.


In addition to working with a licensed, bonded, and insured contractor, there are several other steps to ensure your home improvement project goes smoothly.

Meet with several qualified contractors and solicit comparable bids. Once you narrow down your choices, speak with several references, particularly of jobs that are similar to yours.

Once you decide on a contractor and the project begins, meet with the contractor regularly. Make sure work is progressing according to the contract and schedule. Check that the proper permits have been obtained and required inspections are conducted.

Once the project is completed, do a final walk-through with the contractor and make sure all punch list items are satisfied before making final payment. If you request lien release documents, avoid making final payment for work performed until you have received the lien release.

Visit ProtectMyHome.net for many more useful links and information.

How To Hire A Contractor – 8 Essential Steps

Step 1 – Compile A List

The first step to hiring a home improvement professional is coming up with a list of potentially suitable contractors to consider for your project. You or someone you know may work in a related industry, such as an appraiser, inspector, or Realtor. They often have a list of reputable home improvement professionals they have come to know and trust. You may have a neighbor, friend, or relative who had good luck with a particular contractor for their own projects. You can also rely on Contractor Hotline to connect you with contractors who meet the requirements for your type of project. This approach moves you through the process more quickly than starting from scratch. Whatever method you use, there remains much to consider when narrowing down your choices and making a final decision.

Step 2 – Be Prepared

There is a lot to think about when planning a home improvement project. Prior to meeting with contractors, be as prepared as possible. Design, material selection, making sure proper permits are obtained, to ultimately completing your project on budget requires careful planning. The better prepared you are from the start the more smoothly the project will go. Unless you are experienced in this field, you will most likely rely on outside sources to guide you through the process.

The contractors must have a good understanding of your needs, wishes, and limitations to provide a comprehensive bid and scope of work. Larger projects will require plans prepared by an architectural designer. Having a solid idea of design, material choices, and budget are critical to ensure you collect comparable, apples to apples proposals.

Step 3 – Interview Contractors

You could be working closely with a contractor in your home for several months. Selecting a professional that is well-suited for your particular type of project, has a solid reputation, and who possesses an agreeable personality are all important considerations. Take a few minutes initially on the phone with each prospective contractor to help determine who you want to consider for your project. Have they worked on similar projects as yours? Can they provide references for those projects? Will they provide financial references from suppliers? What is their availability for your project? Narrow it down to three or four contractors who satisfied your initial questions and schedule an appointment to meet in person. In the meantime, check with the Washington State Department of Labor & Industries and Better Business Bureau for any disputes with clients or subcontractors.

Step 4 – Review Proposals

A comprehensive proposal should include a scope of work, materials needed/agreed upon, subcontractors to be used, estimated time to complete the project, price, permit fees, payment terms, warranties, and procedures for change orders. For large projects, a payment schedule usually starts with 10-20 percent at contract signing, three payments of 25 percent evenly spaced over the duration of the project, and a check for the final 5-15 percent when you feel every item on the punch list has been completed.

You get what you pay for is especially true when hiring a contractor. Beware of the lowball bid. The contractor may be cutting corners or desperate for work, both cause for concern. Hiring a contractor that is not licensed, bonded, and insured places the consumer at significant risk and can cost thousands more in the long run. Most importantly, you want to select someone who is reputable, competent, and communicates well. Ultimately, it is best to spend a bit more on a contractor who provides quality work and who you are comfortable having in your home.

Step 5 – Check References

Before making your decision final, check with some references of former clients, preferably who had projects similar to yours. Ask if you can see the finished product. Visit a current job site. Does it appear safe? Are subcontractors and employees professional and courteous? Are proper measures being taken to protect the homeowner’s property?

Step 6 – Finalize A Contract

Once you decide on a contractor, have a final contract drawn up that details the original scope of work and proposal including materials, subcontractors, price, permit fees, payment terms, warranties, and change order procedures; proof of liability insurance, worker’s compensation payments, and a security or performance bond; start date and projected completion date; and a requirement that the contractor obtain lien releases from all subcontractors and suppliers. For residential jobs over $1000, the contractor must provide the property owner a Disclosure Statement outlining the customer’s rights and responsibilities and information regarding liens.

Step 7 – Meet Regularly

Once work begins meet with the contractor regularly. Make sure work is progressing according to the contract and schedule. Check that the proper permits have been obtained and required inspections are conducted.

Step 8 – Final Walk-Through

Once the project is completed, do a final walk-through with the contractor. Make sure any items on the punch list are completed before making final payment. If you request lien release documents, avoid making final payment for work performed until you have received the lien release.

Our expertise is matching customers with the most appropriate contractor for their project. We do the initial work to ensure they are professional and dependable. Each contractor is licensed, bonded, and insured, successfully passed a thorough screening process including reference checks and regular credential audits, and continue to meet high standards of workmanship. We are committed to helping our customers achieve their home improvement dreams and goals, safely and efficiently. Please let us know how we can help with your next project.