Contractor Insurance, Bonds and Workers' Comp: What Protects You

Three separate things stand between you and the cost of a remodel that goes wrong: the contractor's registration bond, the contractor's liability insurance and a workers' compensation account with the Department of Labor & Industries (L&I). They cover different risks, each has limits that surprise people, and none of them replaces your own homeowner's policy. This page explains what each one does, using the amounts in Washington law as of October 2026.

The three protections side by side

What the bond covers, and what it does not

Under RCW 18.27.040(1), the bond is conditioned on the contractor paying its workers, its taxes, its suppliers and "all amounts that may be adjudged against the contractor by reason of breach of contract including improper work in the conduct of the contracting business." It is security for a judgment, not an insurance policy on your kitchen.

The limits are written into the disclosure statement that RCW 18.27.114 requires you to be given before work starts on a job of $1,000 or more. In the statute's own words, the bond "MIGHT NOT BE SUFFICIENT TO COVER A CLAIM THAT MIGHT ARISE FROM THE WORK DONE UNDER YOUR CONTRACT", and it is "not for your exclusive use because it covers all work performed by this contractor."

• It is shared. RCW 18.27.040(4) caps the surety's total liability at the bond amount. If claims exceed it, employee labor is paid first, then breach of contract claims by a party to the construction contract (that is you), then subcontractors and suppliers, then state taxes, then court costs, interest and attorneys' fees.
• Homeowners have a reserved share. RCW 18.27.040(5) says the total paid to claimants other than residential homeowners must not exceed one-half of the bond.
• It takes a lawsuit. The bond is reached by suing the contractor and the surety in superior court within a fixed deadline. The steps are in what to do if a remodel goes wrong.
• It is small next to a kitchen. JDI's own planning ranges start at $28,000-$45,000 for a small kitchen at the Essential tier, before sales tax, so the whole bond can be less than a single contract.

Before July 1, 2024 the amounts were $12,000 and $6,000. L&I says contractors whose registration term began before that date must carry the higher bond when they renew or reinstate, and WAC 296-200A-025 limits a registration period to two years, so the old amounts should have aged out by mid-2026. Still, read the bond amount shown for the contractor you are considering.

Liability insurance

RCW 18.27.050(1) requires every registered contractor to carry insurance of at least "fifty thousand dollars for injury or damages to property, and one hundred thousand dollars for injury or damage including death to any one person, and two hundred thousand dollars for injury or damage including death to more than one person." Those figures have not been raised since the section was last amended in 2001.

This is the coverage that answers if a supply line fails overnight or a cabinet delivery damages your floor through the contractor's negligence. L&I's guidance is that you claim directly against the contractor's liability insurer, which you can find through the Verify tool. Verify shows the policy and, in L&I's words, "their coverage amount", so you can see whether a contractor carries only the minimum or considerably more.

Workers' compensation

Washington runs its own workers' comp system. L&I states that the state "does not allow private workers' compensation coverage", so an employer must buy coverage from L&I or be a certified self-insured employer. A certificate from a private insurer is not proof of Washington workers' comp.

It matters to you because of how the law assigns responsibility. RCW 51.12.070 says the person "who lets a contract for such work is responsible primarily and directly for all premiums upon the work." L&I's warning to homeowners is direct: "if an employer does not have an active workers' comp account, you could be held liable if a worker is injured on your property." How often L&I actually pursues a homeowner is not something its published guidance spells out, so treat it as a risk L&I warns about and remove it by checking.

Two situations need extra care:

• The contractor with no employees. L&I says owner-operators and sole proprietors who do not use other workers "are not required to have workers' comp accounts." That is legal. Ask who will physically be in your kitchen, and check each company that sends people.
• The helper you hire directly. If you hire an unregistered person, L&I says you "could be considered that person's employer, with wage, tax, workers' comp, safety, and record-keeping requirements", and warns that "Most homeowner policies do not cover workers." This is one of the limits to keep in mind if you plan to do part of the remodel yourself.

How to check all three

L&I's "Verify a Contractor, Tradesperson or Business" tool covers the bond, the insurance and the workers' comp account in one search by name or registration number. L&I says it shows whether the business has an active registration and "an active and paid-to-date workers' comp account covering any employees", along with the insurance policy, the bond and bond company, and lawsuits against the bond. The full walk-through is in how to verify a contractor in Washington.

1. Search the contractor and confirm the registration is active.
2. Read the bond amount and note the bonding company.
3. Read the insurance coverage amount and the policy expiration date.
4. Confirm the workers' comp account is active and paid to date, or learn why there is none.
5. Repeat for the plumber, electrician and any other company the contractor brings in. L&I notes that subcontractors can be checked the same way.

Your own homeowner's policy

The contractor's coverage protects you from the contractor's failures. It does not insure your house. What your own policy does during a remodel depends on its wording, which this guide cannot read for you, so call your agent or insurer before demolition and ask:

• Do I need to tell you about the remodel, and does anything change while the kitchen is under construction?
• Are cabinets, appliances and materials covered while they are stored in my garage before installation?
• Will my dwelling coverage limit need to rise once the kitchen is finished?
• Does the policy cover anyone I hire directly who is injured here?

Get the answers in writing. If you live in a condo or townhome, your association may also ask for the contractor's insurance certificate before work begins, which is covered in kitchen remodels in condos, townhomes and HOA communities.

Where these protections stop

None of the three pays an unpaid supplier's lien on your home once the bond is used up, and none guarantees the quality of the work. Those risks are handled by the contract, the payment schedule and lien releases, covered in Washington construction liens and contracts, deposits and change orders, and by the written warranty.

JDI Construction's Washington registration number is JDICOCN932KZ. Rather than take any contractor's word for its coverage, ours included, look the number up in Verify and read the current bond, insurance and workers' comp status yourself. It is one step in choosing a kitchen remodeler, and if you would like to talk through a project, you can contact our team.