Do I need business insurance to start?

Business Insurance Requirements for Starting a Business in Washington

In Washington state, obtaining business insurance is an important operational step but not always legally mandatory to start your business. The need for insurance depends on your business structure, industry, and whether you have employees.

When Business Insurance Is Required

• Workers' Compensation Insurance: If you hire employees in Washington, you must carry workers' compensation insurance. This covers workplace injuries and is managed through the Washington State Department of Labor & Industries.
• Unemployment Insurance: Employers are required to register and pay unemployment insurance taxes through the Washington Employment Security Department.
• Commercial Auto Insurance: If your business uses vehicles, commercial auto insurance is necessary to comply with state motor vehicle laws.

Recommended Business Insurance Types

While not always required, these insurance types help protect your business operations and assets:

• General Liability Insurance: Protects against claims of bodily injury or property damage related to your business activities.
• Professional Liability Insurance: Important for service-based businesses to cover errors and omissions.
• Property Insurance: Covers damage or loss to your business property, equipment, and inventory.
• Business Interruption Insurance: Helps cover lost income during unexpected closures or disruptions.

Operational Considerations

Before starting, evaluate your business risks and consult with an insurance professional to select appropriate coverage. Maintaining proper insurance supports compliance and protects your financial stability.

Additionally, keep accurate records of all insurance policies and renewal dates as part of your overall business compliance and bookkeeping practices.