What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Washington

Before hiring employees in Washington State, businesses must secure specific insurance coverage to comply with state regulations and protect both the company and its workforce.

Workers' Compensation Insurance

Washington requires all employers with one or more employees to carry workers' compensation insurance. This coverage provides medical benefits and wage replacement to employees who suffer work-related injuries or illnesses.

• Obtain coverage through the Washington State Department of Labor & Industries or an authorized private insurer.
• Maintain accurate payroll records to calculate premiums correctly.
• Report new hires promptly to ensure compliance and proper coverage.

Unemployment Insurance

Employers must also register for unemployment insurance through the Washington State Employment Security Department. This insurance funds benefits for employees who lose their jobs through no fault of their own.

• Register your business with the Employment Security Department before payroll begins.
• Regularly report wages and pay unemployment taxes on time.

Additional Insurance Considerations

While not legally required, Washington employers often consider the following insurance to manage operational risks:

• General liability insurance to protect against third-party claims.
• Employment practices liability insurance to cover claims related to hiring, firing, and workplace discrimination.
• Commercial auto insurance if employees use vehicles for business purposes.

Operational Tips

• Verify employee classification to ensure proper insurance coverage and tax treatment.
• Automate payroll and insurance premium payments to avoid missed deadlines and penalties.
• Keep thorough records of insurance policies, claims, and employee communications.

As of 2026, staying current with Washington State insurance requirements is crucial for smooth hiring processes and ongoing compliance.