Prime Contractor Liability

	Contact Us

The Prime Contractor Liability Letter (27 KB PDF) was sent to help contractors better understand prime contract liability.

Ron Moore, Employer Services Program Manager, sent this letter to the following business organizations:

• AGC Western WA.
• Employer Resources.
• The Smart Way.
• BIAW.
• Tri City Construction Council.

In the construction industry, you can protect yourself from liability for your subcontractor's unpaid premiums by ensuring ALL of the following requirements are met:

• You, the prime contractor, and your subcontractor(s) must be:
  • Register as contractors under RCW 18.27 (www.leg.wa.gov)
    OR
  • Licensed under RCW 19.28 (www.leg.wa.gov).
• Your contracted work is the work of a contractor as described in RCW 18.27.010 (www.leg.wa.gov).
• Your subcontractor maintains a set of books and records that reflect all of the business' income and expenses (you need to review them for your protection).
• Your subcontractor works out of a storefront location or home office that is used regularly and exclusively for the business and is eligible for an IRS business deduction (you need to visit his or her place of business and make sure).
• You are not supervising your subcontractor or their employees. See Is Your Subcontractor Really an Employee? or A Guide to Hiring Independent Contractors in Washington State (F101‑063‑000).
• Your subcontractor has an industrial insurance (workers' compensation) account with L&I in good standing or is certified by L&I as self insured.
• You may fill out a Subcontractor Tracking Request form at Verify Workers' Comp Premium Status and L&I will notify you if your subcontractor falls behind on workers' compensation requirements.
  OR
  You must verify this when you hire a subcontractor and each year by checking their Employer Liability Certificate at Verify Workers' Comp Premium Status. Print and keep the certificate on file, then remember to do it again a year later.

You must ensure that all of the above requirements are met to receive protection from liability for your sub's unpaid premiums.

You will NOT receive protection from liability if you only meet the last requirement.

We need your help
What is Fraud? Help lower your premium cost; make others pay their fair share and get workers back to work by reporting law breakers. Fraud costs the Washington State workers' compensation system millions of dollars each year. Employers, employees, L&I and Washington consumers pay the cost of fraud in lost jobs and profit, lower wages and benefits, and higher costs for services and premiums.